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A Request from the UK

As an extra feature, we have a short story of an overseas transaction, “A Tale of a Landlord and a Real Estate Appraiser.” This story will give you a picture of what a real estate appraiser does. It covers the process of property valuation, the factors an appraiser considers, and how their work influences the transaction. This article takes about 10 minutes to read.

-Table of Contents-
1. Prologue
2.A Request from the UK
3.Overseas Communications
4.Field Survey
5.A Real Estate Appraiser and A Real Estate Agent
6.Testimonials and Debate
7.Epilogue

1.Prologue

As a real estate appraiser, Kuroda’s first task of the day is to check his e-mail. The first thing he does is to get rid of any junk mail. In the past, he tried to strengthen the junk mail security system, but necessary e-mails also got tagged as spam. So he had no choice. He had to reduce security and, therefore, had to deal with a lot of junk mail as part of his morning routine.

There were several e-mails in English. One was an ad for sunglasses. “I wonder how they got my e-mail address.” Kuroda wondered, deleting the advertising e-mail in English. Nowadays, he gets several requests and inquiries from foreigners. Kuroda has been improving his English daily to keep up with all the foreign mail. Recently, the accuracy of automatic translation tools has been improving, but to avoid miscommunication during business transactions, there’s no better way than to improve one’s own English skills.

The following e-mail was also in English. The subject line read “Request for Appraisal Report,” and the mail started with the words “To Kuroda Appraisal Office.” This doesn’t sound like automated spam. An e-mail that begins with something other than an e-mail address and has an actual name addressing the receiver usually isn’t junk mail. Kuroda skimmed through the e-mail. It was sent by an English lawyer, requesting an appraisal of a guesthouse in Hida Takayama, Japan. It was a proper business request. “I better translate this letter and share its content with the whole office,” Kuroda thought. He put that e-mail aside, then dealt with the junk mail and replied to all other e-mails as needed.

Kuroda used an Internet translation tool to ensure that he didn’t misunderstand the content of the e-mail sent by a lawyer from the UK. Automatic translation tools aren’t perfect. He had to take some fuzzy parts and re-translate them phrase by phrase to shape them into more natural Japanese sentences. He can translate independently, but he usually uses automatic translation tools to save time. Responding to foreign e-mails has become easier because he doesn’t have to translate things manually, thanks to automatic translation tools.

2.A Request from the UK

The e-mail was sent by a lawyer in the UK. There are two types of lawyers in the UK: barristers and solicitors. In Japan, the former is called a “Houtei” lawyer, and the latter is a “Jimu” lawyer. The difference between them is that a barrister argues in court, while a solicitor deals directly with clients. This e-mail was sent by a solicitor; the client’s name was Mary Evans.

The following is a summary of the e-mail.

Mary and Gordon Evans’ divorce is to be litigated in the UK Family Court. In the UK, there is no such thing as a divorce by consent, as in Japan, where a divorce can be obtained simply by filing a petition. In other words, there is no other way than a judicial divorce. During the Evans’ divorce proceedings, the division of property is being disputed.

The Evans ran a guesthouse for foreigners in Hida Takayama, Japan. Hida Takayama is a popular tourist destination for foreigners. Hot springs, ski resorts, and the world heritage site, Shirakawa-go, are all in the area. The Evans pooled their funds to purchase the land and building for the guesthouse. They managed it well and made a reasonable profit. However, they had some disagreements over management policies. Their marriage deteriorated, and Mary returned to the UK at the end of last year. Then, back in the UK, they filed for divorce.

The issue, in this case, is the settlement of a property. Property settlement is the process of dividing marital property during a divorce. In this case, the issue is how to divide the guest house, which Mary and Gordon had jointly purchased and managed. Mary has already returned to England, but Gordon is still running the guesthouse in Hida Takayama and wants to continue to run it in the future. Legally, the building is solely owned by Gordon, who paid for it. However, the land belonged to Mary and Gordon, each with a half interest, both putting down money for the land. Since Mary has rights to 50% of the land the building sits on, if Gordon wanted to continue operating the guesthouse, he would have to pay Mary for the 50% of the land she owns.

