6. The Flow of a Real Estate Sales Contract | Key Points to Confirm Before Signing

This post is a practical guide for foreign property owners selling property in Japan, explaining the process of signing a Sales Contract, the key points to confirm before signing, and the steps from the contract through closing and property handover.

What Is a Sales Contract?

After your property has been marketed under a Brokerage Agreement and you have reached an agreement with a prospective buyer on the purchase price and other terms, the next major step is signing a Sales Contract.

A Sales Contract is an important legal contract that formally confirms the agreed terms and conditions between the seller and the buyer.

Once the Sales Contract has been signed, the sale will generally proceed in accordance with its terms. For this reason, it is essential to carefully review every provision of the contract before signing.

The Process Leading to the Sales Contract

In Japan, the process leading to a Sales Contract generally follows these steps.

When the Sales Contract is signed, both the seller and the buyer normally sign and seal the contract, and the seller receives the deposit from the buyer.

In Japan, the deposit is commonly around 10% of the purchase price, although the amount may vary depending on the agreement between the parties.

At closing, the deposit is generally applied toward the purchase price, with the remaining balance paid by the buyer.

Signing the Sales Contract represents one of the most important milestones in the property selling process, marking the transition from negotiations to preparation for closing and property handover.

Key Items to Confirm Before Signing the Contract

Before signing the Sales Contract, it is important to carefully review the contract to ensure that all agreed terms are accurately reflected.

The contract contains essential information regarding the transaction. If there are any points you do not fully understand, be sure to clarify them with your real estate company before signing.

Carefully reviewing these items before signing can help prevent misunderstandings and contribute to a smoother transaction.

Important Matters Explanation

Before the Sales Contract is signed, a Licensed Real Estate Transaction Specialist provides an Important Matters Explanation.

This explanation covers key information about the property and the transaction, including:

·       Property ownership and legal rights

·       Legal restrictions affecting the property

·       Contract terms and conditions

·       Other important matters that may affect the transaction

Because this explanation is intended to help both parties fully understand the transaction, it is important to review the information carefully and ask questions if anything is unclear before signing the Sales Contract.

For Owners Living Overseas

Even if you live outside Japan, you can still enter into a Sales Contract for the sale of your property.

Depending on the circumstances, it may be possible to complete the contract procedures without traveling to Japan, such as through online contract signing or other available arrangements. Please note that the availability and procedures may vary depending on the specific transaction and the parties involved.

In addition, international document preparation, courier delivery, and scheduling may require additional time.

For this reason, overseas property owners are encouraged to consult with their real estate company as early as possible and allow sufficient time to complete the necessary preparations.

Proper planning in advance can help ensure that the contract process proceeds smoothly and that the transaction stays on schedule.

Points to Check Before Signing

Before signing the Sales Contract, it is advisable to confirm the following points:

·       Whether all contract terms are accurate and complete

·       Whether all required documents have been prepared

·       Whether you fully understand the deposit and the conditions for contract cancellation

·       Whether any questions or concerns have been clarified in advance

Summary

The Sales Contract is one of the most important steps in the process of selling property in Japan.

Once the contract has been signed, preparations move forward toward closing and property handover. By carefully reviewing the contract terms, confirming important details such as the deposit and closing schedule, and resolving any questions before signing, sellers can proceed with the transaction more smoothly and confidently.

Taking the time to understand the contract before signing will help ensure a smoother and more confident selling experience.

Dana Estate Supports Foreign Property Owners throughout the Contract Process

At Dana Estate, we provide comprehensive support throughout the entire contract process for foreign property owners and clients residing overseas.

Our experienced team explains the contents of the Sales Contract in clear and easy-to-understand English and assists you from contract signing through closing and property handover, helping you proceed with confidence every step of the way.

If you are considering selling property in Japan, please do not hesitate to contact Dana Estate for professional advice and personalized support.