6-1 Find Out About Real Estate Agency.
When purchasing real estate, it is important to choose a reliable real estate company. It is especially important to work closely with a real estate company if you are looking for a brokered property. Start by first gathering some basic information about the real estate company.
Point 1: Learn about the characteristics of real estate companies.
Real estate companies have a variety of characteristics.
For example, a company with many branches may have an advantage in providing information using its own network or in dealing in remote areas. A company that has been in business for a long time in a particular area may also be well versed in a variety of local information, not limited to real estate. These characteristics of a real estate company cannot be formally determined by the size of the company. It is important to determine these characteristics by referring to the reputation of the neighborhood and ultimately through communication with the real estate agent's staff.
For example, a company with many branches may have an advantage in providing information using its own network or in dealing in remote areas. A company that has been in business for a long time in a particular area may also be well versed in a variety of local information, not limited to real estate. These characteristics of a real estate company cannot be formally determined by the size of the company. It is important to determine these characteristics by referring to the reputation of the neighborhood and ultimately through communication with the real estate agent's staff.
Point 2: Check basic information about the real estate company.
Information on real estate companies can be obtained on the Internet and through other sources. When information is not available on the Internet, it may still be possible to obtain certain information from government agencies. It is a good idea to check basic information about the real estate company, as needed.
You can also look up the real estate company you want to know about on Real Estate Japan, or search for a real estate company by area or train line.
You can also look up the real estate company you want to know about on Real Estate Japan, or search for a real estate company by area or train line.
The following is some commonly available information on real estate agencies.
Real Estate Business Transaction License Number
In order to buy, sell, or broker real estate, a real estate transaction business license is required. Companies with offices (head office, branch, etc.) in multiple prefectures are licensed by the Minister of Land, Infrastructure, Transport and Tourism, and companies with offices (head office, branch, etc.) in only one prefecture operate under a prefectural governor's license. The license number is always listed in real estate advertisements, so be sure to check it.
In order to buy, sell, or broker real estate, a real estate transaction business license is required. Companies with offices (head office, branch, etc.) in multiple prefectures are licensed by the Minister of Land, Infrastructure, Transport and Tourism, and companies with offices (head office, branch, etc.) in only one prefecture operate under a prefectural governor's license. The license number is always listed in real estate advertisements, so be sure to check it.
From the license number, you can confirm the licensor of the real estate agency (Minister of Land, Infrastructure, Transport and Tourism or prefectural governor) and the number of times the license has been renewed. Since licenses are renewed every five years, a company with a high number of renewals can be deemed to have a long history in the business and a certain level of experience, but there are also companies with a high level of know-how even if the number of renewals is low. The number of times the license is renewed should be checked as reference information when selecting a real estate company.
Real Estate Agency Directory
You can check the Real Estate Agents Directory at the administrative offices listed below. This roster includes the date of license, names of officers, locations of all offices (head office, branch offices, etc.), past administrative penalties, and the status of other concurrent businesses. This directory provides an overview of the real estate company. Some administrative agencies provide an overview of real estate agencies and information on administrative penalties on the Internet. However, you cannot judge a real estate company based on this information alone, so use it only as reference information when selecting a real estate company.
You can check the Real Estate Agents Directory at the administrative offices listed below. This roster includes the date of license, names of officers, locations of all offices (head office, branch offices, etc.), past administrative penalties, and the status of other concurrent businesses. This directory provides an overview of the real estate company. Some administrative agencies provide an overview of real estate agencies and information on administrative penalties on the Internet. However, you cannot judge a real estate company based on this information alone, so use it only as reference information when selecting a real estate company.
Where to browse the Real Estate Agency Directory
Documents available for browsing
- Real Estate Agency Registry
- License Application Form
- Documents to be attached to the application for the license
- Documents related to notification of changes in the registered matters on the Real Estate Agency Registry
Memberships in Trade Associations
There are four trade associations in the real estate distribution industry. Each organization provides training, guidance, and business support to its member companies, as well as consultation on consumer complaints. It is advisable to check the membership status of real estate companies in the associations for reference. If a real estate company is a member of an industry organization, the membership is listed near the name of the real estate company in the real estate advertisement.
There are four trade associations in the real estate distribution industry. Each organization provides training, guidance, and business support to its member companies, as well as consultation on consumer complaints. It is advisable to check the membership status of real estate companies in the associations for reference. If a real estate company is a member of an industry organization, the membership is listed near the name of the real estate company in the real estate advertisement.
