Offering 10% below asking on a small multifamily in Tokyo — sensible or too aggressive?

A

alex_page

Seller
Seventy-seven days on the market is what makes me consider an opening offer 10% below the ¥102,500,000 asking price, but I am not treating that alone as evidence that the seller is ready to concede. This is a small Tokyo multifamily that requires updating, and the nearby listings do not tell me where comparable properties have actually sold.

I can provide financing proof and be flexible about completion. My concern is protecting against costly unknowns rather than using every cosmetic defect to justify the discount. Would it be better to explain the offer through the limited completed comparables and known updating, while leaving inspection findings to a repair credit discussion?

I am reluctant to give up inspection, financing or appraisal protection merely to make the lower price look cleaner. Are there any deposit terms you would also regard as essential?
 
A 10% opening discount is defensible if the offer explains the uncertainty rather than criticising the property. Keep it short: limited completed comparables, updating required, and your ability to show financing proof and accommodate the seller’s preferred completion date.

I would retain inspection and financing protection. Also use a clear but reasonable response deadline, so the offer does not remain open while the seller shops it around.
 
What do you know about the seller’s motivation and the scope of the updating? Seventy-seven days alone does not show urgency; the seller may simply be holding out for a number close to asking.

For a multifamily, I would also want clarity on the existing tenancies and income information before treating nearby asking prices as meaningful comparables. Two similar-looking buildings can justify different prices once their condition and occupancy are considered.
 
I disagree slightly with leading on “10% below.” That is a round negotiating number, not a valuation. Work backwards from the price you can support, then present that figure even if the resulting discount is 8.7% or 10.4%. A specific number tied to condition and uncertain completed comparables can look more considered.

The cleanest terms may matter more than a flattering explanation, but clean should not mean accepting unlimited appraisal-gap or deposit exposure.
 
On repairs, I would avoid asking for a general credit at the outset. Offer based on the visible updating, inspect for major items, and reserve the right to revisit the price only if the inspection identifies something costly that was not already apparent. That separates genuine surprises from cosmetic work already reflected in your offer.

Before signing, have the local agent or appropriate adviser spell out when the deposit becomes exposed and exactly what happens if financing or appraisal falls short.
 
The distinction between visible updating and expensive unknowns is useful. I’ll avoid presenting this as an arbitrary 10% haircut and instead attach the price to the weak completed-comparable evidence, while providing financing proof and flexibility on completion.

My remaining concern is the appraisal gap. I do not want a low appraisal to leave me choosing between adding an undefined amount of cash and losing the deposit. I’ll ask for that outcome to be addressed explicitly rather than assuming the financing wording covers it.
 
That is the right point to make explicit. Financing approval and valuation may not protect you in identical circumstances, and the effect of the wording can depend on the Tokyo transaction documents. Set a maximum cash contribution you could tolerate if the appraisal is low, then make sure the written terms do not expose you beyond it.

I would also decide your walk-away price before submitting. If the seller counters near ¥102,500,000 without supplying better completed comparables or addressing condition, flexible completion should not become a reason to abandon your valuation.
 
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