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About Brokerage fee, Agent fee for real estate in Japan

What’s 仲介手数料 [CHUKAI TESURYO] (ちゅうかいてすうりょう)?

Brokerage fee, Agent fee : The remuneration which a real estate dealer can receive from a client based on a brokerage contract when buying and selling, exchanging and leasing are concluded through the mediation of a real estate dealer.

Since it is a contingency fee, even if a lot of properties are introduced and it takes how long until it decides, it is not necessary to pay a reward if it does not conclude a contract.

However, the salary structure of a real estate salesperson is based on a high percentage of commission.
Therefore, if the customer does not make a decision quickly and continues to look for a property sluggishly despite the time and effort taken to find a property as per the customer’s request and take the customer to the site, their sales motivation will surely drop.

For Rent

Under the 宅地建物取引業法 [TAKUCHI TATEMONO TORIHIKI GYOHO] (たくちたてものとりひきぎょうほう) ”Building Lots and Buildings Transaction Business Law”, the brokerage fee that a real estate company can get from a tenant is “half of one month’s rent. The other half is supposed to be received from the lessor.
However, with the client’s approval, the company can receive the equivalent of one month’s rent from either the tenant or the landlord, so there are cases where the tenant pays one month’s brokerage fee, or conversely, there are places where 0.5 month’s fee or even “free” is OK. In some cases, the tenant pays one month’s commission.

[ CASE 1 ] In case a tenant pay for 1 month’s brokerage fee, and the property is for residential purpose.
ex)
Rent : 50,000JPY/month [No consumption tax charged] 管理費 [KANRI HI] (かんりひ) =共益費 [KYOEKI HI] (きょうえき ひ) “management fee” : 3,000JPY/month
Your brokerage fee is 55,000JPY [50,000 × 1.1 (consumption tax) = 55,000JPY] * Management fee does not include,

[ CASE 2 ] In case a tenant pay for 0.5 month’s brokerage fee, and the property is for residential purpose.
ex)
Rent : 50,000JPY/month [No consumption tax charged] 管理費 [KANRI HI] (かんりひ) =共益費 [KYOEKI HI] (きょうえき ひ) “management fee” : 3,000JPY/month
Your brokerage fee is 27,500JPY [50,000÷2=25,000  25,000× 1.1 (consumption tax) = 27,500JPY] * Management fee does not include,

[ CASE 3 ] In case a tenant pay for1 month’s brokerage fee, and the property is for business purpose such as store, office or restaurant.
ex)
Rent : 200,000JPY/month [Since the consumption tax will be charged, monthly payment would be 220,000JPY/month] 管理費 [KANRI HI] (かんりひ) =共益費 [KYOEKI HI] (きょうえき ひ) “management fee” : 10,000JPY/month
Your brokerage fee is 220,000JPY [200,000× 1.1 (consumption tax) = 220,000JPY] * Management fee does not include,

 

For Sale

It is common to pay half of the brokerage fee at the time of the sales contract, and the other half at the time of delivery!

Sales price (not included consumption tax) Brokerage fee (included consumption tax)
2 million below Sales price (not included consumption tax)× 5% + consumption tax
2 million or more and less than 4 million Sales price (not included consumption tax)× 4% + 20,000JPY + consumption tax
4 million or over Sales price (not included consumption tax)× 3% + 60,000JPY + consumption tax

According to the Ministry of Internal Affairs and Communications, as of 2013, the number of vacant houses stood at about 8.2 million, an increase of about 1.8 times in the past 20 years. Of these, about 3.18 million are not being used, excluding vacant houses that are being rented or sold.

Although the national government has set a goal of revitalizing the distribution of vacant houses, there have been cases where people have avoided real estate transactions themselves because the prices of properties are low for vacant houses in rural areas, and if the house is located far away from the city, the cost of surveying will be higher than usual, which may cause real estate agents to lose money.

Therefore, it has become possible to include the cost of a current survey separately from the brokerage fee, and when the sales price is 4 million yen or less, the real estate agent can receive up to 180,000 yen including the survey cost from the seller.

However, it is necessary to explain the remuneration amount to the seller beforehand at the time of the conclusion of the mediation contract, and to agree between both parties about the expense of the investigation.

[ CASE 1 ] In case you buy a secondhand condominium through a buyer’s agency,
ex) Sales price (not included consumption tax) : 10,000,000JPY
Your brokerage fee is 396,000JPY [10,000,000× 3%+60,000=360,000, 360,000 ×1.1(consumption tax) = 396,000JPY]

[ CASE 2 ] In case you buy a brand new condominium from a Seller,
Even if the seller is a real estate company, since the company is not an intermediary in a real estate transaction, you will not be charged for a brokerage fee.

[ CASE 3 ] In case you sell your secondhand single house through a Seller’s agency,
ex) Sales price (not included consumption tax) : 20,000,000JPY
Your brokerage fee is 72,6000JPY [20,000,000× 3%+60,000=660,000, 660,000 ×1.1(consumption tax) = 72,6000JPY]

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