Column: Prevention of Malicious Solicitation by the Real Estate Industry
As consumer protection is being strengthened, more and more people are seeking advice regarding malicious solicitation of condominiums. Therefore, the Ministry of Land, Infrastructure, Transport and Tourism has clearly stipulated prohibited acts in the Enforcement Regulations of the Real Estate Transaction Business Law. Specifically, the following acts are prohibited.
- Soliciting without first informing the other party of the real estate agent's trade name, the name of the person conducting the solicitation, and the purpose of the solicitation
- Continuing to solicit despite the fact that the other party has indicated an intention not to enter into a contract (including an intention not to continue receiving solicitations)
- Soliciting by telephone or door-to-door solicitation at a time that may cause annoyance.
6-2 Request a Real Estate Agency to Act as an Intermediary.
When purchasing a home, it is important to gather information on properties. In addition to gathering information on individual properties on your own using the Internet or information magazines, it is also effective to ask a real estate agent who has a lot of information on properties and the local area to help you find a property.
Point 1: Services provided by real estate companies in the brokerage business
When looking for a brokered property, have the real estate company that acts as an intermediary between the seller and the buyer, called a brokerage firm, look for the property. The real estate company provides information on properties that meet the conditions of the prospective buyer, and then supports the entire real estate transaction, including on-site visits, negotiations with the seller on terms and conditions, property explanations (explanation of important matters), contract procedures, and delivery procedures (on-site attendance, settlement of payment and expenses, etc.). Advice can also be sought on specialized areas such as law and taxes.
It is difficult for non-expert parties to directly negotiate a contract with the seller, but by having a real estate company, a professional in real estate transactions, act as an intermediary, negotiations can be expected to proceed smoothly. If there are any uncertainties, it is advisable to consult with a real estate company.
Brokerage fees are charged for such support services for the entire real estate transaction.
It is difficult for non-expert parties to directly negotiate a contract with the seller, but by having a real estate company, a professional in real estate transactions, act as an intermediary, negotiations can be expected to proceed smoothly. If there are any uncertainties, it is advisable to consult with a real estate company.
Brokerage fees are charged for such support services for the entire real estate transaction.
What a real estate company does for you
(1) Provide property information
Search and introduce properties close to what you desire from REINS-registered properties, its own information, other companies' information, etc.
Search and introduce properties close to what you desire from REINS-registered properties, its own information, other companies' information, etc.
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(2) Provide on-site tours
Provide on-site tours of selected properties
Provide on-site tours of selected properties
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(3) Negotiate terms and conditions with the seller
Coordinate and negotiate with the seller regarding the purchase price and other terms and conditions
Coordinate and negotiate with the seller regarding the purchase price and other terms and conditions
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(4) Explanation of important matters
Provide a legally obligated explanation of important matters regarding the property, contract details, etc. (This explanation will prevent potential problems in the future.)
Provide a legally obligated explanation of important matters regarding the property, contract details, etc. (This explanation will prevent potential problems in the future.)
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Assist with the mortgage loan process.
Assist in the preparation and conclusion of the purchase agreement.
Assist in the preparation and conclusion of the purchase agreement.
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(6) Delivery of property
Assist with verification and handover procedures by being present at the site.
Assist with verification and handover procedures by being present at the site.
Point 2: Check the differences in services offered by different real estate companies.
In choosing a real estate company to find a property for you, it is important to first understand the business of the real estate company and fully confirm the services you will receive.
Find out what services are available
Next, examine the specific differences in the services provided by individual real estate agencies in terms of how they are provided. For example, if you feel that a real estate agency is not very proactive in providing property information, or if you feel that the explanation of service contents is "vague" or "lax," ask for an explanation until you are satisfied. After that, you can decide for yourself whether or not the real estate company is trustworthy and make your choice.
The following checklist is an example of the things to check when choosing a real estate company. Make your final decision after thoroughly reviewing not only these items, but also any other concerns you may have.
Next, examine the specific differences in the services provided by individual real estate agencies in terms of how they are provided. For example, if you feel that a real estate agency is not very proactive in providing property information, or if you feel that the explanation of service contents is "vague" or "lax," ask for an explanation until you are satisfied. After that, you can decide for yourself whether or not the real estate company is trustworthy and make your choice.
The following checklist is an example of the things to check when choosing a real estate company. Make your final decision after thoroughly reviewing not only these items, but also any other concerns you may have.
Brokerage Services Checklist
*This checklist is a reference for reviewing brokerage services and selecting a real estate company. Ultimately, please use your own discretion in selecting the real estate you request.
