The person helping you buy may be paid by the seller as well
In Japan one firm may act for both sides of a property sale and take a commission from each. It is entirely lawful, it is common, and most foreign buyers arrive from countries where it is restricted or forbidden. Nobody explains it, because the people who could are the people it pays.
In short
- A Japanese broker may hold both sides of a transaction and receive the full commission from each. Doing so doubles their fee on the same sale.
- The incentive that creates has a name: withholding a listing from other brokers until the firm can find its own buyer.
- A reform in January 2025 made false listing status a disciplinary matter. It gives the seller a way to check. It gives the buyer nothing.
Why it is lawful here
Japanese law prohibits one person from acting as agent for both parties to a contract. Property brokerage is arranged so that this prohibition does not bite: the broker is not an agent of either party but an intermediary between them, engaged to bring about a transaction.
On that footing, one firm may hold the seller's instruction and the buyer's instruction at the same time, and may receive the full permitted commission from each of them.
The arithmetic is simple and it is the whole of the point. Two firms, one on each side, each receive one commission. One firm on both sides receives two. Same property, same price, same work.
What it changes, and what it does not
This is not an accusation. A great many Japanese brokers handle both sides honestly and competently, and the practice is legal, disclosed on request and widely accepted here.
It is a structural observation, and the structure is what matters when you are the party who cannot read the documents.
| Moment | Where the interests sit |
|---|---|
| Negotiating the price | You want it lower. The seller wants it higher. One firm is being paid by both |
| Something adverse emerges about the property | You want to know. The sale does not benefit from your knowing |
| Another buyer appears | A competing buyer with a different firm generates half the fee |
| Deciding whether to proceed | Every party in the room is paid only if the answer is yes |
Every document you are handed was produced by somebody who is paid when you say yes, and by somebody else who is paid when the seller says yes. Sometimes they are the same person.
The second problem, which follows from the first
If holding both sides doubles the fee, there is an incentive to keep a listing to yourself until you find your own buyer. The Japanese term for this translates roughly as enclosing, and it works through the industry's shared listing system.
Brokers register properties on a system that only brokers can see. Registration is compulsory for two of the three types of seller instruction. Each listing carries a status, and there are three of them:
- Open for enquiries
- A written offer has been received
- Temporarily suspended at the seller's request
The first tells other brokers to bring buyers. Setting one of the other two, when it is not true, closes the door. Other brokers stop enquiring, and the firm has the property to itself for as long as the false status stands.
The seller is the direct victim: their property is being shown to a fraction of the market while they wait. But a buyer is affected too, and differently. Properties that would suit you are not shown to you, because your broker was told they were unavailable.
What changed in January 2025
The ministry amended the brokerage regulations in June 2024, with effect from 1 January 2025.
Where a broker has registered a property under one of the exclusive instruction types and the registered status does not match reality, that is now grounds for a formal instruction order under the brokerage legislation. An instruction order is the lightest of the supervisory measures, and failure to comply can escalate to suspension of business, and in serious or repeated cases to revocation of the licence.
Alongside it, the listing system was given a status management function, and brokers are expected to explain to the seller that they can use it. A seller can now log in and see whether their own property is showing as open.
This is a genuine improvement and it deserves to be recognised as one.
And here is what it does not do
Read the reform again and notice who it equips.
The seller can check. The seller is given a login, a screen and an explanation. The seller has a route to discovering that their property has been quietly closed to the market.
The buyer has none of this. The listing system is closed to the public. You cannot log in, you cannot see a status, and you have no way of knowing whether a property you were told was under offer was actually under offer.
For a foreign buyer the position is narrower still. You cannot search the system, you cannot read it if you could, and you are dependent on being told what exists. The 2025 reform protects the Japanese seller. It leaves the overseas buyer exactly where they were.
