One of the most frequently asked question from our foreign clients is, “Is the price negotiable? How much can I get a property discount?”.

The most important fact in Japanese real estate market is, the seller will decide to whom to sell at how much.

If we think from the viewpoint of the seller, it is easy to understand how the buyer better act. Please imagine that you are a seller who wants to sell your house spent a long memorable time with your family.
You are planning to sell your lovely house because of some unavoidable reason. There is a buyer approached you as “I am a customer who will pay you the money. Ok, I will buy if you make this amount discount”.
This attitude is not well accepted in Japan. The selling price is “seller’s willing price to sell”, so this attitude is somehow ignoring the seller’s intention.
Instead, if a buyer approached the seller as “I respect your selling price, but because of the reason A & B, I wish I could buy at this discounted price which seems reasonable considered the current market situation.” This attitude is respecting the seller’s willing price, so the seller may also respect your request.

If a property is very much attractive, the location is good, the condition is good, and the price is good, there will be a competition between several customers even at the full price requested by the seller without any discount.
Generally the price will not go higher than the original selling price, so the seller will choose a buyer among the buyers only offered at full price, with another aspect than price to whom to sell. It means, buyers’ attitude and impression to the seller are very much important to be chosen from the seller.

When you visited your interested property, you will check the location and condition etc. of the property, but meantime the seller is checking buyers. The seller wants to make a good deal same as you without feeling uncomfortable. The buyers’ first priority may be to save money, but the seller’s priority may be to finalize the good memory of the property by selling to a buyer who can conclude the memorable property nicely.

Please imagine if you are a seller, and there are 2 buyers who are both willing to buy your property at the full amount of your willing price.

One buyer visited your house on time at the property viewing, and another buyer visited 15 minutes delay from the agreed time without advance notice. Which buyer do you have a good impression?

One buyer will pay the full amount using their cash, and another buyer will buy using a housing loan. In case of using a housing loan, generally there is a special cancel condition for the buyer that, the buyer can cancel the deal without penalty in case the loan was rejected from the bank. Which buyer do you prefer to deal, a cash buyer without cancellation risk, or a loan buyer having a cancellation risk?

Consequently, to be chosen from the seller, it is important to give your good impression as much as possible to be selected as the most trustable buyer without having a risk of dealing.

What if the case that there is no buyer appeared? If a property is not sold for a certain period at the seller’s willing price, then generally the seller will start think to reduce the price.
Sellers always want to sell the property at the highest possible price, so there is no reason to make a discount to a buyer who appeared just after started to sell. Normally the sellers will reply as “I just started to sell in the market and I want to see if there is a buyer who is willing to purchase at my willing price”. So even if you asked for a discount soon after the property has newly arrived in the market, the possibility of getting a discount is low.

If the property is not sold for a month, the seller may reduce the selling price, but there will be no big price drop such as half price. Generally the prices will be gradually reduce such as 198 million JPY -> 189 mil JPY.

Considered above points, the buyer’s choices are considered between
1. Buy immediately at a full price before another competitor appears.
2. Wait for certain period to get the lower price than the current price.

It is very difficult to make a judgement, since there is always a risk that another competitor will appear suddenly and buy at full price.

So what we always try is, to assist our clients to find an irreplaceable property which worth paying even at the full amount of the selling price. Of course, we will negotiate and find a chance to get any discount always, but the discount cannot be expected always. The disappointment of not being selected from the seller is big, rather than not getting any discount.

If you have any further questions or requests, please feel free to contact to the following e-mail address.

【REDS】Real Estate Distribution System (REDS) Japan

Hiroki Kano (Mr.)

mailto: hi.kano@red-sys.jp