Real Estate in Japan – Cashflow, Honesty & Honor
I’ve been intimately involved with Japan, its business environment, culture and etiquette for the past decade or so. I’ve lived there, on and off, for up to a year at a time. I speak the language partially (just a bit, to be honest, and a highly “domesticated” bit at that), and have, in recent years, even had some limited success at reading and writing it (I learn alongside my 3 year old son – he’s doing far better).I work for a Japanese company. I’ve purchased properties for my own investment interest and personal use, as well as on behalf of quite a few clients. I’ve guided and assisted, along with my Japanese partners and team members, investors, entrepreneurs, business-folk and even farmers in establishing, maintaining and nurturing their Japanese business relationships.Hell, I’ve even organized and held a garage sale in Tokyo once! (funny story, that, but I digress)All of the above isn’t meant to show off – merely to drive home the message that, all this fair bit of hands-on involvement would, in most places around the world, reasonably lead one to say that “I know Japan”. Well, do I?No – I don’t. Not even close to it.And not just because I’m thick as a brick (well, it might also be that), but because there’s simply so much more to learn. Japanese culture, like many of its Asian counterparts, is ancient, complex and has nuances upon nuances upon nuances, with some extra nuances neatly tucked away at the bottom of things – so that just when you think you’ve actually uncovered said bottom, another nuance smiles at you shyly (and politely!) from under the previous ones.And in Japan’s case, those nuances invariably have something to do with “honour”, “respect”, “face”, “reputation” and all the rest of them ancient, chivalrous words – words that one would normally expect to read about only in Arthurian legends of knights and maidens, or maybe in the accounts of Buddha’s path to enlightenment and all-encompassing love – and certainly not in the context of business, investments and real-estate.
Well, fear not, Mother Theresa, your legacy is safe and sound in the land of the rising sun.Want an example? Something close to home, perhaps? Check this out –Japanese Realtor’s “code of honour” (yes, it does exist, although they’d never dream to call it that), dictates that, once a seller has accepted an offer, regardless of whether they’ve signed anything, received a deposit, or even if the realtor hasn’t yet picked up the phone to report to the potential buyer that their offer has been accepted – from that moment on, NO OTHER REALTOR WILL SUBMIT FUTHER OFFERS TO THIS SELLER. And not just equal or lower offers, too – they’ll decline, without batting an eyelid and without even letting their client know about it, higher offers as well. Even if the next offer is set at double the asking price (meaning double the realtor’s commission as well) – the seller will never hear about it. The prospective client will be politely declined, and informed that “a previous offer has been accepted”. End of story.And this is not just from the realtor who forwarded the offer – not just from that realtor’s agency – NO OTHER REALTOR IN JAPAN will forward offers on said property, if they’re aware of a previous offer having been accepted. That property simply ceases to exist in their mind (at least until several months have passed, and it goes back on the market, for whatever reason). There’s no law, regulation or legal reason that would enforce this code. There’s no way for anyone to prove that it’s even been broken. And still they won’t do it. Why? Well, because “it’s not the Japanese way”. A deal is a deal.