Ask real estate companies to find a property for you.
Real estate companies can search for property information from the extensive information database of "REINS*" operated by the designated distribution system, including information that other real estate companies have received requests to sell. They can also provide information on properties for sale by their own clients and through cooperation with other real estate companies.
Just because a real estate company introduces you to a property does not mean that you must purchase it. It is also possible to stop the property search in the middle of the process or request other real estate companies to search for properties at the same time. First, gather a wide range of information from real estate companies.
*REINS: The name of the computer network system (Real Estate Information Network System) operated by the designated distribution system.
Real estate companies can search for property information from the extensive information database of "REINS*" operated by the designated distribution system, including information that other real estate companies have received requests to sell. They can also provide information on properties for sale by their own clients and through cooperation with other real estate companies.
Just because a real estate company introduces you to a property does not mean that you must purchase it. It is also possible to stop the property search in the middle of the process or request other real estate companies to search for properties at the same time. First, gather a wide range of information from real estate companies.
*REINS: The name of the computer network system (Real Estate Information Network System) operated by the designated distribution system.
Point 3: Tips for finding the right home
Communicating the exact conditions of your desired home to the real estate company is often the fastest way to purchase a desired home. When asking the real estate company to search for a housing, you should tell the real estate company the "area," "type of housing," "budget," and "move-in period.
For the "area," it will be easier for the real estate company to find a property if you narrow down your search to the train line and nearest station. The type of property" includes whether it is a single-family home or a used condominium. For "Budget," set an upper limit and tell whether it is a "housing budget" or a "total budget for purchasing a house.
Once you have communicated your desired conditions, ask the real estate company for advice on whether the conditions are reasonable, and narrow down your preferences to more specific conditions. If you are unable to find a property that meets your conditions, consider expanding the range of properties by changing the desired conditions that are lower in priority.
If your initial preferences are not clear, you may want to clarify them by looking at property information. In this case, organize the conditions of the properties you like and communicate them to the real estate company while clarifying your desired conditions.
For the "area," it will be easier for the real estate company to find a property if you narrow down your search to the train line and nearest station. The type of property" includes whether it is a single-family home or a used condominium. For "Budget," set an upper limit and tell whether it is a "housing budget" or a "total budget for purchasing a house.
Once you have communicated your desired conditions, ask the real estate company for advice on whether the conditions are reasonable, and narrow down your preferences to more specific conditions. If you are unable to find a property that meets your conditions, consider expanding the range of properties by changing the desired conditions that are lower in priority.
If your initial preferences are not clear, you may want to clarify them by looking at property information. In this case, organize the conditions of the properties you like and communicate them to the real estate company while clarifying your desired conditions.
6-3 Conclude a Mediation Contract with a Real Estate Company.
A mediation contract is concluded when formally requesting a real estate company to mediate a sale and purchase. A mediation contract is an important document to clarify the service contents of mediation that you hope for and its consideration, such as a commission. It is necessary to conclude a mediation contract after conveying one's intention to a real estate company firmly so that there will be no regret.
Point 1: Significance of a mediation contract
A mediation contract is a contract between a client and a real estate company concerning mediation of the sale and exchange of a housing site and a building. A mediation contract can prevent troubles related to agency work by clarifying the contents of the work (what kind of service is received) and a mediation fee, etc. that a prospective buyer requests of a real estate company in a contract. Therefore, the real estate company which received a mediation request is legally obligated (Article 34-2 of the Real Estate Brokerage Act) to prepare and deliver to the client a document describing certain matters to clarify the contractual relationship of a mediation contract.
The revised part of the Real Estate Brokerage Act of the Digital Improvement Act came into effect on May 18, 2022, and the document at the time of this mediation contract conclusion can be provided by electromagnetic means (electronic document delivery) in place of a paper document.
Since the conclusion of a mediation contract is an important step that serves as a gateway to subsequent mediation work, it is necessary to properly understand the contents.
The revised part of the Real Estate Brokerage Act of the Digital Improvement Act came into effect on May 18, 2022, and the document at the time of this mediation contract conclusion can be provided by electromagnetic means (electronic document delivery) in place of a paper document.
Since the conclusion of a mediation contract is an important step that serves as a gateway to subsequent mediation work, it is necessary to properly understand the contents.
