Tokyu Livable,INC. - Real-Solution.biz

Overall flow of a real estate transaction in Japan

Baikai (or chukai), known as brokering or intermediation in English, is the act of working with a buyer and a seller toward forming a real estate agreement. When Tokyu Livable agrees to act as a brokerage for a buyer or seller in the purchase or exchange of a residence or building, the relationship is formalized in an agreement known as the "brokerage agreement".

According to the laws governing real estate transactions, a broker at the brokerage is obligated to explain certain matters to the seller and the buyer before an agreement is signed. Those matters include the details about the property and transaction as well as terms for cancelling the agreement.

Once the purchase and sales agreement is signed, the seller becomes obligated to transfer and deliver the ownership rights, and the buyer becomes obligated to make the agreed payment. Failure to act promptly on such obligations may result in cancellation of the agreement as well as loss of deposit or a fine for breach of contract. Before signing the agreement, it is therefore important to be thoroughly familiar with the details of the agreement.

Warning
Note that the documents involved in a real estate transaction are based on Japanese law and that the agreement is written completely in Japanese.

Buyer	Seller
Purchase and sales agreement revenue stamps Broker fee Registration fee Fixed assets tax and urban planning tax settlement Management fees Other settlement amounts Real estate acquisition tax (3 to 6 months after purchase)	Purchase and sales agreement revenue stamps Broker fee Registration fee * The following fees may apply in some cases: Survey costs Expenses for laying boundary markers Expenses for disposing of furnishings Removal or disassembly expenses Conveyance income and other taxes

The amount of compensation a brokerage may receive from a buyer or seller is limited by the Japanese government. The rates that are allowed are summarized in the below table.

Transaction amount	Brokerage commission
2 million yen or less	5.25%, 5% fee + 0.25% consumption tax
Greater than 2 million up to 4 million yen	4.2% - 4% fee + 0.2% consumption tax
Exceeding 4 million yen	3.15% - 3% fee + 0.15% consumption tax

Consumption tax is limited by law to not exceed 5%.