I cannot stand how difficult and opaque the Tokyo real estate market really is right now.
I work in real estate myself at a fully Japanese company, use REINS daily, and most of the properties I look at already come through connections and off market style networks. In other words, I do have the resources to be part of the behind the scenes side of the market.
Recently, I found a detached house: 100sqm, parking, 所有権, 3 minutes from a redeveloping station, 6 minutes by train from Shinagawa.
It was priced fairly, so I moved immediately.
The listing was 専任 with a major brokerage, so negotiations were already delicate. I made sure the brokerage would receive fees from both sides so they would prioritize us.
(Look up 囲い込み for those who don’t know — where large real estate firms turn away outside buyers in order to maximize their own commissions. Over 60% of deals at some major firms are reportedly closed this way, with some reportedly over 85%.)
Yet right before signing, another behind the scenes buyer came in with an absurdly high offer far above market price, and the seller understandably chose the higher offer.
What frustrated me wasn’t simply losing the house. It was realizing that even when you are already inside the “behind closed doors” side of the industry, there is always someone with deeper pockets, stronger connections, or more influence waiting behind you.
That is the current Tokyo market.
The best listings rarely reach the public properly. Most people only end up seeing overpriced tower mansions, leftover inventory stronger buyers already passed on, cheaply reformed 1970s mansions, or weirdly shaped plots of land banks won’t even finance.
Meanwhile, the truly good properties turn into private bidding wars hidden entirely from normal buyers.
Even decent ones that do go public, Tokyo real estate companies feels incredibly scammy, and agents being pushy using tactics to pressure people to sign.
Honesty, what should be the most valued trait in this industry, feels long gone. It's all about money.
I seriously don’t think buyers looking for a home for the next 10–20 years deserve all these games and fees.
Somewhere along the way, real estate stopped being about helping people find homes and became about squeezing maximum money out of emotional decisions.
I truly do not think we deserve to be paid fees by %. It's should be a fixed fee, especially when it's residential.
by f52242002
26 comments
All real estate processes globally, it’s a crooks game.
Finaly a real estate agent that understand real estate like people who needs it to live in it.
Get good and earn some money you binbo 😂
Welcome to reality with all of us!
If you figure out how to get actual bargains on reasonable not ridiculously shitty let’s do let me know 🙁
I almost gave up on real estate in Tokyo, all houses with reasonable pricing have some or multiple extremely shitty aspects to them.
It’s kind of depressing at this point.
You work in real estate? You are part of the problem. You guys are a disease that needs to be eradicated everywhere
So a better offer came in before any commitments were made… Would be the same for anyone.
Sorry to hear, that sucks but losing to someone making a higher offer is unfortunately the only way for someone applying after you to cut the line and get the deal. Assuming you applied first, which usually leaves you the option to align on the higher offer, did you get the chance to align at least?
The other person offered more money, that has nothing to do with “behind closed doors”.
Always been about the money and your part of the game. Even you tried to access a nice property behind closed doors before the normal public could access it or see it. I’m sure you didn’t see a problem with that and neither do the greedy companies.
It’s all a joke and how it’s always been since kings and queens ruled.
Wait. The house went to the highest bidder? You don’t say.
I feel you buddy. there are no bargains.
as for pricing the market seems to be “transparent”and manipulated for max profit. either we are living in the wrong country or….. we are just dumb and poor 🙂
very rarely public auction property (by court order) has gems in the raw. if our needs are deviating from the standard buyers.
check BIT?
Getting outbid is annoying but that happens in every market. I think it is way worse in California where buyers get outbid most times. In Japan what you experienced is unusual (you tell us if you’re a pro) — it was a great deal and you tried to scoop it up and lost is all right?
The seller agents not sharing commissions with buyer agents should be illegal (is it?) but is practically hard to stop (the seller agents just claims they have another offer…).
All in all I think you are a bit upset and exaggerating… Buying isn’t that bad, no worse than any desirable market
Sucks, and I fully understand
But it seems what you want is a socialist property market.
And a world where people don’t care about money.
