Bidding On Court Auctioned Real Estate

[homesweethome]

I got a question from someone: "In buying court auctioned property have you or anybody you know had a bad experience."

We have purchased several properties this way (through the court) and I can't say any of them have been "bad" because we knew what we were getting before we put in a bid.

My questions are:

1. Has anybody bought distressed property in Japan as an individual?

2. What was the overall result, did you get what you wanted? Would you recommend this method to others?

This site lists court auctioned properties all over the country with pictures.
http://www.athome.co.jp/kankou/#

Anyone care to comment?

[dimwit]

I friend of mine has done the same thing and land ended up being a bargain. His warning to me was that if you do go for distressed land make sure that the distressee is not a Yak who got creamed in the bubble or you are likely to be the one who is distressed.

[steve017]

My wife and I bought a house this way. Turned out to be a really good deal for us. The house itself required some work, but my wife's uncle has a construction business so we were able to get it done reasonably. Basically, the work was mostly cosmetic--fixed some holes in walls, re-wallpapered a few rooms, put in a new camera door monitor, and put in a new bathroom.

Aside from that, we were lucky. We had heard you have to be careful about this kind of thing because there are many potential *problems*. You often cannot see the inside of these properties, except if they have photos. If there is a rental unit in the property and the renter refuses to move, it can be difficult to get them out. In many cases, you may even have to pay them to leave--the cost of moving, etc. Yikes! Also, if the owner leaves *anything* in the house, you must get their permission to throw it out or make arrangements for them to pick it up. If you cannot, either you must store it at your own expense, or you can opt to have the court store it, but this will cost you as well.

As I said, we were lucky. The people that owned our house before us were very nice. They had just fallen on hard times--their child was disabled--and they had to move to get him better care. But, they could not afford the house anymore. When we contacted them, they said we could do what we wanted with the stuff they left behind (tv, computer, 2 air conditioners, etc.), and they even sent us the instruction manuals, tips on using the stuff, and the original paperwork for the house (blueprints, etc.).

Since moving in, we have continued to work on the house, to our neighbor's delight. We recently finished the first stage of re-landscaping our property and it made a huge difference in appearance and usability.

Overall, I would say this is a good way to get a decent house. But, of course, you have to be willing to take the good with the bad.

Steve

[inthebubble]

I agree steve you must be careful, but in most cases if you are reasonably handy these deals are a bargain. On the other hand, since I was part of this next scenario, I totally disagree. If a building has a rental, and there becomes a new owner (you buy it) the new owner can evict the tenants with no restitution and for no reason within ten (yes 10) days and the renter has no recourse. Since the contract they signed was with the old owner and not the new owner there is no contract. In most instances the new owner can/will let them stay, but not always. I was evicted and was told by the judge that if my stuff is not out in ten days a moving company will come and take it all and put it in storage (which of course I must pay for).

[steve017]

Sounds great when you put it that way. But, I'm not talking about an ideal situation. What I was talking about is not the law, but the fact that in Japan, judicial judgements such as these are pretty much unenforcible. You can't call the police to remove a renter from your house that has been evicted, at least that is what I have been told. You can't force someone to pay if they refuse, even if you have a judgement.

The problem with them having to pay (the renter) is that they might not. From what I was told, if they don't pay, you (the house owner) have to pay and you can sue them for the costs. But, again, if they won't pay the court, why would they pay you (after you sue them for the costs)?

The problems I am talking about are not related to how the system should work, but how the system works when someone decides to cause trouble. The fact is, it seems, that the system doesn't really work in those situations unless you have the funds to make it work.

Recent changes in the rental laws make it easier to remove unwanted tenants from rental properties for sure. But, just because the law says so and the courts say so doesn't mean things will be easy.

In regard to these distressed homes, I think you are far more likely to find these kinds of situations, and in fact, when looking into buying a house this way, this was the type of thing we were warned about. We also went to a lawyer to ask about it, and his advice was that if a tenant refused to leave that the cheapest and easiest thing to do was to pay them to leave.

Inthebubble, I'm not saying that you are wrong in what you say. Obviously, you have been through this and know what's what. I was only trying describe some potential problems, and a renter refusing to leave is definitely one. Yes, you are right, there are systems in place to handle this, but they only work when people agree to work within the system. If someone does not, the system fails, and then it is up to you to deal with it.

Even with the potential problems, buying a house this way is a great way to get a decent property at a good price. It's not always cheap, but I'd certainly recommend people consider it.