Working in the real estate industry, we sometimes get a question from clients that runs something like this: "Real estate agents overseas seem to operate almost like freelancers, moving from listing to listing on their own — so why are they affiliated with a specific brokerage at all, rather than simply going independent?"
Add to that the picture painted by movies and TV dramas: a realtor overseas, earning a strong income, commanding real social standing, trusted by clients almost the way you would trust a doctor or a lawyer handling something deeply personal. Meanwhile, real estate sales in Japan still carries, fairly or not, a lingering image of aggressive quotas and pushy tactics — the sense that the salesperson is working toward their own target first, and the client's interest second.
What actually explains the gap between these two pictures? The answer comes down to three fundamental structural differences: the law, how compensation is structured, and the nature of an agent's responsibility to the client.
In this article, as the representative of INA&Associates, I want to lay out — in plain terms — how the structure of the overseas "Realtor" model differs from that of real estate sales in Japan. My hope is that understanding this structural difference in how the industry is built will be genuinely useful as you think through your own real estate transactions.
Why are overseas realtors affiliated with a brokerage at all?
The main reason a realtor overseas belongs to a specific real estate company — a brokerage — is simply that the law requires it. An individual agent is legally required to operate under the supervision of a broker, who holds a more senior qualification.
How the licensing system differs from Japan's
In Japan, once you hold the "Licensed Real Estate Transaction Specialist" qualification (takuchi tatemono torihikishi) and have built up some practical experience, you can go into business on your own. In the United States and many other countries, by contrast, the license is split explicitly into two tiers.
- Salesperson: the license held by a typical real estate agent. Passing the exam alone does not authorize you to work independently — you must register your license under a broker and carry out your work under that broker's direction.
- Broker: a more advanced qualification, earned after building up practical experience as a salesperson and passing a further, more demanding exam. A broker can establish their own real estate firm and is authorized to supervise multiple salespeople.
In other words, the great majority of realtors are, quite literally, legally unable to do the work of brokering a real estate deal at all unless they operate under the wing of a broker — their professional "boss," in effect.
| Category | Japan's Licensed Real Estate Transaction Specialist | The U.S. real estate license system |
|---|---|---|
| Number of license tiers | One (Licensed Real Estate Transaction Specialist) | Two (Salesperson, Broker) |
| Going independent | Possible once certain requirements are met | Not possible without a Broker license |
| Supervisory structure | A firm must appoint a dedicated licensed specialist | A Broker is required to supervise Salespersons |
Managing compensation, and guarding against litigation risk
It is well known that the United States is a famously litigious society, and real estate transactions are no exception — a contractual mistake or an inadequate disclosure can easily turn into an expensive lawsuit. An individual agent, working alone, would find it extremely difficult to shoulder that kind of liability by themselves. That is precisely why the real estate firm run by a broker functions, in effect, as the "breakwater" that underwrites the safety of the transaction.
- Centralized handling of compensation: agents are strictly prohibited from accepting a brokerage commission directly from a client. Every commission is first paid into the broker's company, and only then distributed to the agent according to a pre-agreed split set out in their contract. This keeps the flow of money transparent and makes it far harder for anything improper to happen.
- Supervisory liability and errors-and-omissions insurance: the broker is legally responsible for reviewing and guiding the contracts drafted by the agents under them. On top of that, carrying "Errors and Omissions (E&O) insurance" — coverage substantial enough to handle a serious lawsuit — has become a practical necessity, and that, too, ultimately protects the client.
The difference between "affiliation" and "employment"
A realtor is "affiliated" with a brokerage, but in most cases that relationship is nothing like the employment relationship of a regular salaried worker in Japan. Their working arrangement looks much closer to that of an independent contractor, and the relationship with the brokerage is typically structured as a contract for services rather than employment.
- Fully commission-based income: there is no fixed salary from the company — every dollar of income comes from a share of brokerage commissions. That means health insurance, retirement savings, and the like are entirely the agent's own responsibility. There are no fixed working hours either; how and when to work is left entirely to the individual's discretion.
- Access to a brand and to business tools: so why affiliate with a particular company at all? Because doing so buys access to the company's "signage" — its brand credibility — and to its business infrastructure, such as contract systems and office facilities. Affiliating with a major franchise such as RE/MAX or Keller Williams gives an individual agent a level of public trust and operational efficiency that would be very hard to build alone. In exchange, the agent pays the company a share of their revenue as a royalty.
Seen this way, it helps to think of overseas realtors not as employees in the Japanese sense at all, but as a collection of independent small business owners who each use the company as a platform — a brand, a set of tools, a legal safety net — to run their own individual business under their own name.
Why does social standing differ so much between overseas realtors and real estate salespeople in Japan?
The elevated social standing of realtors overseas rests on three structural pillars: a legal duty of loyalty to the client, an open real estate information market, and a national mindset that treats property as an investment asset.
A different duty of loyalty to the client
Where an agent stands in a real estate transaction differs sharply between Japan and the United States — and this difference is the single biggest driver of the gap in trust and social standing.
