When a homeowner in Japan wants to sell their property, they will usually contract with a real estate broker to locate a buyer. However, there are three different types of representation that a seller can choose from: 1) general (ippan), 2) full service (sennin), and 3) exclusive full service (senzoku sennin)—and it pays to know what each entails.

In addition to the three types of broker representation, the scope may vary: a realtor can be authorised by the seller to act as an agent (dairi) or an intermediary (baikai).

An agent is authorised to conclude a legal sales agreement between the seller and a buyer. An intermediary, on the other hand, can introduce the buyer to the seller, but has no legal authority to compel the seller to conclude the sale of the property through their brokerage.

It's not only worth it for sellers to understand the differences between the different types of broker representation, but also for buyers, as the contracts can change the way a realtor represents a property. What follows is a basic overview and comparison.

Ippan: General representation

What it is

General representation describes a type of contract where the seller is free to engage several brokers at once to sell the same property. A general representation agreement may require the seller to inform the broker of the names of any other agents working on the same property.

What it means for sellers

At first glance, this might sound like the best option — having several agents trying to sell your home. However, it can be a hassle to deal with many realtors at once, and potentially only superficially due to time-constraints, instead of with just one.

Furthermore, it is generally assumed that a broker with an exclusive contract will try harder than one with a general contract, as another agent could render his/her efforts futile if they beat him/her to the sale.

Additionally, if the property is of low value, the commission is going to be low, which means it simply is not feasible for many agents to put in the effort. Therefore, general contracts aren’t very common on the market — and few brokers will agree to one.

What it means for buyers

Buyers can easily spot properties without full-service contracts: They are listed on the homepages of multiple realtors, are described differently and the price tag may vary too. Some agents don’t put a lot of effort into ippan listings and save time and money by putting up skeleton listings that do not including photos of the interior, e.g. only a floor plan and an exterior shot, and only minimal information on the property and the surrounding area.

Sennin: Full service

What it is

A full-service agreement is exclusive and prohibits the seller from engaging any other agents simultaneously for the property, either as an agent or intermediary — which makes the designated agent the sole representative for the seller.

In Japan, this means that the agent has a week to sell the property before they are legally obliged to list it on the national database of the Real Estate Information Network System for Eastern, Kinki, Central, or Western Japan (REINS). From that point, all licensed real estate agents that have access to the database can try to find a buyer for the property and can also list it on their homepages, or on real estate portals like Suumo and AtHome. However, these listings would be identical.

If the sennin agent sells the property, they can cash in on up to 3% commission from both the buyer and seller. If another realtor sells it after it has been listed on REINS, the sennin agent will receive the commission from the seller, while the other agent earns the buyer commission.

What it means for sellers

As the name “full-service” suggests, agents offer extras with sennin contracts, e.g. delivering detailed reports on the progress with interested buyers. Also, as they can receive up to 3% seller commission, they will usually try harder.

Contracts are typically set for three months, so homeowners can change to another agent if they’re not happy with the current one and the sale has not materialised.

What it means for buyers

For one week, a sennin property will not be on the open market, but only advertised by the sole agent. This means that some attractive properties never make it to the open market, as realtors keep lists of potential buyers and contact them as soon as they get a new full-service contract.

Many local agents only deal in full-service contracts. It is therefore advisable for house-hunters to choose the area they want to live or invest in, and to then contact local real estate agents and let them know what they are looking for.

Senzoku sennin: Exclusive full service

What it is

Similar to the sennin contract, an exclusive full-service representation agreement bars the seller from engaging any other brokers for the property. It also prohibits the seller from personally finding a buyer during the term of the contract.

What it means for sellers

While a full-service representation agreement needs to be registered with REINS within seven days of conclusion, an exclusive full-service representation agreement must be registered within five days. Other than that, the same pros and cons for a sennin agreement apply. 

Plus, if you personally find an interested buyer for your property, they will have to go through an agent and pay them the broker fee—otherwise they will not be allowed to purchase the property.

What it means for buyers

Again, the same procedure applies as for a sennin agreement. The property will be exclusively represented by one agent only, for a week, before it lists on REINS, so some very attractive senzoku sennin homes might never make it there.

If you are interested in buying an acquaintance’s property, you will have to go through an agent to purchase it if it is under a senzoku sennin contract.

By Mareike Dornhege

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