You walk into a Tokyo brokerage. The agent shows you a listing. You like it. You sign. What you may not realize: that same agent is also representing the seller. In Japan, this is called ryote (両手) — literally "both hands." It is legal. It is common. And it changes the math of your purchase in ways most foreign buyers never see.
This article explains what ryote is, why it dominates the Japanese market, and what it does to you as a buyer. We will keep it concrete.
What ryote means in practice
In Japan, real estate brokerage commissions are capped by the Ministry of Land, Infrastructure, Transport and Tourism (国土交通省) at roughly 3% + ¥60,000 + consumption tax per side, for transactions above ¥4 million. "Per side" is the key phrase.
There are three configurations:
- Katate (片手) — one-sided. The buyer's agent and the seller's agent are different firms. Each collects 3% from their own client.
- Ryote (両手) — both-sided. One agent represents both buyer and seller. That single firm collects 3% from each. Total take: ~6%.
- Bukken-moto (物元) with ryote intent — the listing agent holds the property and tries hard to find the buyer in-house, specifically to capture both commissions.
Ryote is not illegal in Japan. It is illegal — or heavily restricted — in many U.S. states, the U.K., Australia, and parts of the EU, precisely because of the conflict of interest. Japan permits it, and the industry is built around it.
Why this matters to you
When one agent represents both sides, the agent's incentive is to close the deal, not to optimize either side's outcome. Read that again.
Your agent, in a ryote setup, is not negotiating hard against the seller. They cannot. The seller is also their client. If they push your price down ¥3 million, they have hurt their other client — and reduced their own 3% on the seller side. The structural incentive is to keep the price where the seller wants it and convince you it is reasonable.
This produces several observable tendencies:
- Less price negotiation. Reductions in ryote deals tend to be smaller than in katate deals, on average, based on broker-side data analyses circulating in the industry.
- Faster closes. Ryote agents move quickly because speed protects the dual commission. A slow buyer might consult another agent. That would break the ryote.
- Selective disclosure. Defects, neighborhood issues, building management problems — these are legally disclosable, but the framing in a ryote deal tilts toward closing.
- Weak comparables. Your agent is unlikely to walk you through three competing units in the same district that undercut the seller's asking price.
None of this requires the agent to be dishonest. The conflict is structural. Even a well-meaning agent in a ryote position cannot fully advocate for you.
How ryote gets engineered: kakoikomi (囲い込み)
There is a related practice you should know: kakoikomi (囲い込み), or "enclosing." When a brokerage takes a listing from a seller, it is required to register the property on REINS (レインズ), the inter-broker database run by designated real estate distribution organizations. This is supposed to expose the listing to all brokers nationwide.
In a kakoikomi pattern, the listing brokerage registers the property on REINS but then quietly tells other brokers who inquire that the property is "under negotiation" or "shōdan-chū (商談中)" — even when it is not. The goal: block other brokers from bringing buyers, so the listing firm can find the buyer itself and capture both commissions.
The Ministry of Land, Infrastructure, Transport and Tourism has acknowledged this issue and tightened reporting rules in recent years, including required status updates on REINS. Enforcement remains uneven.
For you as a buyer, the practical effect is:
- The pool of properties your agent shows you may be biased toward their own listings, or listings of partner firms with reciprocal arrangements.
- Properties you find yourself online (on SUUMO, HOMES, athome) may be quietly steered away from if your agent cannot capture both sides.
- "It's already in negotiation" is sometimes true, sometimes not.
The math on a ¥80 million Tokyo condo
Let us use a concrete example. A 60㎡ condo in central Tokyo (say, Minato-ku 港区), listed at ¥80,000,000.
Scenario A — Katate, with hard negotiation:
- Your independent buyer's agent pushes. Final price: ¥76,500,000.
- Your commission: ¥76,500,000 × 3% + ¥60,000 = ¥2,355,000 + tax.
- Your total outlay (price + commission): ~¥79,445,000.
Scenario B — Ryote, smooth and fast:
- Same agent represents both sides. Final price: ¥79,500,000 (small token reduction).
- Your commission: ¥79,500,000 × 3% + ¥60,000 = ¥2,445,000 + tax.
- Your total outlay: ~¥82,635,000.
The difference: about ¥3.2 million, or roughly 4% of the deal. That is not a rounding error. That is two years of property tax, or a full renovation budget for a small unit.