Point 2: Types of mediation contracts
There are three kinds of mediation contracts: "exclusive-contract full-time mediation," "full-time mediation," and "general mediation." In exclusive-contract full-time mediation and full-time mediation, only one company can provide brokerage services, but in general mediation, two or more real estate companies can provide brokerage services. However, when requesting mediation of purchase, it is usual to conclude general mediation. (Exclusive-contract full-time mediation and full-time mediation contracts are not often concluded.) In addition, since there are an explicit type and a non-explicit type in a general mediation contract, based on the following explanation, choose the contract which suits you..
General mediation contract
This contract allows you to request multiple real estate companies to act as intermediaries at the same time. You can also sign a contract with the other party you have found yourself (such as when negotiating directly with a relative or acquaintance) without having to go through a real estate company. However, you will ultimately decide through which real estate company to proceed with the transaction. Generally, it is common to proceed with a deal with the real estate company that introduced the most promising housing.
This contract allows you to request multiple real estate companies to act as intermediaries at the same time. You can also sign a contract with the other party you have found yourself (such as when negotiating directly with a relative or acquaintance) without having to go through a real estate company. However, you will ultimately decide through which real estate company to proceed with the transaction. Generally, it is common to proceed with a deal with the real estate company that introduced the most promising housing.
Explicit and non-explicit types
There are "an explicit type" and "a non-explicit type" in a general mediation contract.
In the case of an explicit type, it is necessary to notify the real estate companies that you have requested mediation of which other real estate companies you have commissioned mediation to, even though the contract permits simultaneous requests to other real estate companies. On the other hand, in the case of a non-explicit type, it is not necessary to notify the real estate company of whether you have made concurrent requests to other real estate companies or what kind of companies you have been working with.
There are "an explicit type" and "a non-explicit type" in a general mediation contract.
In the case of an explicit type, it is necessary to notify the real estate companies that you have requested mediation of which other real estate companies you have commissioned mediation to, even though the contract permits simultaneous requests to other real estate companies. On the other hand, in the case of a non-explicit type, it is not necessary to notify the real estate company of whether you have made concurrent requests to other real estate companies or what kind of companies you have been working with.
Point 3: Matters to be confirmed with the real estate company prior to the conclusion of mediation
When a mediation contract is concluded, while the contents of the contract become clear, various contractual obligations arise for the client, so please be sure to keep in mind the points to be kept in mind.
(1) Clearly convey the desired conditions
It is important to reiterate to the real estate company the desired conditions, such as the time of purchase and the desired purchase price, based on circumstances such as the time when moving is possible and the financial plan necessary for purchase. Of course, there are cases in which purchase may be difficult under the desired conditions, so after sufficient discussion with the real estate company, final conditions should be determined.
(2) Confirm the contents of the mediation work
Before concluding a mediation contract, it is also important to reconfirm the contents of the mediation work presented by the real estate company. Failure to make this confirmation may result in a situation where you do not receive the services you thought you were entitled to.
(3) Check about brokerage fees
After clarifying the details of the brokerage business, confirm the brokerage fee. Make sure you understand the laws and regulations regarding brokerage commissions, etc., and discuss them with the real estate company.
It is important to reiterate to the real estate company the desired conditions, such as the time of purchase and the desired purchase price, based on circumstances such as the time when moving is possible and the financial plan necessary for purchase. Of course, there are cases in which purchase may be difficult under the desired conditions, so after sufficient discussion with the real estate company, final conditions should be determined.
(2) Confirm the contents of the mediation work
Before concluding a mediation contract, it is also important to reconfirm the contents of the mediation work presented by the real estate company. Failure to make this confirmation may result in a situation where you do not receive the services you thought you were entitled to.
(3) Check about brokerage fees
After clarifying the details of the brokerage business, confirm the brokerage fee. Make sure you understand the laws and regulations regarding brokerage commissions, etc., and discuss them with the real estate company.
Point 4: Contents of a mediation contract and matters to be confirmed
As for a mediation contract, the Minister of Land, Infrastructure, Transport and Tourism publicly announces "Standard mediation contract terms and conditions" (hereinafter referred to as "Standard terms and conditions") for the purpose of standardization of mediation contracts and consumer protection. Since a mediation contract is generally concluded by the standard terms and conditions regarding mediation for a residence, etc., it is important to correctly understand the contents and matters to be confirmed.
In addition, the real estate company will indicate whether or not the real estate company can arrange for the person who conducts the building condition survey (inspection) (limited to those conducted by an architect who has completed the training course specified by the Minister of Land, Infrastructure, Transport and Tourism), and will specify whether or not such arrangement can be made in the mediation contract document.
