Your real estate agent will act as an intermediary. He or she will be interacting with the buyers on your behalf. He or she may also help you with local property laws. For him or her to be able to represent you duly, you will need to sign a mediation agreement or a mediation contract.
Mediation contracts are of different types, depending on how much involvement you seek from your real estate agent in Japan.
The 3 main mediation contracts in order to sell real estate property in Japan include:
1. Non-exclusive: Multiple agents can list your property. The duration of the contracts is 3 months. You can sell the property on your own without the involvement of your real estate agent in case you find a buyer. Your agent can register your property in the REINS (Real Estate Information Network System) database. The real estate agent is not required to give your reports on an ongoing basis.
2. Exclusive: Only one agent handles your property. You can sell your property on your own if you find an interested party midway. The agent needs to register your property in the REINS within 7 days of signing the mediation contract. The agent reports to you at least once every 2 weeks.
3. Completely exclusive: Only one agent handles your property. You cannot sell your property on your own. The agent must register your property in the REINS database within 5 days of signing the mediation contract. He or she is supposed to report to you more than once a week.
What are the advantages and disadvantages of these different types of mediation contracts?
Non-exclusive mediation contract
|· Since the contract is non-exclusive, multiple real estate agents can promote your property. This means more advertising and promotion for your property.
· Since your property is not registered in the REINS database, the property can be offered for sale without advertising and even your neighbours don’t have to know that your property is up for sale.
· Your real estate agent can sell your property to the best buyer he or she can find. This will speed up the process and since the real estate agent will be earning commission off the sale, it will be in his or her best interest to get the best value for your property.
· You can sell the property on your own if you want and if you get a better deal.
|· The real estate agent doesn’t need to report to you frequently or even once so, you never know the status of the sales process.
· The real estate agent may not promote your property aggressively since the chance of closing the deal is lower because multiple agents might be promoting the same property. Even the owner of the property may sell the property to a buyer.
Exclusive mediation contract
|· You can sell the property on your own if you are getting a better deal than what your real estate agent is getting for you.
· The real estate agent proactively advertises the property.
|· Your real estate agent may not report to you about the progress of the selling process as often as you may like.|
Completely exclusive mediation contract
|· The real estate agent aggressively advertises your property.
· Since he or she has exclusive rights on the sale of the property, he or she is in a better position, and is more motivated, to get you a better sale price.
|· You cannot sell the property on your own even if you are getting a better deal than the real estate agent.
· There is higher dependency on the real estate agent.
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