Nice idea but not realistic
On a human level, losing the house to someone with more money, isn’t great
Best of luck with the next one
You just got priced out. It’s not anything to do with the opaqueness of the market.
Sorry this is happening to you too, but it’s almost refreshing to hear that even people in the industry are affected by this skullduggery.
I am sorry but most agents are money face.
any agents
I’ve been working in Japanese real estate in the Greater Tokyo area for over ten years, and I think your numbers are a little off. You are exaggerating how sinister and unfair the market is.
I also work for a Japanese company, one that includes a team of people searching constantly for “off market” and other deals. Off market properties are usually inferior to what is available on the open market, except in rare cases, so this is an incredibly labor intensive job. Labeling a property as “off market” in most cases is a just way to add mystery to what are actually quite uncompetitive and boring properties. Most are eventually listed and sold alongside other properties, and indeed the major real estate brokerages make most of their money from properties sold on the market (not counting the income from the construction and develop divisions of the major companies).
As for the 囲い込みproperties, the number of used houses and condos sold this way is a lot closer to 5 percent of the market. By law, any agent that makes an exclusive brokerage agreement must list the properties in the system within a few days. The agencies who avoid listing properties fairly (doing 囲い込み ) tend to create enmity. The buyers they represent will be disappointed by the small number of bids they receive. Other agencies will stop working with them. Established real estate agencies don’t want this hit to their reputations and so you more often see 囲い込み practiced by small and desperate agencies.
Don’t get me wrong. There are indeed a lot of transactions that happen out of the public eye, but even these properties usually end up on the open market. Old buildings are purchased by companies and renovated to be resold. Or old houses are purchased to be torn down and rebuilt as a new house or apartment building. Ultimately this is an ongoing process of development and not a conspiracy to keep people from bidding on things.
OK, the market for new condominiums is indeed somewhat “off market” in that construction companies use allied or in-house agencies to sell the properties and don’t allow other agencies to join the fun. Basically it is a separate business that happens mostly outside the range of real estate brokerages.
And there are a few areas of Tokyo which are known as markets for trophy properties that people buy for status, or to park their cash. Perhaps these areas are what you are describing, your example being so close to Shinagawa station. Those areas have more in common with the insanely overpriced ski resort areas of Hokkaido or maybe someplace like Karuizawa, etc. and they are not really representative of most of Tokyo.
Also, the market for land in Tokyo is unusual because most builders also buy and sell the land they build on. It is a slow and awkward process to bid on and buy land for constructing a custom house, and individuals cannot move fast enough to outbid the builders themselves, so the whole industry of building custom houses tends to focus on the suburbs, where land is more plentiful and properties take more time to sell. Usually new custom houses built in central Tokyo are built by people who have already owned the land for quite some time or have inherited it recently. Or they buy the land from the builder.
Real estate and construction are two of the dirtiest [edit: legal] businesses around, and always have been.
Property as a speculative investment instead of a necessity will cause this kind of thing unfortunately.
Tell us something we don’t know. But good discussion anyways. Welcome to the club.
It feels like the edge you thought you had was not as big in reality. In the end I would be not surprised if more than a million people have access to the database, maybe the bidder is hiring an agent for himself who advised him to bid higher.
One thing you can told yourself is the winner had to spend way more money than you would have to purchase this property’m.
Do you have any advice for someone going for a retail location in a mall for an entertainment business? For a KK that I co-own with a person who has PR
Is this specific to Tokyo or just higher end listings because I purchased last year but I was also exclusively looking at danchi apartments in west Saitama (the most expensive place I looked at was about 9 million, the cheapest 2.5 million, and the place I went with had been unoccupied for probably about a year and I had no trouble buying it)
my friend in real estate closes a lot of deals, both for his personal investments and helping folks out.
his first piece of advice for me when I went looking to buy was come with a envelope with 100 man in it for the agent representing the seller. he regularly convinces agents to block out better bids and get his bids in, and all it takes is a thick envelope. 10 million price increase can’t beat 1 million cash in pocket tax free. I’ve watched him close so many deals this way, I have come to expect all real estate agents accept and expect these kind gifts for a job well done after the fact if you want them to actually do the work.
good read. thanks for sharing
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