Get on it

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Small item in the Tokyo Shimbun reported that on Sept. 8 the land ministry announced a policy to “step forward” in developing a system to provide potential homeowners with information about earthquake-proofing and renovation histories of used properties put on the market. As it stands, real estate agents who list homes for sale include information about price, layout, size, age, and location, but usually not much else unless you ask, and even then they are sometimes reluctant about things like quake-proofing since they don’t want to be responsible for such information. As far as renovations go, if the work was done recently in order to improve the value of a property, then, of course, the realtor will mention it, but if the work was done in the past there’s not much reason to if the cosmetic benefits are negligible.

The purpose of the land ministry policy is to expand the housing market to include more used homes. In 2008, only 13.5 percent of all homes sold in Japan were used, while the portion (in 2009) of same in the U.S. was 90.3 percent and in the UK 85.8 percent. The ministry thinks that if consumers had “more confidence” in used properties they would buy more. Typically, the ministry doesn’t have any concrete measures in mind to accomplish this confidence-building, but in the next budget they plan to ask for ¥50 million for “study,” meaning, presumably, looking into ways to help realtors include this information in their listings. Would they actually pass a law making it mandatory for realtors to tell potential buyers if a property was quake-proofed? That would be quite an undertaking since a lot of homeowners don’t even know the extent of the quake-proofing on their structures, or if there is any at all. All homes and condos constructed after 1980 are supposed to have been built to quake-proof standards, but given lead times on construction the standard probably didn’t become a full standard until the mid-80s. In any case, no one has done a proper study to find out how strictly the standards were carried out. One problem the ministry will have to consider when it spends its measly 50 million is what potential buyers can do to find out about quake-proofing. If a realtor doesn’t have that information and a buyer wants to know, who is going to pay for the inspection? For a single-family home a quake-proofing inspection can cost hundreds of thousands of yen; for a condominium building, a cool million. It’s easy to see why realtors, and the sellers they represent, want to avoid the subject, but the ministry doesn’t have that luxury. They say they want to stimulate the used housing market, but if there’s no reliable and reasonably priced system of assessing something as basic as quake-proofing then maybe the market isn’t even worth it.

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2 Responses to “Get on it”

  1. Brad Says:

    in other countries throughout the world a pre-purchase inspection is mandatory to protect the interests of both the buyer and their finance company. the onus is on the seller – not the buyer. this then ensures that all information is provided and the buyer makes in informed decision, not merely based on what realestate agents and buyers may know, which is pretty much nothing, about construction and maintenance. It in a similar way is akin to the local govt making progress inspections on new builds to ensure the structure is certified and what was approved for construction is actually what is constructed. not difficult really.
    some buyers may well be looking for properties that do require some work as they can provide the labour themselves and save on the initial purchase. there really is no down-side to this system that i am aware of.
    again, a soft government stands by and refuses to place responsibility where responsibility should lie to save a few popular votes.
    god knows what the 50mil yen is for when all that will happen is a couple of people searching through google for examples when the money could be better spent on making real change based on worlds-best practice that already exists.

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    • catforehead Says:

      Agents are required to tell potential buyers what they know about the structural situation of a property, but only if the buyer asks. Obviously, this requirement is sort of pointless. Two weeks ago we asked a realtor some structural questions about the house we were inspecting and he said he didn’t know the answers. His excuse was that his company wasn’t the core realtor for this particular house, but he said he would get us the answers and call us back. He never did, probably sensing that we weren’t that interested in the first place.

      All new homes and some old ones being sold by companies (meaning they bought the house from the owner and fixed it up a little) usually come with “warranties” for two years or more, so if the buyer moves in and finds a problem the seller is obligated to correct the problem free of charge. Apparently, there’s some sort of insurance involved. But it doesn’t seem mandatory because we’ve never come across a house being sold by the private owner with such a warranty attached. And, again, you have to know what to ask for or how to read the documents to even understand if this warranty is included.

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