How Much Is the Real Estate Sales Brokerage Fee? Calculation of the Maximum Limit, Quick Reference Chart, and Payment Timing
Among the costs involved when selling real estate, the brokerage fee is often the largest. In cases such as selling an entire apartment building where the sale price is in the hundreds of millions of yen, the brokerage fee can be several million yen.
This article explains how the maximum brokerage fee is determined, the maximum amounts by sale price, the special provision for low-priced properties starting July 2024, the timing of payment and approaches to negotiation, and methods of selling without brokerage fees.
What Is a Brokerage Fee?
A brokerage fee is a commission paid to a real estate company (real estate transaction business operator; 宅地建物取引業者) when the sale contract is successfully concluded after requesting the company to mediate the sale. Since it is a success fee, there is no fee payable if a buyer is not found and a contract is not concluded.
The amount of the brokerage fee has a legally defined maximum limit set by the Real Estate Transaction Business Act (宅地建物取引業法) and notices from the Ministry of Land, Infrastructure, Transport and Tourism. It is prohibited to receive more than this maximum, but it is permissible to charge less. The "3% + 60,000 yen" is strictly the maximum and not a fixed or standard price, so this point should be noted.
Calculation Method for the Maximum Amount
The maximum fee is calculated by dividing the sale price (excluding tax) into three brackets, multiplying each by its respective rate, and summing the results.
| Sale Price Bracket | Rate (excluding tax) |
|---|---|
| Portion up to 2 million yen | 5% |
| Portion over 2 million yen up to 4 million yen | 4% |
| Portion over 4 million yen | 3% |
If the sale price exceeds 4 million yen, the quick formula "Sale Price × 3% + 60,000 yen" yields the same result and simplifies the calculation. If the real estate company is a taxable business for consumption tax, consumption tax (10%) will be added on top of this.
Furthermore, if the sale price includes consumption tax on the building portion (such as when the seller is a taxable business), the calculation is based on the price excluding tax.
Quick Reference Chart for Maximum Fee by Sale Price
The table below shows maximum amounts by sale price calculated using the quick formula (assuming the real estate company is a taxable business for consumption tax).
| Sale Price | Maximum Amount (excluding tax) | Maximum Amount (including tax) |
|---|---|---|
| 10 million yen | 360,000 yen | 396,000 yen |
| 30 million yen | 960,000 yen | 1,056,000 yen |
| 50 million yen | 1,560,000 yen | 1,716,000 yen |
| 100 million yen | 3,060,000 yen | 3,366,000 yen |
| 200 million yen | 6,060,000 yen | 6,666,000 yen |
| 300 million yen | 9,060,000 yen | 9,966,000 yen |
Basis of calculation: Article 46 of the Real Estate Transaction Business Act, Ministry of Land, Infrastructure, Transport and Tourism notification (Commission amounts for brokerage of sales and exchanges).
Special Provision for Properties Priced 8 Million Yen or Less (From July 2024)
There has been an issue that brokerage fees for low-priced properties such as old detached houses or rural land tend to be low, making them difficult for real estate companies to handle. Therefore, from July 2024, a special provision sets the maximum brokerage fee at 300,000 yen (excluding tax) for sales prices of 8 million yen or less for land or buildings.
For example, for a sale price of 5 million yen, the normal maximum is 210,000 yen (excluding tax), but this provision allows receipt of up to 300,000 yen (excluding tax). To apply this special provision, the real estate company must explain it to the client at the time of the brokerage agreement and obtain consent. When selling low-priced properties, be sure to confirm the fee amount before concluding the contract.
Payment Timing and Fee Negotiation
The brokerage fee is generally paid half at the time of signing the sale contract and the remaining half upon settlement and delivery. The handling of cases where the buyer’s financing fails after contract signing and the contract is canceled (due to loan contingency clauses) should also be confirmed in the brokerage contract.
It is possible to set the fee lower than the maximum, so negotiation is an option. However, significantly reducing the fee might result in real estate companies reducing their efforts in advertising and buyer search. Since the sales power of the real estate company directly affects price and speed of sale, it is recommended to judge not only by the fee amount but together with the content of their sales activities.
Also, advertising costs separate from the brokerage fee can only be billed for special advertising requested by the seller (beyond normal sales activities) on an actual expense basis. Regular advertising costs are included in the brokerage fee.
Dual Agency and Single Agency
When the same real estate company mediates for both the seller and buyer, it is called "dual agency" (両手仲介). When mediating for only the seller side or buyer side, it is called "single agency" (片手仲介). In dual agency, the real estate company can receive brokerage fees up to the maximum limit from both the seller and the buyer.
Dual agency itself is not illegal, but to find buyers within the company, some real estate companies have engaged in "enclosure" (囲い込み), where they respond to inquiries from other companies with "under negotiation" and do not introduce the property. Starting January 2025, it will be required to accurately register the transaction status of properties listed in REINS (the real estate companies’ property information system). Enclosure will be clearly subject to administrative penalties. When contracting with exclusive or exclusive right-to-sell agency agreements, receiving the REINS registration certificate and confirming the transaction status display will provide peace of mind.
Ways to Sell Without Brokerage Fees: Purchase by Real Estate Company
In the case of "purchase" where a real estate company buys the property directly as the buyer, it is not brokerage and no brokerage fee is charged. Since there is no period spent finding a buyer, conversion to cash is faster, and contracts often include exemption from warranty liabilities for defects.
On the other hand, purchase prices tend to be lower than when selling through brokerage to general investors. To make a decision easier, compare the net proceeds from selling through brokerage (sale price − brokerage fee − other costs) with the net proceeds from a direct purchase. Other costs and taxes related to selling are explained in "Revenue Property Sale Process".
Summary
- Brokerage fees are success fees with legal maximum limits regulated by the Real Estate Transaction Business Act. It is possible to charge lower than the maximum.
- The maximum for sale prices over 4 million yen is "Sale Price × 3% + 60,000 yen" plus consumption tax. For 100 million yen, this is 3,366,000 yen including tax.
- From July 2024, a special provision caps fees at 300,000 yen (excluding tax) for properties priced 8 million yen or less (prior explanation and consent required).
- Payment is generally half at contract signing and half at settlement. Choose a real estate company not only by fee but also by the quality of their sales activities.
- There is no brokerage fee when selling by direct purchase. Compare net proceeds from brokerage and purchase methods.
About this article
- Author
- Eiichi Suto（Real Estate Brokerage / Renovation）Qualifications: Real Estate Transaction Specialist, General Insurance Solicitor Qualification, Assistant Commercial Facilities Planner, Level 2 Assistant Landscape Construction Management Engineer, Level 1 Assistant Civil Engineering Construction Management Engineer
Brings over 20 years of experience in the real estate industry, working across central Tokyo and the broader Greater Tokyo area on acquisitions and sales of income-producing and commercial properties. Leverages an inter-broker network to uncover off-market opportunities, assess asset quality, and evaluate project profitability, while developing diverse sourcing channels ranging from whole-building investment assets to value-add opportunities. Has consistently led the process from acquisition decisions through resale strategy and renovation planning, building high-conviction deals with strong execution potential.
View profile → - Publisher
- TLL合同会社宅地建物取引業 東京都知事(1)第108202号住宅宿泊管理業 国土交通大臣(01)第F03424号
Data in this article cite their source and as-of date. Market conditions and regulations change, so check the latest information and consult a professional before deciding. Translated from the Japanese original.