In addition, the real estate company will indicate whether or not the real estate company can arrange for the person who conducts the building condition survey (inspection) (limited to those conducted by an architect who has completed the training course specified by the Minister of Land, Infrastructure, Transport and Tourism), and will specify whether or not such arrangement can be made in the mediation contract document.
📖Items to be Confirmed in the Mediation Contract
The "standard mediation contract clauses" (hereinafter referred to as "Standard clauses") cover the basic matters to be stipulated in a mediation contract, and prevent a mediation contract disadvantageous to the consumer from being concluded.
The following is an outline of the standard conditions of contract and matters to be confirmed.
If there are any conditions that are not included in the Standard Terms and Conditions, make them as clear as possible by adding them. The Ministry of Land, Infrastructure, Transport and Tourism also recommends that matters that are not disadvantageous to the client be added to the Standard Terms and Conditions in a more specific manner.
The following is an outline of the standard conditions of contract and matters to be confirmed.
If there are any conditions that are not included in the Standard Terms and Conditions, make them as clear as possible by adding them. The Ministry of Land, Infrastructure, Transport and Tourism also recommends that matters that are not disadvantageous to the client be added to the Standard Terms and Conditions in a more specific manner.
Matters to be confirmed in the mediation contract (standard terms and conditions)
(1) Whether the contract is based on standard terms and conditions or not
The Ministry of Land, Infrastructure, Transport and Tourism instructs a real estate company to conclude a mediation contract based on standard terms and conditions. Since whether or not it is a contract based on standard terms and conditions is indicated in a mediation contract, confirm it. If it is a contract not based on standard terms and conditions, ask the reason why standard terms and conditions are not used.
(2) Types of mediation contracts
It is stated in the contract whether it is a full-time mediation contract, under-exclusive-contract exclusive duty mediation contract, or general mediation contract. Moreover, in the case of a general mediation contract, whether it is an explicit type or a non-explicit type is described. Check whether it is the contract which you hope for.
(3) Display of the subject property
The property subject to brokerage or the desired conditions of purchase are indicated, check for any errors.
(4) Obligations and duties of a real estate company
The basic duties to be provided by the real estate company are specified. It is possible to describe the details of the duties in greater detail. After confirming the duties of the real estate company and the contents of its business, if there are any matters to be added, coordinate with the real estate company.
(5) Effective period and renewal
The effective period of a mediation contract is described. A full-time mediation contract and exclusive-contract full-time mediation contract have the legal regulation that an effective period must not exceed three months. Although there is no legal regulation concerning an effective period in a general mediation contract, it is assumed to be decided within the range not exceeding three months in standard terms and conditions. Set the validity period in consideration of the expected purchase schedule, etc. (It is also possible to make a contract for a period shorter than three months.)
The mediation contract will be renewed by an offer from the client at the expiration of the effective period. Please decide the effective period after renewal within the range not exceeding three months. A mediation contract is renewed only by the client's request, and is not automatically renewed. Please carefully determine whether or not to renew by the client's own judgment.
(6) Brokerage value
The desired purchase price, etc., which was finally determined based on the desired purchase price of the prospective buyer and the advice of the real estate company, is stated. Since this is an important agreement that affects negotiations up to purchase, be sure to check it thoroughly.
(7) Brokerage fee (compensation)
The amount of a mediating fee to be paid to a real estate company and the time of payment are described. Since there are many troubles concerning a mediating fee, discuss with a real estate company thoroughly before concluding a mediation contract. In addition, since there are laws and regulations concerning the maximum amount of a mediating fee that a real estate company can receive, please understand the outline before discussing with a real estate company.
(8) Obligations of the client
In the standard terms and conditions, the obligations of a client is also defined in order for the client and the real estate company to proceed with the transaction in good faith with each other. If there is a breach of duty by the client, the real estate company can claim expenses, etc. to the client based on a mediation contract, up to the amount equivalent to a brokerage fee.
● Obligation when a general mediation contract (explicit type) is concluded
If you request mediation to another real estate company concurrently during the term of validity of a mediation contract, you are obligated to notify the real estate company to that effect.
● Obligations common to a general mediation contract (non-explicit type) and (explicit type)
(9) Cancellation of a mediation contract
A mediation contract can be canceled in the following cases.
● Cases in which either a client or a real estate company can cancel the contract
When one of a client or a real estate company does not perform the duties defined in a mediation contract, and when the other party does not perform the duties in spite of having set a reasonable period of time to perform them, a mediation contract can be canceled by the other party. (In other words, if there is a "breach of contract" with regard to a mediation contract, it can be terminated within a certain period of time if the other party does not perform even if you demand that he or she fulfill the obligation).
