Buying a House in Sapporo, Japan

In our role as real estate consultants at Find Hokkaido Agents, we receive a lot of requests from clients that want to buy a house in Sapporo. Sapporo, Japan is a beautiful city and a fantastic place to live. The natural beauty of Hokkaido, combined with the low cost of living, makes Sapporo a very attractive city for families and single professionals, and has significant potential for growth.

In this article we’ll discuss some common considerations for anyone thinking of buying a home in Sapporo.

When you’re ready to learn more or to look at property in Sapporo, contact us. We can introduce you to local Sapporo real estate agents that can help you determine a budget and locate the perfect neighborhood for your lifestyle (we’ll discuss both of those topics, and more, in the paragraphs below).

How to Buy A Home In Sapporo

The basic process to buy a Sapporo house (as anywhere) is:

• Determine a budget for the cost of the home
• Consider any down payment and financing
• Find a real estate agent you can trust
• Decide what neighborhood you want to live in
• Prescreen some properties online
• Visit the properties
• Make an offer to buy the property
• Negotiate price and contingencies
• Close the sale
• Complete any tax requirements

Unless you’re a local expert in Sapporo real estate, you will likely want help with the process of buying a home. In many cases, getting help from a licensed real estate broker in Sapporo would be a good first step (after you’ve done some initial planning). A good agent can take care of much of the burden, and can introduce you to other professionals (Hokkaido legal services or tax services in Sapporo) as needed.

Below we’ll offer more detail on many of the stages in the home buying process.

Consider Budget Before You Talk to an Agent

While we recommend working together with a real estate agent you trust for the entire process, you can begin with some basic preparation that will help the process run more smoothly. For example, you can start with some basic budget planning for how much you can afford to spend as you buy a house or property in Hokkaido.

Most agents can’t help you until you can specify a budget to help them know what you want to spend. There will be many choices of available houses for sale in Sapporo, and a basic budget is the first step to help the agents make practical suggestions. With a very big budget, certain amenities (like a new construction or a dedicated parking space) can be considered. With a smaller budget, certain neighborhoods might be more appropriate than others. Determining a budget will help guide the rest of the buying process.

While you might want some suggestions from your agent, you can begin to think about how much money you have to spend toward the purchase of a home, if that cash is available, how long it would take to prepare your funds for a down payment, and if you are interested in a mortgage for a home in Sapporo. As you proceed toward your goal, all of these topics will be addressed, and if you’re prepared, your time with the agent will be more productive.

If you have a spouse or a business partner to consider, you can discuss these matters in advance, and make sure you have come to a basic agreement about your budget.

Some buyers can be difficult (and potentially frustrating) for real agents. Being at least a little prepared on budget matters will help you attract the time and attention of the best agents, establish good rapport as you begin the relationship, and will help the deal flow along successfully. We have more notes about working with real estate agents in our post about how to find an agent in Hokkaido.

Choosing a Location

A practical budget for your home purchase will depend on your available funds as well as trends and real estate prices in Sapporo. Your choice of neighborhoods will impact the purchase price for a house in Sapporo. If you’re not certain where you want to live, that is a great place to start the conversation with your agent. They will likely ask you where you want to live, or you might ask them for recommendations for neighborhoods with the best services or entertainment options, better school options for children, or for neighborhoods where property values are increasing, etc. A local real estate agent can add a lot of value to your planning.

The particular neighborhoods in Sapporo (or “Sapporo wards,” as they are called locally) that you’re interested in will often depend on existing commitments to school, to jobs, or other preferences. As Sapporo has a strong public transportation network, reasonably close access to a major train station might be all that is needed to connect you to schools (like the Hokkaido International School), work, and other daily needs. Depending on your willingness to drive or use public transportation, various neighborhoods may be possible or even desirable.

Talk with your agent, determine one or more neighborhoods that might meet your needs and budget, and then your agent can use REINS (and other online property tools in Japan) to provide some online listings to consider.

Factors that Influence the Price for a House in Sapporo

As we mentioned above, location is a key determinant in the cost for a given property in Sapporo. However, even within a particular area of Sapporo, there is a wide range of prices driven by a few other predictable factors like the size of the unit (number of bedrooms), proximity to local transportation, etc.

Two common factors that influence price are the age of the building and the type of construction.

In Japan, the age of building has a lot to do with the selling price of the property. In general, the Japanese seem to prefer new construction. In fact, it seems as if much of the economy depends on an ongoing cycle of building housing, using it for 20-50+ years, then tearing it down, and rebuilding it. Preserving existing construction is rare, and some real estate tax in Sapporo involves consequences for both the age of the building and construction materials (all wood, concrete and steel, etc); both factors influence property values.

