The Dual Agency system in Japan

Japanese business start-up consultant

In Japan, it is common and legally permitted for an estate agent to represent both purchaser and seller in real estate sales transaction. It is called “Dual Agency”.

When an estate agent deals with a real estate sales transaction under the Dual Agency system, the agent can obtain a brokerage fee from both the purchaser and seller, so that many such cases can be seen, especially as major estate agencies positively try to establish a transaction of this type.

The strength of Dual Agency is that both purchaser and seller can expect quick response and a grasp of details concerning the property because only one estate agent is being consulted about the real estate sale transaction and a purchaser can get more detailed information than if two estate agents dealt with the case.

However, a drawback of Dual Agency is that an estate agent might push a seller to reduce the price of their property to make sure quickly of securing the large brokerage fee revenue from both purchaser and seller on the conclusion of the sales contract. It might be an unfavourable transaction for a seller.

It is also common that a Shihoshoshi lawyer, the transactional lawyer for a real estate transaction represents both purchaser and seller and an estate agent generally specifies a particular Shihoshoshi lawyer for the transaction. It is called “Dual Lawyer”.

In some cases, a special clause, such as “the seller should be represented by a designated Shihoshoshi lawyer, specified by the seller or the estate agent for the procedure for transfer of the ownership” is written on sales and purchase agreement. If there is no special clause about a designated Shihoshoshi lawyer in the sales and purchase agreement, it is likely a buyer can choose any lawyer for the procedure for transfer of the ownership. Generally speaking, especially in Tokyo, a buyer pays all the costs of the procedure for transfer of the ownership for the real estate sales transaction. Because of that, a buyer can choose which lawyer to consult for the transaction.

司法書士堀明子 – HORIakiko –
司法書士 / ビジネスコンサルタント / ライフ・コーチ
Shiho-shoshi Lawyer / Business consultant / Life coach
Tel: +81-(0)3-3249-1536

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