● Cases in which a client can cancel the contract
(10) Exclusion of Anti-Social Forces
For the purpose of "exclusion of antisocial forces" from real estate transactions, standard model clauses for exclusion of antisocial forces have been introduced. Confirm that clauses such as "the person who request mediation and the real estate company/agent are not members of anti-social forces such as organized crime groups" are included in the clause of a mediation contract with a real estate company. If the other party acts contrary to these, the contract can be canceled.
(11) Mediation of persons who conduct building condition inspections
Under the Standard Terms and Conditions, a building condition investigation (investigation to grasp whether or not events such as cracks, rainwater leaks, etc., have occurred in a building) is implemented at the time of an existing house transaction, so that a purchasing decision and negotiation can be made after fully understanding accurate information concerning the state of the housing that is the subject of the transaction. The client's intention will be confirmed by indicating the possible mediation of the person who carries out a building condition investigation and specifying the presence or absence of mediation in the mediation contract document.
(1) Whether the contract is based on standard terms and conditions or not
The Ministry of Land, Infrastructure, Transport and Tourism instructs a real estate company to conclude a mediation contract based on standard terms and conditions. Since whether or not it is a contract based on standard terms and conditions is indicated in a mediation contract, confirm it. If it is a contract not based on standard terms and conditions, ask the reason why standard terms and conditions are not used.
(2) Types of mediation contracts
It is stated in the contract whether it is a full-time mediation contract, under-exclusive-contract exclusive duty mediation contract, or general mediation contract. Moreover, in the case of a general mediation contract, whether it is an explicit type or a non-explicit type is described. Check whether it is the contract which you hope for.
(3) Display of the subject property
The property subject to brokerage or the desired conditions of purchase are indicated, check for any errors.
(4) Obligations and duties of a real estate company
The basic duties to be provided by the real estate company are specified. It is possible to describe the details of the duties in greater detail. After confirming the duties of the real estate company and the contents of its business, if there are any matters to be added, coordinate with the real estate company.
(5) Effective period and renewal
The effective period of a mediation contract is described. A full-time mediation contract and exclusive-contract full-time mediation contract have the legal regulation that an effective period must not exceed three months. Although there is no legal regulation concerning an effective period in a general mediation contract, it is assumed to be decided within the range not exceeding three months in standard terms and conditions. Set the validity period in consideration of the expected purchase schedule, etc. (It is also possible to make a contract for a period shorter than three months.)
The mediation contract will be renewed by an offer from the client at the expiration of the effective period. Please decide the effective period after renewal within the range not exceeding three months. A mediation contract is renewed only by the client's request, and is not automatically renewed. Please carefully determine whether or not to renew by the client's own judgment.
(6) Brokerage value
The desired purchase price, etc., which was finally determined based on the desired purchase price of the prospective buyer and the advice of the real estate company, is stated. Since this is an important agreement that affects negotiations up to purchase, be sure to check it thoroughly.
(7) Brokerage fee (compensation)
The amount of a mediating fee to be paid to a real estate company and the time of payment are described. Since there are many troubles concerning a mediating fee, discuss with a real estate company thoroughly before concluding a mediation contract. In addition, since there are laws and regulations concerning the maximum amount of a mediating fee that a real estate company can receive, please understand the outline before discussing with a real estate company.
(8) Obligations of the client
In the standard terms and conditions, the obligations of a client is also defined in order for the client and the real estate company to proceed with the transaction in good faith with each other. If there is a breach of duty by the client, the real estate company can claim expenses, etc. to the client based on a mediation contract, up to the amount equivalent to a brokerage fee.
● Obligation when a general mediation contract (explicit type) is concluded
If you request mediation to another real estate company concurrently during the term of validity of a mediation contract, you are obligated to notify the real estate company to that effect.
● Obligations common to a general mediation contract (non-explicit type) and (explicit type)
- When a sales contract is concluded, you must notify all real estate companies to which you requested mediation to that effect. This is to avoid other real estate companies continuing their brokerage business without knowing the fact that a contract has been concluded.
- It is prohibited to conclude a sales contract (this is called "direct dealing") with the seller of the housing referred to by a real estate company during the effective period of a mediation contract for two years after the termination of the mediation contract, without working through that real estate company. This prevents "insincere" dealings such as intentionally terminating a mediation contract and then contracting with the seller who was introduced by a real estate company in order to avoid the payment of a mediation fee to the real estate company.