Along with location, age of the building, and construction materials, the type of home is another factor that impacts the price. There are certainly a number of detached houses in Sapporo (single family). In addition to single family homes, there are a number of two-unit and other multi-family Sapporo homes for sale as well. In terms of the concepts discussed in this post, all of this information provided would also be relevant if you wanted to buy a condominium in Sapporo (the Japanese refer to single units for sale in multi-unit buildings as “mansions”).

Looking at Property Online in Sapporo

Early in the process of buying a home, your agent will send you some online links to property in Sapporo for you to look at. Some of these houses may be perfect for you, but often the initial houses you’re shown online will provide some examples to use to help communicate with your agent about what you truly want. Based on the responses from you, your agent can refine the search and find some property that is a better fit for your needs.

The primary online real estate listing tool in Japan is called REINS, which is the “multiple listing service” (or MLS) for Japan. Only agents have access to the REINS property database in Sapporo. If you want to see those properties, you’ll need a licensed agent to provide you with access.

In addition to REINS, there are also several other companies that provide broad online listings of property for sale in Japan. These might include many of the same listings found on REINS, but these services are more commercial and would also include advertisements from various real estate companies trying to promote their listings.

Besides the greater listings of property in REINS and these other broad online listing services, several real estate companies in Sapporo will have their own, smaller lists of properties they represent. Your own agent will work for a real estate company, and may show you an in-house list of properties they are trying to sell. When the agent that represents you as the buyer tries to get you buy property where they also represent the seller, that is called “dual agency”. We advise all our clients to have their own agent, one that does not represent the seller’s property (and we say more about that below).

And while it may be that the perfect property for you is available from the real estate company you are working with as the buyer (or some other real estate company), as you begin your search, make certain that your agent shows you generally available property, and not only homes they represent. For the best home, at the best price, you’ll want to consider all of the available property that meet your needs.

Make certain you are seeing property on REINS and other big aggregators of available Sapporo homes for sale as you consider your options.

Viewing Property For Sale in Sapporo

If you and your agent are working with a practical budget in mind, and you’ve determined a neighborhood (or two) that can give you what you want, and you’ve previewed some property online that interests you; it is finally time to go look at some property in person.

It can be practical (but is not required) to go look at the property on your own before you make an appointment to see the property with your agent. It may be that as you see the property in person that there are some qualities about the property that make you more or less interested in seeing it. The general atmosphere of the neighborhood, access (or lack of access) to local conveniences like a super market or access to the train, and exterior features of the house or the property itself may make or break your desire to see more. Particularly if you determine you are not interested in a property before you make an appointment to look inside, that can save time and speed up the process.

To see the inside of a given property, you may be able to go to the equivalent of an “open house” for available homes for sale in Sapporo. In our work with clients (and as property investors on our own deals), we have been to open houses in Sapporo, where the property is open for viewing, and potential buyers and their agents can stop in without an appointment.

Often, however, viewing an available house for sale in Sapporo will require an appointment, where your agent talks with the sellers agent, and a meeting is arranged. In this meeting, the sellers agent will open the house, you can tour the property, and ask questions. If the property is new or the owner has already moved out, the house will be empty. Otherwise, if the property is occupied by the owner you may see it in the condition the owner uses it.

For buyers looking to buy property to generate rental income in Sapporo, those properties are often occupied by tenants. In those cases, the rental houses for sale in Sapporo can only be viewed from the outside, as renters rights prevent showing of occupied housing or rental units.

Making an Offer

After you find a house in Sapporo you want to buy, your agent can communicate your interest and your offer to buy the property.

Negotiating price in real estate deals in Sapporo is fairly common – you do not necessarily need to pay the asking price for the property. In our work with clients, we have seen sellers quickly accept offers of five or 10% below the asking price. Larger discounting may be available in some circumstances.

It is also true that the Japanese have some sense of “first come, first serve” in terms of negotiating with a buyer. If you make a reasonable offer to a seller, that seller and their agent may complete that negotiation with you before they engage any other buyers. We have seen some transactions where the seller wasn’t entertaining other offers (even, potentially, at a higher price), as they were already in conversation with a buyer. In those cases, the suggestion was that any additional offer would serve as a backup, and only be considered if the first deal fell through. This seems to be another cultural difference in Japanese real estate culture versus the West.

Completing the Sale

Once your offer is accepted, assuming there is no problem with financing, the sale proceeds with a series of documents handled by the agents and the real estate lawyers (or what they call judicial scriveners in Sapporo). You should expect a few requests for additional details and documentation before the day when the property officially closes.

In the United States (for example), a title company would serve as an intermediary and would hold and confirm funds from the buyer and release them as the seller turns over the ownership of the property. In Japan, there is no such intermediary. Typically a lawyer or judicial scrivener (arranged by the seller, or by one of the agents in the transaction) serves to help complete the signing process and to ensure the transfer of money.

To complete the sale, you and your agent will attend an in-person meeting with the sellers agents and any legal representatives. You will be read a document that translates to “Explanation of Important Matters” (which must be read by a licensed agent, which may be someone other than the agent that helped you visit the property, etc). If there is any loan involved in the purchase of the property, that company may be present on the final day as well.

