Here’s a question most foreign buyers never think to ask: when a Japanese real estate agent shows you a property, who is paying them?
Usually, the seller. Sometimes both sides at once. Almost never you alone.
That single fact shapes everything about how the transaction runs, what information reaches you, and whose interests are being protected when a decision has to be made. It’s the most important structural feature of the Japanese market for an overseas investor, and it’s rarely explained.
How Japanese Agency Normally Works
Japanese real estate agencies operate primarily as transaction intermediaries. An agency typically holds a mandate from a seller to find a buyer for a property, and earns commission on completing the transaction.
Critically, the practice of one agency representing both seller and buyer in the same deal — known as ryote torihiki (両手取引), literally “both hands” — is legal and widespread. The agency collects commission from each side.
This isn’t presented as a conflict, and within the Japanese market it’s simply how things are done. But think about what it means when you’re the buyer. The person advising you on whether to offer, how much to offer, and whether the property has issues is being paid more if you buy, paid by the other side as well, and, most importantly – has a vested interested in getting a particular property sold, to anyone who’ll take it.
What a Buyers’ Agent Does Instead
A buyers’ agency is engaged by you and works only for you. It takes no commission from sellers and represents no seller’s interest in the transaction.
Practically, that changes the job description:
- Searching the whole market rather than presenting a particular agency’s stock — including inventory that never appears in English
- Advising against properties, which a seller-side agent has no incentive to do
- Conducting due diligence for your benefit — registry, tenure, building condition, repair reserves, any stigmatised history
- Negotiating downward on your behalf, against the seller’s interest
- Being willing to say the honest thing: that nothing suitable is available right now
That last one is the real test. An agent who has never once told you to walk away is not representing you.
💡 NTI Insight: Ask any prospective representative one question: “Do you receive any payment, commission, or referral fee from the seller or the selling agency on this transaction?” The answer tells you who they work for, and it’s a question with only one correct shape. We publish fixed, pre-quoted fees precisely so this question has a boring answer in our case. If an answer arrives with qualifications and explanation attached, you’ve learned what you needed to know.
Why This Matters More for Foreign Buyers
A Japanese buyer facing the same structure has significant compensating advantages. They read the documents. They can call multiple agencies. They understand local pricing norms. They can visit six properties on a Saturday. The information asymmetry is manageable.
An overseas buyer has none of that. You’re seeing a curated subset of listings, translated by the person selling them, in a market whose pricing conventions you don’t have a feel for, from thousands of miles away.
In that position, the question of who is actually representing you stops being a technicality.
What It Costs, and What It Should In Short
Three takeaways. Standard Japanese agency practice has the agent paid by the seller — and frequently by both parties in the same deal — which is legal, normal here, and not designed around your interests. A buyers’ agency is engaged and paid only by you, which makes advising against a purchase possible rather than commercially irrational. And the structural gap matters far more for foreign buyers, who lack the language, access, and market feel that lets local buyers manage it themselves.
If you’d like to understand exactly who is representing whom in a deal you’re considering, contact us through the website and we’ll walk you through it.
This article is for informational purposes only and does not constitute legal or financial advice. Consult qualified professionals for your specific situation.