- Japan (a built-in conflict of interest): in Japan, it is legal — and in practice often encouraged — for a single sales representative to handle both the seller and the buyer in what is called "dual representation" (ryōte torihiki). Standing between a seller who wants the highest possible price and a buyer who wants the lowest possible price puts the agent in a structurally impossible position: they cannot fully represent either side.
- The United States (maximizing the client's own interest): in most U.S. states, the role of "seller's agent" and "buyer's agent" is legally and clearly separated. An agent carries a legal duty — known as a "fiduciary duty" — to maximize the interests of the specific client they represent. This is close to the role a lawyer plays for their client, and it is the foundation of the deep respect and trust clients place in a realtor.
A different level of information transparency
How openly real estate information is disclosed also shapes the industry very differently in the two countries.
- Japan (asymmetric information): Japan has a system called REINS, through which real estate companies share property listings with one another — but it is a closed database accessible only to industry insiders. That structure tends to give rise to sales tactics built around information asymmetry, such as pitching an "off-market property that hasn't hit the open market yet."
- The United States (an open market): the U.S. has the MLS (Multiple Listing Service), a regional real estate database. MLS listings are widely accessible to ordinary consumers through portals such as Zillow, so there is very little gap between what a professional sees and what the general public sees. A realtor's real value, in this environment, lies squarely in professional skill — analyzing publicly available data to determine a fair price, building the right negotiating strategy, and seeing a contract through to completion without legal missteps.
Whether real estate is seen as a "consumable" or an "asset"
Whether the public views real estate as something you consume, or as something you invest in, also shapes the picture.
- Japan (a home as a consumable good): in Japan, the common assumption is that a newly built structure "starts losing value the moment it's finished." As a result, buying a home tends to be viewed as "the single biggest purchase — the single biggest expense — of a lifetime."
- The United States (a home as an investment asset): in the U.S., with proper upkeep and favorable market conditions, the idea that "real estate is an asset that appreciates" is widely accepted. A realtor is positioned as a critical partner in a client's long-term wealth-building, and there's a well-known saying that a doctor, a lawyer, and a realtor are the three professionals worth keeping a lifelong relationship with.
| Category | Real estate sales in Japan | Realtors in the United States |
|---|---|---|
| Relationship with the client | Often represents both seller and buyer (dual representation) | Represents one side exclusively |
| Legal duty | A general duty of care | A fiduciary duty to the client |
| Access to information | Centers on an industry-only database (REINS) | Centers on a publicly accessible database (MLS) |
| Where value comes from | Access to off-market listings, sales ability | Data analysis, negotiation, legal knowledge |
| Public image | A salesperson selling property | A professional advisor who helps build wealth |
Conclusion: a structure of trust is what builds social standing
This article has looked at how the structure and social standing of overseas realtors differ from those of real estate salespeople in Japan. Overseas realtors are affiliated with a brokerage for two reasons: a legal obligation, and risk management in a highly litigious environment. They operate as independent contractors even as they draw on a broker's supervision and the company's credibility.
And behind the high professional standing they have earned lie three structural factors.
- A legal obligation: a codified "duty of loyalty" that requires serving one client's interest alone.
- Transparency of information: the MLS keeps real estate information open, creating an environment where professional skill, not access to secret listings, is what wins business.
- A mindset built around assets: real estate is treated as a valuable asset, and the realtor is recognized as the partner who helps build that value.
None of this comes from simply "earning a lot of money," which is often the surface-level explanation people reach for. What earns a realtor genuine respect is that a system of professionalism — grounded in maximizing the client's interest and protecting their asset — has been institutionalized in law and in industry practice, rather than left to individual goodwill or the personality of any one agent.
Japan's real estate industry is beginning to change too, with agent-style representation models starting to appear as the industry moves toward more client-centered service — but that shift has only just begun.
At INA&Associates, we have placed "people" and "trust" at the core of our business since our founding, with a mission of maximizing the interests of every single client we serve. We hope that our work, day by day, can be part of moving Japan's real estate industry in a better direction.
Frequently asked questions (FAQ)
Q1: Could Japan adopt an agent system like the one in the United States?
It would require changes to Japan's legal framework, but some movement is already underway — a push to favor single-side representation, and the emergence of agent-style brokerage services. Still, with dual representation legal under the current system, a full transition would take considerable time.
Q2: What does a realtor actually earn?
A U.S. realtor's income is entirely commission-based, calculated as a share of the transaction price — typically around 5% to 6% of the sale price in total, split between the seller's side and the buyer's side. Annual income varies enormously depending on an individual's track record: top agents can earn a great deal, while newcomers often take time to build up a stable income.
Q3: What can real estate salespeople in Japan do to build more trust?
The first step is putting the client's interest first and consistently offering honest information, including risks and downsides, rather than only the upside. Building expertise continuously and treating each client as an individual is what ultimately builds both personal trust and the reputation of the industry as a whole.
Q4: What's the biggest difference between the MLS and Japan's REINS?
The biggest difference is how widely the information is shared. MLS listings are broadly accessible to the general public through property portals, while REINS is a closed system that only real estate professionals can access. That asymmetry of information shapes the relationship between clients and sales representatives in a fundamental way.