The lawyer’s decision to use the Kuroda Appraisal Office to determine the property’s value was a crucial step in the settlement process. The lawyer sought Kuroda’s services after discovering their English version of the website, a testament to Kuroda’s consistent efforts to improve his English skills.

Assuming that he would take the job, Kuroda immediately replied. Well, first, he had to write the e-mail in Japanese using simple sentences, auto-translate it to English, and then manually make it sound more natural. Kuroda could start writing it in English from scratch. But when he was writing long sentences, he wanted to make sure he got it right.

First, Kuroda needed to know what level of accuracy the client wanted. Were they sending the information and papers for the property? Did they want a rough appraisal using the information they provided? Or did they want Kuroda to go to the actual site to investigate and prepare a full, detailed report? Since it takes about 5 hours to get to Hida Takayama from Tokyo, he’d have to stay somewhere for the night if they expected him to go to the actual site. So he estimated the cost for both cases, one for a rough appraisal without the trip and one that included bills for the trip. Kuroda asked them for further details about this job.

“The traveling expenses between Tokyo and Hida Takayama aren’t cheap. They would be saving money if they contacted a real estate appraiser nearer to their guest house, such as Nagoya or Gifu,” Kuroda thought. But they chose Kuroda’s office in Tokyo. He felt that the Evans must have their own reasons for choosing his office out of all others.

3.Overseas Communications

The lawyer’s response, which arrived promptly the next day, was a significant development. It not only shed more light on the situation but also provided detailed information about the property in question.

The guesthouse, built eight years ago, has six guest rooms and is three stories high. It was built for guests who could spend a little extra to enjoy the relaxing environment. Some rooms even have fully equipped kitchens for long-term stays. The income and expenses chart attached to the e-mail indicated a healthy revenue stream, thanks to its prime location. It’s no wonder that Gordon is considering continuing to run the guesthouse.

However, that is not the heart of the problem. Gordon states that he has already obtained an appraisal of the land and building from the local real estate company that initially sold the property to the Evans. That real estate company is based in Nagoya, is owned by a foreigner, and is a real estate agent for foreigners in the tourist areas of Aichi and Gifu prefectures. The Evans bought the land from that real estate company, built the guesthouse, and started their business in Hida Takayama. Mary’s lawyer contacting Kuroda’s office in Tokyo might have something to do with that. Maybe she wanted a company unrelated to any Nagoya real estate companies.

The real estate company’s appraisal for Gordon was 69 million yen: 41 million yen for the land and 28 million yen for the building. Mary’s lawyer asked Kuroda to make a rough appraisal using the information attached to the e-mail. If the rough appraisal amount is 20% or higher than the amount given by Gordon’s side, the lawyer wanted Kuroda to go to the actual site to investigate and make a full, detailed report.

20% more of 41 million yen would be 49.2 million yen. Suppose she could provide the information that the land value is higher than Gordon’s original appraisal. In that case, she could be getting about 4 million more than Gordon had stated. If that’s the case, even if the investigation price might cost her a bit, the detailed report made by a third real estate appraiser might help her in court.

The e-mail also instructed Kuroda to make the appraisal using the guest house’s income value information. Of course, why not? It is a profitable property, and that fact should also be considered a property value.

Kuroda replied that he would send the rough appraisal by the end of the week.

Two days later, Kuroda sent the rough appraisal to the lawyer in England. The rough appraisal amount for the land was well over 50 million yen: 54 million yen for the land and 31 million yen for the building. The total value of the property was 85 million yen. The guest house was nicely located in the suburbs of Takayama City, and it would generate steady income for Gordon in the future. The Hida region, which includes Hida Takayama, is now part of Gifu Prefecture but was once an independent administrative division of Hida Province. Takayama City is the region’s center and has the well-preserved streets of an Edo-era castle town. Therefore, it has been given three stars in the Michelin Guide as a must-see tourist destination for its historic scenery.

After examining the provided data, Kuroda felt that the local real estate company underestimated the property’s value. 69 million yen for both land and the guest house sounded a bit like “low-balling” to him, so he also noted that in the e-mail.

