What is a 'Letter of Intent to Purchase' (購入申込書 - kōnyū mōshikomisho)? Does it have legal binding force after submission? Is negotiation possible?
Okay, let's break down the "Purchase Application Form" (購入申込書, Kounyu Moushikomisho) for buying property in Japan. It's actually not that complicated.
What is the "Purchase Application Form" (購入申込書)?
Simply put, the "Purchase Application Form" is a written document where you formally express to the seller, "I'm very interested in this property and genuinely want to buy it."
Think of it like a formal declaration of interest in the dating world, not the marriage certificate. Through this document, you clearly tell the seller:
- Who you are: Your name, address, contact information, and other basic details.
- Which property you want: The specific details of the property you're interested in.
- Your offer price: The price you are willing to pay (this is crucial!).
- Your payment plan: Whether you plan to pay in cash or need a mortgage (住宅ローン, jutaku loan).
- Any other conditions you desire: Such as your desired closing date or any special requests.
Its main purpose is to elevate you from a "just looking" browser to a "serious prospective buyer," especially when a popular property might have multiple interested parties. Sellers and agents will prioritize your request and begin formal negotiations with you.
Is it Legally Binding After Submission?
In short: No.
This is the most common concern and misunderstanding. After submitting the "Purchase Application Form," neither you nor the seller is legally bound.
- For you (the buyer): If you submit it but later can't get loan approval or find a property you like better, you can usually withdraw this application without any financial penalty.
- For the seller: After receiving your application, the seller might reject it because they think your offer is too low or because someone else offered a higher price.
Remember, the real main event, the legally binding document, is the "Purchase and Sale Agreement" (不動産売買契約書 - Fudousan Baibai Keiyakusho) that comes later. That's the "marriage certificate." Once signed and sealed, backing out usually means facing contractual penalties (like paying a cancellation fee).
So, you can think of the "Purchase Application Form" stage as a "cooling-off period" and a "negotiation period," where both sides are testing and confirming each other's sincerity.
Can I Negotiate the Price?
Absolutely! And this is one of the most important functions of the "Purchase Application Form"!
Don't take the listed price as final. The "Purchase Application Form" is your opening shot in the price negotiation.
- How it works: Instead of haggling verbally with the agent, you directly write the price you consider reasonable and are willing to pay in the "Desired Purchase Price" section of the form. This price can be lower than the seller's asking price.
- The negotiation process: After seeing your offer, the seller might react in several ways:
- Accept directly: Everyone's happy, proceed to prepare the contract.
- Reject outright: If your offer is way too low, the seller might simply ignore you.
- Make a counter-offer: This is the most common scenario. The seller might say, "Your offer is too low, but I'll sell if you can come up to XXX million yen." The agent will relay this to you, and it's then your turn to decide whether to accept or make another counter-offer.
A small tip: Keep your negotiation range reasonable. Have your real estate agent analyze the property's market value, the seller's motivation, etc., beforehand to help you determine a price that's both sincere and advantageous for you. A good agent can be a huge help at this stage.
In summary, the "Purchase Application Form" is a crucial tool in your home-buying process. It helps you secure a place at the negotiation table, demonstrate your serious intent to buy, and initiate formal price discussions, all while giving you the flexibility to walk away "without obligation" at any time. Use it well!