Home measuring

Contract Closing (Aug. 19)

We will be closing on the house on Aug. 19th and receive the keys. It sounds like we will meet again with the sellers, transfer the money directly to them, pay the real estate agents and title transfer type fees on that day. I assume we will sign off on some final docs as well. The big difference from back home, is that there is no escrow account, so instead we have a direct face to face meeting to accomplish these final steps. Part of the day will be at our bank, making transfers and payments. For buyers taking out a loan, I assume there are a few more steps with the loaning bank.

Home Prep

M will start school on Aug. 22, so we want to move in and settle in as quickly as possible, but there are a few things we’ll need before we can live there.

• Air Conditioner - It’s been a hot summer, and we absolutely cannot live there without AC. The previous owner looks like they removed the old AC units. They were probably old and needed replacing anyway. The real estate company arranged to have new units installed (2 bedrooms and the living/kitchen) on the 20th. They dealt with the trouble of meeting with the installers, getting an estimate and arranging delivery.

• Beds - It looks like inventory is a bit sparse on mattresses, especially anything over a double sized bed. We would like a queen size bed, but need to measure to make sure it fits in the master bedroom.

• Appliances - We will need to buy a fridge and washing machine. We probably need about a weeks lead time to have this delivered if they have it in stock.

• Some furniture - Lower on the priority list, but we’ll need a place to sit, eat, etc.

Mister Donuts

All this home prep stuff is going to require some motivation and energy. Why not stop by Mister Donuts! This place reminds me of Dunkin Donuts, but I do miss the Happy Donuts we ate at home. The donut hole sampler was a good choice here.

Measuring the place

We made an appointment with our real estate agent to meet at the new home and take measurements. He was nice enough to bring a laser measurer and a curtain tape measurer, and helped us write down stuff. What was a bit surprising was that the washing machine space is not really standardized, so we needed to measure the pan size (plastic base that drains water) and the wall space around it. Overall, the place has no AC right now, so it was pretty hot. M got to borrow a personal fan, which is all the rage in Japan right now. All the girls seem to be carrying mini battery powered electric fans.

We also hadn’t been to our place since our initial viewing, so it was nice to remember what we bought! The living/dining room will have enough for a 3 person couch, 4-6 person dining table, coffee table and TV stand. Maybe a bean bag or two as well.

Living room view of the nearby park and river.

Our kitchen has a Japanese size dish washer and it looks like it has not been used at all. The previous owner was a single older gentleman, who probably never ate at home. Did I mention there are a bunch of restaurants/ramen places nearby? We will probably eat out a lot too.

The master bedroom will fit a queen and a dresser, but definitely not a king. There is some decent closet space built into the walls, so we may not even need a dresser just yet.

Money Matters

To make the real estate transaction go smoothly, we need a Japanese bank account to hold the money and then make bank transfers to the seller on closing day. I assume if we were a foreign buyer without a local bank account, then maybe they would arrange an intermediary account to use with some extra fees.

To start the contract, we did the following:

• pay 5% of the sale price to seller
• pay 1.5% of the sale price to our real estate agent. (Seller pays their own agent separately)

On closing date, we will transfer/pay:

• remaining 95% of the money to the seller.
• property tax/condo fees prorated to the seller.
• 1.5% to our real estate agent. (Seller pays their own agent separately)
• Title transfer fees (220,000yen (or $1700 USD))
• Some other smaller fees/taxes, but the above are the big ones.

Also note, there is 10% sales tax on the real estate agent fees, so it’s more like 3.3% total.

Transferring Money

We initially looked into Wise (formerly known as TransferWise) and did an initial transfer for the deposit. This worked well for my wife, since she has both a target account in Japan as well as in the US. The fees were 0.5% of the total amount being sent, which included converting dollars to yen which is where most of the costs are when sending in different currency. However, even 0.5% is a lot of money when you send large amounts. The other challenge was that my brokerage account is in my name, but we only have my wife’s bank account in Japan.

After digging a bit more, we found a better solution using my Interactive Brokers (IBKR) brokerage account. I have been using them for over 10 years, and as for trading securities, it does seem to offer the best breadth of stocks, options and even margin rates. Another nice feature is the ability to wire transfer internationally using SWIFT in just about any currency. Since IBKR also trades in Forex, I put in some limit orders for trading into yen and converted just enough for buying our place. Incredibly, IBKR also gives you a free wire transfer per month, so it was essentially free to send money!

There was still the catch of sending to an account not held in my name, so I had to jump through a couple hoops but sending to yourself and to your spouse is ultimately allowed. First I had to set up her account as a target for the transfer, which then required proof that she is my spouse. We sent in a photo of our marriage certificate, and they reviewed and approved the account. Then I set up the actual transfer in yen, and that required a phone call validation with their support team. It took about 10 minutes over the phone to verify via 2FA and answer some questions as to why I was sending the money. They said this was necessary the first time, and for large transfers. It’s a minor annoyance, but just plan for about a week to move the money from end to end. Then my wife received a call, and she had to verify and fill out some paperwork on the Japanese bank side, which we assume is to similarly prevent hacks, money laundering and leave traces/records.

She also had to pay some fees for receiving the wire transfer, but is true even when using Wise or other wire transfers.

A side benefit doing this in IBKR account, was that I could be flexible with the timing of currency conversion, so long as it was prior to sending the money. And I could also wait to sell securities, by using margin even after the money was sent. Since margin rates are low, and the market was in inflation turmoil last month, this was quite advantageous to wait out the turbulence and wait for greener days. Of course, timing any market and margin adds an element of risk, but the last few months weren’t exactly typical, and I am optimistic that things will return to calm within a year. Interesting coincidence though, the yen grew weaker as the markets were dropping, so the cost of the house in terms of net worth was somewhat stable. I will be first to admit though, that yen weakness was purely dumb luck in terms of timing for us being in Japan.

Longer term, I will open my own bank account but it requires me to be in Japan for at least 6 months with my resident’s card, or get a job locally (which I presume necessitates a bank account for payroll). The gist seems that banks don’t want to allow US nationals to hold bank accounts without long term residence, and deal with tax related reporting requirements across two countries. It seems these rules might be different for other passport and visa holders.

Summary

Now that we have some measurements, we can go appliance and furniture shopping. Let’s hope we can get the minimal stuff needed to move in quickly. Until our place is ready, we will be staying at an apartment hotel just a couple blocks away. That hotel is relatively inexpensive, but we will be crammed in a studio with minimal kitchen and it will be tight for the 3 of us.