The next day, Kuroda received a reply from the UK. They were satisfied with the results of the rough appraisal. And had requested Kuroda to go to the site to investigate and make a detailed report of the property. They also told him that Gordon, who happens to be in Hida Takayama and could speak some Japanese, could show Kuroda around the property. Because of the trial schedule, Mary’s side also asked Kuroda to speed up the process if he could. They stated that Gordon already has a new romantic Japanese partner and wanted Kuroda to avoid her as much as possible during the investigation. Mary’s lawyer was worried about Kuroda having a biased image of Mary based on whatever Gordon’s new partner might say. They also told Kuroda that the real estate company based in Nagoya was low-balling the value because they were on Gordon’s side.

This would be Kuroda’s first visit to Hida Takayama, and for a moment he had thought of visiting some tourist spots. But then he realized that after creating his report, he’d have to translate the whole thing into English before sending it to the UK and had second thoughts about it. He wouldn’t have any time for tourism on this trip. After that realization, he immediately contacted Gordon in Takayama. Because he had other schedules to process, Kuroda originally wanted to include Saturday and Sunday for this trip, but was asked to avoid weekends since the guest house would be packed to its capacity. So he had no choice but to visit Hida Takayama during the week.

4.Field Survey

The traveling time from Tokyo to Takayama City, Hida, was going to be long. It takes about 1 hour and 40 minutes from Tokyo to Nagoya on a bullet train, then 2 hours and 30 minutes from Nagoya to Toyama on the Hida Limited Express. When Kuroda arrived at Takayama station shortly after 11:00 am, he was met by Sayama, who works part-time at Gordon’s guesthouse. Mary’s lawyer had told him beforehand that Sayama would be picking him up at the train station.

“Is that you, Kuroda-sensei? I’ve been expecting you. The taxi pool is right this way.”

“Wait, could I eat something before we go?” Kuroda replied.

Sayama took Kuroda to a famous ramen restaurant. And while Kuroda ate the ramen noodles, he asked several questions.

“I heard your guesthouse isn’t far from the nearest bus stop. Am I correct?”

“Yeah, it’s very near. About 10 minutes or so.” Sayama replied.

“Instead of taking the cab, can we go by bus? I want to see what Takayama City is like.”

“Okay, sure.”

After finishing his lunch, Kuroda was directed to the bus stop. They shouldn’t have bothered sending someone to pick him up if he were to take a cab. But a local tour guide could come in handy when riding a bus. Plus, Kuroda was staying at a business hotel in Takayama City. So, if he took the bus on the way out, he’d have an easier time finding his way back into the city.

Sayama is a university student in Gifu Prefecture. He works part-time for Gordon’s guesthouse because he likes Hida Takayama and wants to learn English. He tells Kuroda that Gordon is a good-natured person. Since Gordon sent Sayama to pick Kuroda up at the station, Sayama’s impression of Gordon seems to be true. Someone who could be nice to the opposing party’s member during a divorce case can’t be that bad.

As Kuroda looked outside, he saw many buildings that retained the atmosphere of the Edo period. “You know what? At the end of that alley, there is a famous pudding shop,” Sayama told Kuroda as the bus passed through the city.

When Kuroda reached Gordon’s guesthouse, it was already 1:00 pm. Gordon greeted him, and the tour of the guesthouse began. The building was well-maintained and was being kept in excellent condition. Kuroda and Gordon’s conversation was a mixture of English and Japanese, but they understood each other well. After the building tour, Kuroda wanted to see the environment surrounding the property. So, Gordon again started to guide Kuroda. There were several inns and guesthouses. Gordon told him that the international tourist population in Hida Takayama has recently increased, and the guesthouse’s business has been doing well. “After all, Hida Takayama is a Michelin three-star tourist destination,” Kuroda said. Gordon replied in Japanese, “That’s right. Foreigners understand the value of Hida Takayama better than Japanese.” A saying crossed Kuroda’s mind, “It’s hard to see what is right under your nose.”

