What is the process for selling this property in the future, and what are the agent fees?

Okay, no problem. Selling a house in Japan is actually a fairly standardized process, don't worry. I'll walk you through it step by step, keeping it as straightforward as possible.

I'm thinking of selling this property in the future. What's the process? What are the agent fees?

Hello! Having sold property in Japan myself and helped friends with it, I know it can seem complicated, but it becomes clear when you break it down step by step. Below, I'll outline the entire process and the associated costs for you.

1. Detailed Selling Process (Step by Step)

Think of the whole process as having these main stages: "Find a good helper -> Set a good price -> Find a buyer -> Complete paperwork and get paid".

Step 1: Find a Reliable Real Estate Agent (The Most Crucial Step)

Why is it important? Selling a property privately in Japan is extremely difficult; almost all transactions are handled through agents. A good agent will handle most of the work for you: valuation, marketing, viewings, negotiations, contract preparation, etc.
How to find one? You can contact the agent you used when buying, or approach major real estate companies in the area (like Mitsui, Sumitomo, Tokyu, etc.) or local agencies. It's recommended to consult with 2-3 agents to compare their valuations and sales strategies.
Signing the Brokerage Contract: Once you choose an agent, you'll sign a "Brokerage Contract" (媒介契約). There are two main types:
- General Brokerage Contract (一般媒介契約): You can list with multiple agents simultaneously. The one who finds the buyer gets the commission. Advantage: Wider exposure. Disadvantage: Agents might be less proactive since they aren't guaranteed the commission.
- Exclusive Brokerage Contract (専任媒介契約) (Recommended): For the contract period (usually 3 months), you list exclusively with one agent. They will work much harder to sell your property since they are guaranteed the commission if it sells. They are also required to provide regular progress reports. This is the choice for most people.

Step 2: Property Valuation and Pricing

The agent will provide a "valuation price" (査定価格) based on the property's condition, recent sales of comparable properties nearby, and market trends.
This is just a reference price. The final "listing price" (売出価格) is decided by you in consultation with the agent. It's common to set it slightly above the valuation to leave room for negotiation.

Step 3: Sales Activities Begin

After signing the contract and setting the price, the agent starts marketing.
They will arrange professional photography, list your property on major Japanese real estate portals (like SUUMO, HOME'S, etc.).
Create flyers and potentially display it in their shop window.

Step 4: Arranging Viewings (内覧)

When a potential buyer is interested, the agent will contact you to schedule a viewing.
Your job is to make sure the property is clean and tidy to make a good impression. The agent will be present during the viewing to explain details; you can choose to be there or not.

Step 5: Buyer Offers and Negotiation

If a buyer is interested, they will submit a "Letter of Intent to Purchase" (買付証明書) through their agent. This states their proposed purchase price, payment method, etc.
The offer price is usually lower than your listing price. This is where negotiation happens. Your agent will negotiate on your behalf with the buyer's agent to secure the best possible terms.

Step 6: Signing the Formal Sales Contract

Once the price is agreed upon, it's time for the most critical step.
The agent will arrange a meeting where the buyer, seller, and agents sign the formal "Real Estate Sales Contract" (不動産売買契約書).
Before signing: A licensed "Licensed Real Estate Transaction Specialist" (宅地建物取引士) from the agency will spend considerable time (often 1-2 hours) explaining the most important clauses of the contract to both you and the buyer. This mandatory legal step is called the "Explanation of Important Matters" (重要事項説明).
On signing day: The buyer pays a deposit ("Earnest Money" - 手付金), typically 5%-10% of the total price.

Step 7: Settlement and Handover (決済・引渡し)

About one month after signing (the exact timing is specified in the contract), the final settlement and handover occur.
This usually takes place at the buyer's bank (if they are using a loan).
The process:
1. The buyer transfers the remaining balance to your account.
2. You confirm receipt of the full payment.
3. Simultaneously, a legal specialist called a "Judicial Scrivener" (司法書士) goes to the Legal Affairs Bureau (法務局) to process the change of ownership registration (title transfer).
4. Once the registration is complete, you hand over the keys to the buyer.
5. The transaction is complete! You then pay the agent fees and other outstanding costs.

2. Agent Fees and Other Major Costs

The money you receive from the sale isn't pure profit; there are necessary expenses.

1. Brokerage Commission (仲介手数料) - The Major Cost

This is the fee paid to your real estate agent. Japanese law sets a maximum fee, which most agents charge.

Calculation Formula (Simplified): (Final Sales Price × 3% + 60,000 Yen) + Consumption Tax
Example: If your property sells for 30,000,000 Yen.
- Commission (Excl. Tax) = 30,000,000 × 3% + 60,000 = 900,000 + 60,000 = 960,000 Yen
- Consumption Tax (Currently 10%) = 960,000 × 10% = 96,000 Yen
- Total Commission = 960,000 + 96,000 = 1,056,000 Yen
Payment Timing: Usually split into two payments: Half when the sales contract is signed, and the other half at settlement/handover.

2. Stamp Duty (印紙税)

A tax paid by affixing revenue stamps to the "Real Estate Sales Contract". The amount depends on the contract value (higher price = higher tax).
E.g., For a sales price between 10 million and 50 million yen, the stamp duty is 10,000 Yen (subject to potential temporary reductions). This cost is small, and each party pays the stamp duty on their own copy of the contract.

3. Judicial Scrivener Fees (司法書士報酬)

The Judicial Scrivener charges a fee for handling the ownership transfer registration. This fee typically ranges from tens of thousands to over a hundred thousand yen. For the seller, this mainly covers costs like processing the "Mortgage Discharge" (抵当権抹消) if you had a loan on the property.

4. Loan Early Repayment Fee

If you still have a mortgage on the property, you must repay it in full upon sale. The bank will charge an early repayment fee; the amount depends on your loan agreement, usually tens of thousands of yen.

5. Capital Gains Tax (Transfer Income Tax) (The Tax to Pay Most Attention To!)

If your selling price is higher than your original purchase price (plus associated buying/selling costs), you have made a "profit" (capital gain), which is taxable.
Simplified Calculation: Profit = Selling Price - (Original Purchase Price + Buying/Selling Costs)
The tax rate depends critically on how long you owned the property:
- Short-Term Holding (Owned ≤ 5 years): Very high tax rate, approximately 39.63% (including resident tax).
- Long-Term Holding (Owned > 5 years): Significantly lower tax rate, approximately 20.315% (including resident tax).
[Extremely Important Tax Saving Policy] If you are selling your primary residence (your own home), there is a major benefit: Up to 30 million yen of your profit is tax-exempt! This means if your profit is 30 million yen or less, you generally won't owe any capital gains tax on the sale. Most people can utilize this exemption.

To Summarize:

The most crucial part of the whole process is finding a good agent; they will guide you through all the steps. Regarding costs, the biggest expense is the brokerage commission (a little over 3% of the sale price). Secondly, pay special attention to capital gains tax, but if it's your primary residence and you've owned it long enough, utilizing the 30 million yen exemption usually means you won't owe much, if anything.

I hope this explanation helps! Don't feel overwhelmed; when you're ready to sell, your agent will provide you with a detailed breakdown of the process and costs, making everything much clearer.