A Closing Costs Checklist for Home Buying: Brokerage Fees, Registration Costs, and Loan Fees

Closing costs for a home purchase are made up of several items — brokerage fees, registration costs, mortgage processing fees, and more — each with its own points to check and its own way of getting a quote. Rather than giving a rough total figure, here we set out, item by item, what to check and how to prepare a quote, in checklist form.

Conclusion

Buying a home involves several closing costs beyond the property price itself — brokerage fees, registration costs, mortgage processing fees, and more. Knowing in advance what cost items exist makes your financing plan less likely to fall short or overshoot. Since the specific amounts vary by property and conditions, it's important to check the breakdown at the quote stage.

Brokerage Fee: What to Check When Getting a Quote

The brokerage fee is a cost that arises when you buy a pre-owned property through a real estate agent acting as broker. At the quote stage, it's reassuring to check the following. The maximum amount is set by the Building Lots and Buildings Transaction Business Act and is generally calculated using a standard formula, but the actual amount billed, and how it's split between the contract stage and handover, varies by real estate company. Since buying a new-build condo directly from the seller can mean no brokerage fee at all, whether the transaction is a brokered purchase or a direct purchase from the seller — the transaction type — is also worth confirming at the quote stage.

Registration Costs

Registering the transfer of ownership, and registering a mortgage on the property if you're taking out a home loan, both incur a registration and license tax (tōroku menkyo zei) and a fee to the judicial scrivener handling the filing. The registration and license tax rate is set based on the property's assessed value and the type of registration. Judicial scrivener fees vary depending on who you engage, so it's worth checking a quote. For a pre-owned home, whether a reduced-rate measure applies can also depend on the building's age and the details of the registration, so it's reassuring to check this in advance.

Mortgage Processing Fees and Guarantee Fees

If you take out a mortgage, you'll pay the financial institution's processing fee, and a guarantee fee if a guarantee company is involved. Processing fees come in two types — flat-rate and a percentage of the loan amount — and the structure varies by financial institution. It's important to compare not just the interest terms but the total amount payable, including these closing costs. A percentage-based processing fee grows heavier as the loan amount grows, so choosing a lender comes down to weighing a lower interest rate against higher closing costs.

Other Closing Costs

Closing costs also include the stamp duty (inshi zei) affixed to the sale contract, fire and earthquake insurance premiums, and the prorated settlement of property tax and city planning tax. For a condo, you may also need to settle the management fee and reserve fund for repairs (shūzen tsumitatekin), and pay a lump-sum contribution to the repair reserve fund if one is required. Moving costs and the cost of new furniture and appliances are, in a broader sense, also closing costs that come with relocating — including them in your financing plan makes unexpected expenses less likely.

Closing Costs Checklist: How to Confirm the Figures You Need to Prepare

Because the specific closing cost amounts vary by property price, location, and the financial institution and loan terms you use, it's hard to give a single across-the-board estimate. Instead, checking the following points item by item as you prepare your quotes will improve the accuracy of your financing plan.

• Brokerage fee: Confirm whether the purchase is brokered or direct from the seller; if brokered, ask the real estate company for the maximum-fee formula and the payment timing (e.g., split between contract and handover).
• Registration costs: Since the registration and license tax rate depends on the property's assessed value and the type of registration, ask the judicial scrivener for a quote that also covers whether a reduced-rate measure applies.
• Mortgage processing fees and guarantee fees: Check with each financial institution whether the fee is flat-rate or percentage-based and whether a guarantee fee is required, and compare using the total amount payable, combining interest terms and closing costs.
• Stamp duty, insurance premiums, and settlements: Include the stamp duty on the sale contract, fire and earthquake insurance premiums, and the property tax/city planning tax settlement in your quote. For a condo, also check the management fee and reserve fund settlement, and whether a repair reserve fund contribution applies.

We recommend requesting quotes from your real estate agent and financial institution from the property-search stage onward, and building your financing plan around the total of the property price plus these closing costs. If you'd like a rough sense of the total closing-cost figure before working through each item yourself, feel free to get in touch with us directly.

FAQ

When, and from whom, should I get a quote for closing costs?

It's reassuring to request quotes from your brokering real estate company and your intended financial institution starting from the property-search stage. Checking early, rather than right before signing, makes your financing plan less likely to fall short or overshoot.

Do I always have to pay the maximum brokerage fee?

The maximum is the amount set by the Building Lots and Buildings Transaction Business Act; the actual amount depends on your agreement with the real estate company.

Does the breakdown of closing costs differ between new-build and pre-owned properties?

Many of the items themselves are common to both, but new-build condos can involve costs specific to them, such as a lump-sum contribution to the repair reserve fund.

Summary

Closing costs for a home purchase include a range of items — brokerage fees, registration costs, mortgage processing fees, and more. Since the amounts vary by property and conditions, it's important to check quotes early in your financing plan and think in terms of the total of the property price plus closing costs. Understanding the breakdown of closing costs is the foundation for building a clear financing plan.