There was a vacant lot, and when Kuroda asked about it, Gordon told him that a foreigner was planning to build a vacation home there. The “For Sale” sign was carelessly tossed in the back of the vacant lot, indicating that it had been sold. Kuroda thought it was an interesting piece of information, and using his smartphone, snapped a picture of that discarded sign. When he later asked Gordon about the real estate company that sold that particular vacant lot, he was informed that it was the same company that sold the land Evans now owned. And “that company” is the one who submitted Gordon’s version of the appraisal to the family court in England. Even after Gordon left, Kuroda walked around the area until it became dark and talked to people nearby. When Kuroda returned to Gordon’s guesthouse at dusk, he found a woman cooking in the kitchen. She looked around thirty-ish and had long black hair. Gordon invited Kuroda to join the table. But since Kuroda has been forewarned by Mary’s lawyer, he politely declined the offer, thanked Gordon for his hospitality, and left the building.

After spending the night in a business hotel in Takayama, Kuroda took some time in the morning to stroll around the city. Gordon was right. There were lots of foreign tourists in the area. As a souvenir for his office staff, he bought the famous pudding Sayama suggested and returned to Tokyo. On the train, Kuroda continued working on the evaluation report. Time cannot be wasted.

5.A Real Estate Appraiser and A Real Estate Agent

The day after Kuroda returned to Tokyo, he completed his full, detailed report and began the translation process. The translation of an appraisal is relatively easy because of the existence of formats that are already made for overseas use. However, it takes more time and effort than making a Japanese appraisal. And yes, he does have to charge extra for the job.

The appraised value was slightly higher than the rough version: 56.75 million yen for the land and 33.25 million yen for the building, a total of 90 million yen. It was clear that the on-site investigation was worthwhile. As expected, the market value of Hida Takayama as a tourist destination and vacation home was high.

Kuroda immediately sent the completed appraisal report to the lawyer in England.

The reply came the next day. They were satisfied with the report, but now, after all this time, they were wondering about something else.

‘What are the differences between an appraisal made by a licensed real estate appraiser and a real estate agent?’

In other words, what is the difference between a licensed real estate appraiser and a real estate agent? “After all this time?” Kuroda was surprised that they had no knowledge of these differences. It was common knowledge in Japan that the appraisal report made by a real estate appraiser is more reliable than the appraisal report of a real estate agent. However, this is only based on the soil of Japan. In the UK, the “surveyor” profession conducts various real estate surveys. In Japan, however, the term “surveyor” includes real estate appraisers, architects, and real estate agents. So, it is understandable why a UK lawyer would ask such a question. Kuroda started to reply.

Simply put, a real estate agent is an individual or company licensed as a broker. Their offices must have a licensed real estate agent who has passed an examination. To open a business, they must obtain a license from the prefectural governor or the Minister of Land, Infrastructure, Transport, and Tourism. Real estate agents are engaged in selling and purchasing land and buildings, as well as providing brokerage and agency services. They also deal with brokerage and agency services for real estate leasing and management. Real estate agents can also evaluate the price of land and buildings based on their information, but this is not their specialty. Naturally, an evaluation price given by a real estate agent can differ case by case. Are they buying? How is their relationship with clients? The price would shift depending on the situation. For them, making an appraisal is simply for business dealings. The same applies to cases where they act as an intermediary.

In contrast, real estate appraisers are qualified individuals who have passed a complex examination and are specialized in making real estate valuations. They make appraisals based on neutral and objective observations. There are strict laws and regulations for real estate appraisers when making an appraisal. And if they violate any laws or regulations, real estate appraisers are subject to severe penalties. These factors ensure the reliability of real estate appraisals made by real estate appraisers. Therefore, when real estate prices are an issue in Japanese court cases, they always use an appraisal made by a real estate appraiser.

Kuroda received an immediate response from the UK. In the e-mail, they asked, ‘You are saying that real estate agents and real estate appraisers both must take an examination and pass the test. Which examination is more challenging?’

Kuroda replied that the passing rate for a licensed real estate agent is approximately 17%. In comparison, the passing rate for a licensed real estate appraiser is only 5%. The real estate appraiser exam is the third most challenging exam to pass in Japan. The two top challenging exams are the lawyer qualification and public accountant exams. He also wrote that the average number of years it takes for a person to pass the exam also differs.