There are various fees that are paid in that meeting. Some simple contract-specific taxes are paid. Fees for the real estate lawyers are paid. The balances for the property may be committed. For more on all these steps, see our article about how to buy a house in Hokkaido.

Dual Agency

As we mentioned in previous sections of this article, occasionally you will be in a position where a particular agent wants to represent you as the buyer, and also show you property where they (or their company) represents the seller as well (for the same piece of property). This is called “dual agency.” It is a somewhat common practice in Japan, and presents several complications you might want to avoid.

An agent that is representing you as the buyer, and can also sell you a property where they represent the seller, can make a commission on both ends of the transaction. While agents would like to represent both the buyer and the seller (so they can make more money), dual agency is not necessarily a good idea for the buyer, and is not recommended. There is a conflict of interest when the agent is representing (and potentially negotiating) for both sides of the same deal.

You are best served when your agent wants to get you the best price and conditions for your purchase. In a dual agency situation, there can be a conflict during negotiations, where what is best for you, isn’t best for the seller. When your agent represents both sides, you may miss benefits that an independent agent might otherwise be able to negotiate.

Dual agency situations can be common when a buyer finds a piece of property online, and begins a conversation with the sellers agent. We recommend you do no contact sellers agents directly, and that you instead contact an agent of your own, and have that agent contact the sellers agent for you. It is a local cultural phenomenon that when a sellers agents begins a relationship with you, and then learns that they must split the commission with an agent that represents you as the buyer, there is bitterness that can stall or derail the transaction. You are advised to always hire an agent that can present you and guide you through the process of buying real estate in Sapporo, and to do that before you ever contact agents representing a particular property – it will save your difficult and potential headaches.

Property Loans and Home Mortgages in Sapporo

Japan has famously low rates of interest on property loans, but most of those opportunities would only apply to residents and the native born population of Japan.

Here at Find Hokkaido Agents we have conducted extensive research on loan opportunities for foreigners in Japan, and produced a detailed report on this topic. We interviewed dozens of lenders in Japan (and around the globe) and created a database of available loan opportunities, and original reporting showing use-cases where foreigners can be approved for loans to buy property in Sapporo. Opportunities definitely exist.

The loan and financing topic deserves it’s own conversation, but we’ll say this for now: It is interesting to note that because Sapporo is a larger, more established market, banks are more likely to offer loans for property in Sapporo than they are for property in Niseko, (or other more speculative markets) or other less-central areas of Hokkaido. Sapporo is a more established market, has resale values that are easier to determine, and the lenders are more comfortable lending to foreign buyers in Sapporo than perhaps anywhere else in Hokkaido.

If you can provide your own financing, that will be the fastest, easiest way to buy property in Sapporo. However, if you want a loan, we have recent examples from clients in our network that bought residential property as a foreigner with a mortgage from a Japanese bank. It is possible and there are some scenarios that work. For more about real estate loans in Sapporo, contact us, we’re happy to share what we know.

Real Estate Taxes in Sapporo

As you complete the process of buying a house in Sapporo, there will be various taxes due (and some may be due as you sell property in Hokkaido as well).

Some basic taxes to consider are the simple taxes due at the closing of the sale (your agent will help you to be prepared for those). Then there are the Sapporo real estate acquisition taxes (which are like a sales tax on real estate in Japan); these come after the sale, with a different assessment made for both the land and any structure on the property. And then, property taxes in Sapporo are due four times a year.

A local Sapporo tax accountant can help you to be aware of any deadlines, and can provide tax consulting for how taxes can be included in your income tax planning for foreigners in Japan.

Local Sapporo Real Estate Agents

As part of our core service to clients, we have introduced buyers from all over the world to local Sapporo Agents that have helped them purchase residential and investment property in Sapporo and across Hokkaido. If you have a budget and would like to begin a search for property in Sapporo, contact us, we’re happy to introduce you to agents that can help.

If you need a temporary apartment in Sapporo, or for help with lawyers or taxes in Sapporo, we can make those introductions as well.

We work for you, not the real estate companies.

We provide person-to-person introductions to prescreened agents that help you sell, buy, lease, or rent property in Hokkaido. We search our custom database to connect you to real estate professionals that speak your language, address your needs and are available now to help you find what you want.

Local. Trusted. 100% free to you.

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Phone

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For More Information:

— Average Price for a House in Sapporo
— Renting an Apartment in Sapporo
— How to Rent an Apartment in Sapporo
— Buying Property in Hokkaido as a Foreigner
— Cost of Housing in Otaru
— Cost of Housing in Niseko
— Cost of Housing in Asahikawa
— A comparison of the Average Cost of Land in Niseko (vs land in Sapporo)
— Estimates of Foreigners Living in Niseko
— Find Lawyers in Hokkaido
— Our Taxes in Japan page