The three types of instruction
Worth knowing now, because you will be the seller one day. Selling from abroad is its own exercise, and this is the decision that starts it.
| Type | Other firms | Listing registration | Reporting to you |
|---|---|---|---|
| Exclusive, sole rights | Not permitted. You may not find your own buyer either | Compulsory, within five business days | At least weekly |
| Exclusive | Not permitted. You may find your own buyer | Compulsory, within seven business days | At least fortnightly |
| Non-exclusive | Permitted. You may instruct several firms | Not compulsory | Not prescribed |
The exclusive forms run for up to three months at a time. They concentrate the incentive described above in a single firm, which is precisely why the registration and reporting duties attach to them and not to the third.
What a buyer can actually do
Not much about the structure. Quite a lot about your own position within it.
- Ask directly whether the firm also acts for the seller. It is a fair question, it is normal here, and the answer is informative either way. A firm that will not answer plainly has answered.
- Ask how the commission is being taken, and from whom. On property at or below eight million yen, ask specifically about the fee before signing anything, because a separate rule allows a flat charge to each side.
- Do not rely on one firm to show you the market. Speaking to more than one is ordinary practice.
- Establish the facts about the property independently. Zoning, frontage, hazard designations and terrain are all on the public record and none of them depends on anybody's incentive. This is the part you can fully control.
- Get the pre-contract document early. The explanation of important matters is prepared by a licensed specialist who is personally accountable for it, which makes it the most reliable document you will be handed.
Point four is the reason this site exists in the form it does. Facts from a public register have no interest in whether you buy.
Why we are built this way
I hold a Japanese real estate licence. En Beau lo does not directly broker or act as an agent in property sales.
That is not modesty about our capabilities. It is the single structural decision this company is built on, and this article is the clearest explanation of it. En Beau lo does not receive compensation that is contingent on a property sale closing. Where we provide introductions to specialists or related support, any fee is quoted separately based on the scope of work and is not contingent on the transaction closing. If the research says walk away, nothing about our position changes.
When a transaction is needed, we can introduce a licensed firm, and you deal with them for that part. We stay on the research, the documents and the property itself. The longer version of that reasoning is here.
In the interest of the same transparency: I am also representative director of Matsuyama Co., Ltd., a licensed brokerage in the same group. En Beau lo receives no referral fee from any brokerage, Matsuyama included, and where a transaction needs a broker, you are free to use any licensed firm you choose. If you do choose Matsuyama, it is paid as any broker is, under the rules described above, and we will tell you at the outset whether it is also acting for the seller.
What this article is not saying
Acting for both parties is lawful in Japan and is not evidence of misconduct. Most transactions handled this way proceed properly. Nothing here describes the conduct of any particular firm or individual.
Registration duties, status categories and supervisory measures are set by brokerage legislation and ministry guidance and are amended over time. This is general information, not advice on any transaction. En Beau lo is not a licensed real estate broker and does not act as an agent or intermediary.
Knowing it is most of the benefit
You cannot change how Japanese brokerage is structured, and you do not need to. What changes the outcome is understanding the position of every person at the table before you are sitting at it.
A buyer who knows that one firm may be holding both sides asks different questions. A buyer who has already established the facts about the property from public records is not dependent on being told. The structure stops mattering to you at exactly the point where you stop relying on it for information.
Facts that do not depend on anyone's incentive
Enter an address and see zoning and what it permits, hazard designations at the exact coordinate, terrain, land values and station access, each with its source and its reference year. Nothing in it changes according to whether you buy. Your first property is free.
Research a propertySources and notes
Brokerage as an intermediary function, the permitted remuneration from each party, the three types of mediation agreement and their registration and reporting duties arise under the Real Estate Brokerage Act and the ministry notification governing remuneration. Amendments to the enforcement regulations made in June 2024 and applied from 1 January 2025 provide that where the registered transaction status of a property listed under an exclusive mediation agreement differs from the facts, the broker is subject to an instruction order under article 65, paragraph 1 of the Act, with escalation to suspension of business where an order is not complied with. The status management function and the associated explanation to sellers form part of the same measures. The separate remuneration ceiling for low-priced property took effect on 1 July 2024.