6.Testimonials and Debate

Thank you for your assistance in Mary’s court case.

Best regards,’

Kuroda received a reply from the UK. The appraisal report should fulfill the client’s request. Case closed, Kuroda thought, and when he was about to send the invoice, he received an unexpected e-mail.

To his surprise, he received a request to testify online about real estate appraisals during the family court trial in the UK.

Kuroda previously had experience giving similar testimonies in a Japanese court. And “only” in Japanese courts. It is nerve-wracking to answer questions from an opposing lawyer and the judge. The same would be true in the courts of the UK. Yes, Kuroda had some confidence in his English conversation skills. But he wasn’t sure he’d make it through a trial solely using English. Most importantly, thanks to the time-zone differences, the trial would be held during his sleeping hours, in the middle of the night.

He checked his calendar. On the day of the trial, Kuroda was scheduled to meet some other clients in person, and the case was about a crucial inheritance. He had made plans to sell real estate properties at the clients’ request. And during the meeting, Kuroda had to explain all the details to the co-heirs. He wouldn’t be awake enough to explain anything if he attended the trial during the night. Kuroda replied that he had an important meeting scheduled the next day and could not testify on the day of the trial.

In whatever country the trial is held in, the best way to enhance the credibility of an appraisal is for the appraiser himself to testify in court and answer questions from both parties and the court. Nevertheless, the differences between real estate agents and real estate appraisers in Japan should be researchable in the UK. It is a lawyer’s job to gather trial materials and convince the judge. Kuroda secretly thought.

That evening, Kuroda met with a lawyer he knew to discuss another case. The discussion ended early, so they had time to exchange information on other matters. During the conversation, without giving names and details, Kuroda told the lawyer that he had been asked to testify about real estate appraisal in a family court in the UK. He also told the lawyer that he had declined the request.

Kuroda explained, “A real estate agent in Nagoya made an appraisal for the property. The client wants me to testify about the difference between the opposing party’s and my version of appraisal.”

“Is that so? I don’t know much about the British court system and the real estate transactions, but they seem to have different court procedures.”

“Yeah, I guess that’s why they’ve asked me to testify.”

“By the way, about six months ago, I heard that a real estate agent in Nagoya got caught for tax evasion.” The lawyer suddenly remembered about the incident and informed Kuroda.

In that instant, Kuroda also remembered something crucial. When Kuroda did his investigation at Takayama City, there was a vacant lot. Nearby laid the “For Sale” sign. And the discarded “For Sale” sign had a real estate agent’s name on it. When he took a picture of that “For Sale” sign, he didn’t realize what had actually interested him in the first place. But now, he knew why. He had seen that agent’s name before in the newspaper or on the Internet. Kuroda quickly searched through the picture files on his smartphone. Then, he turned his smartphone screen toward the lawyer.

“Oh yeah, that’s the one.” The lawyer also searched for something on his phone, opened a news media page, and showed it to Kuroda. It was news that the National Tax Bureau of Aichi and the Aichi District Public Prosecutor’s Office had filed a complaint against the company suspected of tax evasion. Yes, Kuroda had seen this web page before.

A few days later, Kuroda received another e-mail from the lawyer in the UK.

To his surprise, the lawyer asked Kuroda to have a debate with the real estate agent in Nagoya - the one who made the appraisal for Gordon. The lawyer stated that this time, Kuroda could schedule the date and time of the debate. And this was a court order.

The lawyer says that the real estate agent has been handling a lot of properties for foreigners. Therefore, they probably have foreign employees whose native language is English. Even if a Japanese person could speak fluently in English, they might have difficulty discussing against a native English speaker, so maybe the opposing side was trying to win some points over the debate. The lawyer asked if Kuroda could explain the authority a real estate appraiser has in Japan.

Kuroda took a moment to think the proposal over. The other party is probably aware of the validity of Kuroda’s appraisal. They might think that even if Kuroda could speak some English, he would be an ordinary Japanese man. If it came to debate, native speakers would have huge advantages against Kuroda. The other party may have asked the court for a debate based on such an assumption. The lawyer may be right. But the truth of setting a debate might have some deeper meaning. If the trial continued without such a debate, the court would have to study Japanese materials to learn about the Japanese real estate systems in detail. Maybe they want to avoid such effort and save themselves the trouble of accurately translating the Japanese text into English. Even the lawyer on Mary’s side might be thinking the same thing.