This is illustrative, not a forecast. Real outcomes vary by property, market tightness, and seller motivation. But the directional tendency is consistent across the analyses we run at RE : public.
How to detect ryote before you sign
You will rarely be told "this is a ryote deal" in plain language. You have to read the 重要事項説明書 (jūyō jikō setsumeisho) — the explanation of important matters — and the brokerage agreement carefully. Look for:
- 媒介契約 (baikai keiyaku) — the brokerage contract. If your agent is also listed as the seller's brokerage, that is ryote.
- 取引態様 (torihiki taiyō) — transaction type field on the property listing. The categories are:
- 売主 (urinushi) — the brokerage is the seller (new builds, often). No buyer-side commission, but no buyer advocacy either.
- 媒介 / 仲介 (baikai / chūkai) — brokerage acts as intermediary.
- 代理 (dairi) — brokerage acts as agent for one party.
- 専属専任媒介 (senzoku-sennin baikai) — exclusive listing held by one brokerage. High ryote risk.
If the same firm name appears on both your contract and the seller's side, you are in a ryote deal. Ask directly: "Are you also representing the seller?" (売主側もご担当ですか？) The answer must be honest under the Real Estate Brokerage Act (宅地建物取引業法).
What you can do about it
You have options. None are perfect.
1. Use a buyer-side-only agent
A small but growing number of brokerages in Tokyo position themselves as buyer-only (買主側専門). They refuse to take seller listings to avoid the structural conflict. You still pay ~3% commission, but the agent's incentive aligns with yours: get the lowest defensible price.
2. Get an independent second opinion
Before you sign, run the property past someone with no commission stake in the deal. This is what RE : public does — we provide a reference estimate and a risk analysis on the specific unit, the building's management state, REINS history if visible, and the neighborhood comparables. Not a valuation. An analysis result, with the assumptions exposed.
3. Negotiate on the commission itself
The 3% cap is a ceiling, not a fixed rate. In a ryote deal, the agent is collecting 6% in total. There is room. Some buyers successfully negotiate the buyer-side commission down to 2% or even 1.5%, especially on higher-value transactions. The agent will resist. Persist politely. Point to the dual-side income.
4. Cross-check on REINS access
Your agent has REINS access. You do not, directly. But you can ask for the REINS torihiki jōhō (REINS取引情報) printout — the registration record and status history of the property. If status changes look suspicious (long "under negotiation" stretches), ask why. A clean broker will show the record without hesitation.
5. Walk away from speed pressure
"Another buyer is interested, we need a decision today" is a standard ryote closing line. Sometimes it is true. Often it is not. A property worth ¥80 million deserves at least 48 hours of independent review. If the agent will not allow that, the deal itself is the warning.
What ryote is not
To be fair: ryote is not automatically a scam, and not every ryote agent is acting against you.
- Some ryote deals close at genuinely market-reasonable prices, especially in tight central-Tokyo submarkets where sellers have leverage anyway.
- For new-build (新築) condos sold directly by the developer (売主 transactions), the dynamic is different — there is no buyer-side commission at all, but also no independent buyer advocate built into the structure.
- A skilled, ethical agent in a ryote position can still surface defects and material issues. The legal disclosure obligations apply regardless of commission structure.
The point is not paranoia. The point is to understand the incentive landscape you are operating in, and to compensate for it deliberately.
A short checklist before you sign
- Confirm the 取引態様 in writing.
- Ask explicitly whether the brokerage represents the seller as well.
- Request the REINS registration and status history.
- Compare the asking price against at least five recent transactions in the same building or block (use the 不動産取引価格情報検索 public database from MLIT).
- Get a second opinion from a party with no commission interest.
- Negotiate the buyer-side commission, especially if ryote is confirmed.
- Do not sign under same-day pressure.
The bottom line
Ryote is a structural feature of the Japanese residential market, not a bug. It is not going away. As a foreign buyer, you are at extra risk because the language barrier and unfamiliarity with local norms make the structural conflict harder to detect in real time.
The defense is information. Know which side your agent is on. Know what the property has actually traded at, not just what it is listed at. Know that "let's close this week" is a closing tactic, not a market reality.
This is not investment advice. The final decision is yours.
For an independent second opinion on a specific unit, see RE : public.