4 Things to Look for When You Submit a Purchase Application
After viewing a property that you like, you might be interested in buying it.
For those who consider buying a property after viewing, the next step would be “submitting a purchase application form.”
In general, you have to submit a written form to a seller to show your interest in their property. If you find a property through other agents, they might ask you whether you would like to submit this form or not.
What is the process of submitting a purchase application?
The process would be different depending on whether a property is new or not.
If it’s a new property, you submit an application to a company where sells this property.
In submitting an application, you might also have to pay “application money,” which is from 50,000 Yen to 100,000 Yen. By paying this money, a seller can know that you are taking this application process seriously.
This money will be used for deposit or a part of purchase price.
If you ended up not buying a property where you submit an application, some company will refund this money. The problem is that there is no legal requirement for the company to refund this money.
For this reason, I highly recommend you to make sure what this money will be used for and gain a written form from the company that shows the date of payment, the amount of money and the purpose of this payment.
If it’s a second-hand property, it’s common to submit an application through broker agent. (In this case, application money is not necessary.)
This form is known as 買付証明書 (kaitsuke shomeisho).
This form includes the desirable price, payment method and the date of handing over a property.
If a seller accepts your application, that means seller seriously consider selling their property to you. Because of that, usually you can’t reject it once seller accepts your offer.
4 Things that you should be careful when you submit an application
We walked you through what the purchase application form is and the process of submitting the application.
Here are the 4 things that you should be careful about when you submit an application!
1. You can negotiate the purchase price in application form
If the seller accepts your price, it means you succeeded in negotiating the purchase price! However, you should keep in your mind that making low offers might be upsetting to the seller. In the worst-case scenario, the seller will be unwilling to accept the application with a slightly higher price when you resubmit it later .
It is key to present your offering price by stating facts or giving a comparison with the market price.
2. This application is not legal binding
Because the application is not legal binding, you should be aware that there is a possibility that seller might withdraw their offer prior to you signing a contract.
3. No legal obligation, but a moral obligation
Although this application does not create a legal obligation as mentioned, there is a cultural understanding of a moral obligation to buy it once the seller accepts your offer. Some people submit an application to multiple properties because of this non-legally binding aspect in order to secure a guaranteed property transaction. Unless you are looking for purchasing multiple properties, it is probably best not to submit an application to multiple properties, otherwise you might end up having to buy all accepted offers. It’s best to submit the application only when are you seriously considering buying the property with the appropriate funds available.
4. It’s not first come, first served
When it comes to making an offer, it’s not always “first come first served.” In other words, the seller has the power to choose applicants selectively. For instance, if the seller intends to prefer those who are willing to buy a property with cash more than those who need to apply for a housing loan, there is no guarantee that a first submitted application will be accepted. Similarly, the seller could also choose those who are willing to pay the full amount of sale price over those who offer reduced prices. So although you may be the first person to submit your application, there is a possibility that the seller will selectively choose another applicant’s offer based on preference.
Submitting an application is not a difficult process, however, it is best to do some research beforehand to formulate a reasonable offer the seller is less likely to refuse.
If you have any questions or would like to arrange a viewing, please feel free to contact us!