(9) Cancellation of a mediation contract
A mediation contract can be canceled in the following cases.
● Cases in which either a client or a real estate company can cancel the contract
When one of a client or a real estate company does not perform the duties defined in a mediation contract, and when the other party does not perform the duties in spite of having set a reasonable period of time to perform them, a mediation contract can be canceled by the other party. (In other words, if there is a "breach of contract" with regard to a mediation contract, it can be terminated within a certain period of time if the other party does not perform even if you demand that he or she fulfill the obligation).
● Cases in which a client can cancel the contract
- When a real estate company does not execute the business set forth in a mediation contract in good faith
- When a real estate company intentionally or by gross negligence does not tell a fact or tells a falsehood about important matters concerning a mediation contract
- When a real estate company commits a dishonest or extremely unfair act with regard to the Real Estate Brokerage Act (including cases where there has been misconduct in the brokerage business of another client)
(10) Exclusion of Anti-Social Forces
For the purpose of "exclusion of antisocial forces" from real estate transactions, standard model clauses for exclusion of antisocial forces have been introduced. Confirm that clauses such as "the person who request mediation and the real estate company/agent are not members of anti-social forces such as organized crime groups" are included in the clause of a mediation contract with a real estate company. If the other party acts contrary to these, the contract can be canceled.
(11) Mediation of persons who conduct building condition inspections
Under the Standard Terms and Conditions, a building condition investigation (investigation to grasp whether or not events such as cracks, rainwater leaks, etc., have occurred in a building) is implemented at the time of an existing house transaction, so that a purchasing decision and negotiation can be made after fully understanding accurate information concerning the state of the housing that is the subject of the transaction. The client's intention will be confirmed by indicating the possible mediation of the person who carries out a building condition investigation and specifying the presence or absence of mediation in the mediation contract document.
📖Brokerage Fees
Brokerage Fees
To prevent trouble concerning a brokerage fee, it is important to take note of the legal regulations for brokerage fees and the precautions to be taken when concluding a mediation contract.
Brokerage fees are capped by law.
According to the Real Estate Brokerage Act, there is a maximum amount of brokerage fees that a real estate company can receive. Therefore, if a real estate company receives a brokerage fee that exceeds the maximum amount, it is in violation of the law. While the maximum amount that is stipulated by law, it does not mean that the maximum amount can automatically be charged.
A brokerage fee is incurred only after a sales contract is concluded.
In the brokerage of a real estate transaction, the real estate company's right to charge a brokerage fee occurs when a sales contract is concluded. (It is generally called "a transaction completion fee.") Therefore, it is not necessary to pay a real estate company a mediating fee until a sales contract is concluded.
The timing of commission payments is also to be discussed.
When a sales contract is concluded, the right to claim a brokerage fee arises from the real estate company. For example, it is not illegal if the full amount of the brokerage fee is paid to the real estate company at the time the sales contract is concluded. However, since in real estate transactions there are many cases in which delivery has not been completed at the time of contract conclusion, it is generally common to pay 50% of a mediating fee at the time of contract conclusion, and to pay the remaining 50% at the time of completion of delivery.
Handling of expenses other than brokerage fees, etc.
Expenses incurred by a real estate company in ordinary brokerage work cannot be charged to the client. For example, the costs related to advertising expenses and site visits for prospective buyers that are generally conducted are included in the brokerage fee that is incurred when a sales contract is concluded. Exceptionally, "actual expenses" such as advertising expenses incurred based on the client's special request are allowed to be charged. For example, a real estate company can claim the cost of advertising that was specially implemented at the client's request, travel expenses for negotiations with a prospective purchaser in a remote area that were conducted at the client's request, etc., separately from the brokerage fee.
However, it should be noted that the exceptions are limited to cases where all of the following conditions are met:
(1) the cost was incurred based on the client's request,
(2) the cost is not incurred in the ordinary brokerage business, and
(3) the cost is an actual cost.
To prevent trouble concerning a brokerage fee, it is important to take note of the legal regulations for brokerage fees and the precautions to be taken when concluding a mediation contract.
Brokerage fees are capped by law.
According to the Real Estate Brokerage Act, there is a maximum amount of brokerage fees that a real estate company can receive. Therefore, if a real estate company receives a brokerage fee that exceeds the maximum amount, it is in violation of the law. While the maximum amount that is stipulated by law, it does not mean that the maximum amount can automatically be charged.
