I just binge watched the show.
I also know real estate scams have been a thing in Japan from bubble and even recently which what the Netflix series is based on. Realtors have told me it's not a reputable job/ business in Japan.
For those who saw the series or not, the scam is to impersonate the seller w forged docs. Then after sweating out an arbitrary interview (like what color is the awning of your local combini ???) then they agree and close the deal and wire the cash — only to find out 1wk later then official deed transfer found an issue (stamps don't match most likely).
Anyone know why/how this is a process in Japan? You would think the deed transfer would happen at cash exchange or be held at escrow (yes I know escrow isn't a thing here).
(Apologies if this isn't investment topic but perhaps understanding the risks and controls of real estate purchasing is useful for potential investors)
by fandomania77
10 comments
Fax Machines
If you are not buying big commercial buildings in Japan, don’t consider houses as investing. They lose their value as they age. They do not go up in value. Why do you think there are millions of vacant houses which nobody wants? It would cost really big money to make them livable and you will never get that money back.
Check out the manga and NHK TV drama 正直不動産 I learnt a lot about variety of real estate scams and gotchas through that show. Two episodes I recall that might be specifically relevant to this forum were related to buying 1K unit for the purpose of renting and another one related to pair loans for mortgage.
Real estate agents are constantly going around to other real estate agencies, handing out their cards and greeting each other. They also do many small deals, engaging in negotiations with other agencies and preparing contracts together. This is how they create trust and build a reputation over the years.
When larger deals are made, the parties involved will contact real estate agencies with good reputations. Many already know each other from other deals. Ultimately the buyers and sellers are paying fees to such companies to ensure the process is transparent and clean.
The Tokyo Swindlers show portrays a very large deal being handled by an unknown agency. This is unusual. Even medium sized agencies know each other, or know about each other. You rarely see an agency with only one property for sale or no recent contracts.
Also, judicial scriveners are supposed to be independent judges of the parties involved. This is why the buyer’s agent usually suggests a judicial scrivener, because the buyers are at risk of losing money.
The sellers will choose a judicial scrivener when the seller is a licensed broker or builder. But that kind of seller is easy to sue in case of some sort of malpractice.
The problem in Japan is that there is generally no escrow. The legal registration of title and mortgage (in almost all cases) occurs after the cash has been transferred. The registry is locked in a matter of minutes but not confirmed for a couple of weeks – if there are issues with the documents it can be a problem.
Scams are everywhere, and they stand out even more in countries with such low criminality like Japan; always do your due diligence and work with established companies.
I haven’t watched the show, but if you want a recent example, there was a large, old ryokan in Gotanda that was [fraudulently sold for 5.5 billion yen in 2017](https://www.ctbuh.org/news/former-ryokan-in-tokyo-to-become-30-story-condominium-tower). I’m kind of disappointed I never stayed in it before it closed.
It was a movie, so they had to make it interesting.
While there’s probably some measure of truth to the story, no company would ignore due diligence to the level portrayed.
The real scam was how big developers in major cities “persuaded” single-family or small units to move through a cascading chain of businesses that couldn’t be traced back to the developer.
This is a story from 1990, so to the best of my memory…
The guy/couple we bought our house from was very nice, but at the time money started changing hands he announced that we were getting a deal since what we were getting was actually two properties. He explained that years before he had bought what he thought was an adjoining small parcel (now being used as extra parking area). The agents were like, hey wait, what’s going on here.
It turned out that he had been scammed, and that he had owned the full property all along. He’d been led to believe that that part of his property was not his, and the scammer then “sold” him that.
It didn’t affect the deal, which went thru normally (for as much as I knew about real estate at the time).
There is a reason real estate agents all over country exist you know.
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