If the other party underestimated Kuroda’s English and asked for a debate, he wanted to take up the challenge. But protecting his self-confidence should not be a primary goal in business dealings. Kuroda rethought. Wanting to prove that he could speak English shouldn’t be the motive to challenge a native speaker in a debate. Be careful of what you wish for, Kuroda thought and declined to attend a debate. Taking the bait wouldn’t be a smart move.

But the lawyer works for Mary and is contacting Kuroda on her behalf. And Mary is Kuroda’s client. He shouldn’t just say “no” to everything. So, instead of simply telling them “NO,” he sent an English translation of the headline and summary of the article about the scandal of the real estate agent in Nagoya. And, of course, he also sent the URL of the article. The chance of winning a trial using an appraisal made by a tax-evading agent sounds very promising. The only way to counter Mary’s appraisal by Kuroda would be to prepare a new one. However, creating a trustworthy appraisal stating prices that are very low compared to Mary’s would be unrealistic. If that were the case, Kuroda thought the other party might not be willing to spend more on a losing battle. After seeing the article, if the opposing party or the court asked Kuroda again to participate in the debate, he’d be ready for it then.

The next day, Kuroda received a reply e-mail saying that it was regrettable that he could not participate in the debate but appreciated the valuable information.

7.Epilogue

A short time later, Kuroda received an e-mail from the lawyer saying that the Evans’s divorce had been granted without further incident. The court had performed actual research on the Japanese real estate system. Mary’s claim, the appraisal by Kuroda, had been accepted as the proper property value. In addition, according to the lawyer, the information about the tax evasion incident had deeply damaged the credibility of the opposing party’s appraisal. The opposing party simply gave up and never made a new appraisal. I knew it, Kuroda thought and was relieved that he had done his due diligence.

About two months had passed, and the Kuroda Appraisal Office received an airmail with a thank-you note from Mary, his prior client.

The divorce was officially finalized, and Mary received her share of the property. She was now living with her new partner, and it was all thanks to Kuroda’s work. Mary thought that this gratitude could not be conveyed by e-mail, so she wrote a thank you note by hand and sent the letter by airmail. The divorce was finalized, she received a fair share of the property, and she had a new partner. Kuroda could really feel her happiness through the letter.

“Mary got married, too? Umm... Partner? Kuroda re-read the letter. “Civil partnership?” He wondered why she used that expression. And when he found a photo enclosed in the envelope, he knew why. Two women were smiling happily in the photograph. Kuroda didn’t have a chance to meet Mary in person. But Kuroda had seen a picture of Gordon and Mary during the appraisal-making process. It was a part of the property documents. So the one with the long black hair was probably Mary, and the one with the short blonde hair was Mary’s new partner.

“Do you remember the divorce trial case in the UK? I just received a thank-you note from that client,” Kuroda said as he handed the content, along with the translated memo, to a nearby female employee. “Oh, I remember that! You bought us the pudding.” As she read the translated memo and looked at the picture, she cried out, “Oh, what a surprise!” The other employees gathered around and took a peek at the content.

Since Kuroda knew that Gordon already had a new Japanese romantic partner, he assumed that Gordon’s new girlfriend was the reason for the divorce. Thinking back now, Gordon did not seem to be a bad person. Kuroda was working for the opposing side, yet Gordon had welcomed Kuroda’s visit with warm hospitality. In fact, he seemed like a good person. Did Mary’s preference for women play the main part as the reason for the divorce? Kuroda wondered. But she was married to Gordon, and he was a male. Did Mary realize her preference after she married Gordon? Kuroda had no idea which one stepped out of the marriage first. But he was pleased that both parties found happiness. As a real estate appraiser, Kuroda was aware of and understood the diversity of properties. He still had lots of learning to do regarding human diversity. The world is filled with diversity, Kuroda thought.

The end.