Agent lock-out is a practice where your listing agent puts their own interest ahead of yours, and it can work against you as the seller. Here's how it works, and what you as the seller can check for yourself.
- Agent lock-out is done to secure a double-sided commission — earning a fee from both the seller and the buyer.
- Some agents falsely tell other companies a property is "already under negotiation" to turn them away.
- You can check REINS registration status yourself.
- An exclusive agency or exclusive right-to-sell listing requires REINS registration by law.
- Getting regular reports on inquiry and viewing numbers is one way to guard against it.
What is agent lock-out?
Agent lock-out (kakoi-komi) is when the agent you've listed your property with turns away inquiries from prospective buyers introduced by other real estate companies — falsely claiming, for instance, that a deal is "already under negotiation" when no such negotiation exists — so that they can close the sale using only their own client base. Some cases come to light when a salesperson from another company is turned away, only to be granted a viewing days later after posing as a different representative.
Why it happens: the mechanics of dual agency
When a real estate company earns commission from both the seller and the buyer in the same deal — known as dual agency (ryōte chūkai) — its income is larger than when it can only collect from one side. This structure can create an incentive to avoid referring in buyers found by other companies. Because the combined commission a company earns is larger under a dual-agency deal than under a single-sided one, it's argued that this creates an incentive to exclude other companies' clients. How listing agreements work is a separate topic worth understanding on its own.
What happens when lock-out occurs
When lock-out happens, a buyer who might otherwise have purchased sooner, or on better terms, never gets the chance — the information never reaches the seller, and the listing period drags on. This can end up hurting both the final sale price and how long the sale takes. The problem is especially hard for sellers to notice under an exclusive agency or exclusive right-to-sell listing, since those don't allow you to list with another company in parallel.
What sellers can check for
The basic defense available to sellers is to get regular reports on the sale's progress, and confirm the actual number of inquiries and viewings. If inquiries seem unusually low during a period when you'd expect activity, it's worth asking your agent directly about the situation. Asking your agent to disclose which companies have inquired, and how serious those inquiries were, is also a useful way to keep track of what's really happening.
Checking REINS registration and status
Under an exclusive agency (sen'nin baikai) or exclusive right-to-sell (senzoku sen'nin baikai) listing, registering the property with REINS is a legal requirement. Once registration is complete, a "registration certificate" is issued, and you as the seller can review it yourself. You also have the right to check whether the REINS status shows the property as "open" (publicly listed). If the status shows something like "written purchase offer received," it's worth asking your agent for the basis of that. You can check the REINS status using the viewing ID and password issued to sellers who've signed an exclusive agency or exclusive right-to-sell agreement.
How the type of listing agreement relates to this
Under an open listing (ippan baikai), you can list with multiple companies at once, which lowers the risk of lock-out — though it brings its own challenge, since the level of effort can vary between companies. Understanding the characteristics of each type of listing agreement, and raising any concerns about lock-out with your agent early, is the important thing.
Frequently asked questions
Can I check for myself whether I'm being locked out?
Under an exclusive agency or exclusive right-to-sell listing, you can check the REINS registration certificate and status. It's a good idea to check this alongside reports on inquiry and viewing numbers.
Why does agent lock-out happen?
It's believed to stem from an agent's incentive to secure a double-sided commission by closing the deal with both the seller and buyer through their own company.
What should I do if I suspect lock-out?
Start by asking your agent specifically about the sale's progress and the REINS status. If things don't improve, reconsidering the listing agreement is also an option.
Summary
Agent lock-out is the practice of blocking inquiries from other companies to secure a double-sided commission, and it can work against the seller's interests. Regularly checking the REINS registration certificate, status, and reports on the sale's progress is something sellers can do to protect themselves.