A brokerage fee is incurred only after a sales contract is concluded.
In the brokerage of a real estate transaction, the real estate company's right to charge a brokerage fee occurs when a sales contract is concluded. (It is generally called "a transaction completion fee.") Therefore, it is not necessary to pay a real estate company a mediating fee until a sales contract is concluded.
The timing of commission payments is also to be discussed.
When a sales contract is concluded, the right to claim a brokerage fee arises from the real estate company. For example, it is not illegal if the full amount of the brokerage fee is paid to the real estate company at the time the sales contract is concluded. However, since in real estate transactions there are many cases in which delivery has not been completed at the time of contract conclusion, it is generally common to pay 50% of a mediating fee at the time of contract conclusion, and to pay the remaining 50% at the time of completion of delivery.
Handling of expenses other than brokerage fees, etc.
Expenses incurred by a real estate company in ordinary brokerage work cannot be charged to the client. For example, the costs related to advertising expenses and site visits for prospective buyers that are generally conducted are included in the brokerage fee that is incurred when a sales contract is concluded. Exceptionally, "actual expenses" such as advertising expenses incurred based on the client's special request are allowed to be charged. For example, a real estate company can claim the cost of advertising that was specially implemented at the client's request, travel expenses for negotiations with a prospective purchaser in a remote area that were conducted at the client's request, etc., separately from the brokerage fee.
However, it should be noted that the exceptions are limited to cases where all of the following conditions are met:
(1) the cost was incurred based on the client's request,
(2) the cost is not incurred in the ordinary brokerage business, and
(3) the cost is an actual cost.
Maximum brokerage fees
The maximum amount of a brokerage fee to be paid to a real estate company is set for each monetary category of the sales price as follows.
The maximum amount of a brokerage fee to be paid to a real estate company is set for each monetary category of the sales price as follows.
The maximum amount of a brokerage fee for land with a sales price of 10 million yen
→ The sales price is broken down and calculated as follows.
a) The portion up to 2 million yen
2,000,000 yen x 5% = 100,000 yen
b) The portion exceeding 2 million yen up to 4 million yen
2,000,000 yen x 4% = 80,000 yen
c) The portion exceeding 4 million yen up to 10 million yen
6,000,000 yen x 3% = 180,000 yen
a + b + c = 360,000 yen
*The amount obtained by adding the consumption tax to this amount is the maximum amount of the brokerage fee.
→ The sales price is broken down and calculated as follows.
a) The portion up to 2 million yen
2,000,000 yen x 5% = 100,000 yen
b) The portion exceeding 2 million yen up to 4 million yen
2,000,000 yen x 4% = 80,000 yen
c) The portion exceeding 4 million yen up to 10 million yen
6,000,000 yen x 3% = 180,000 yen
a + b + c = 360,000 yen
*The amount obtained by adding the consumption tax to this amount is the maximum amount of the brokerage fee.
- For properties exceeding 4 million yen, the following formula can be used to calculate the brokerage fee:
Special provisions for the sale and purchase of low-cost vacant houses, etc.
In the case of an inexpensive sale or purchase of a vacant house, etc., where the cost of on-site inspections, etc. is higher than usual, the brokerage fee that can be received from the seller of the vacant house or the person exchanging the house is limited to the total of the above maximum amount and the cost of on-site inspections, etc. (however, the maximum is 180,000 yen plus consumption tax). The brokerage fee must be agreed upon between the two parties in advance.
*Real estate companies to watch out for
Be wary of real estate companies that engage in the following inappropriate discussions regarding brokerage fees. If you have any doubts, you should clarify them until you are satisfied. If you receive an insincere explanation, there is room to reconsider your request to that real estate company.
In the case of an inexpensive sale or purchase of a vacant house, etc., where the cost of on-site inspections, etc. is higher than usual, the brokerage fee that can be received from the seller of the vacant house or the person exchanging the house is limited to the total of the above maximum amount and the cost of on-site inspections, etc. (however, the maximum is 180,000 yen plus consumption tax). The brokerage fee must be agreed upon between the two parties in advance.
*Real estate companies to watch out for
Be wary of real estate companies that engage in the following inappropriate discussions regarding brokerage fees. If you have any doubts, you should clarify them until you are satisfied. If you receive an insincere explanation, there is room to reconsider your request to that real estate company.
- Offering commission terms that exceed the maximum amount.
- Explaining the maximum amount as if it were a flat fee set by law.
- Automatically charging advertising fees, etc. that are incurred in addition to the brokerage fee.