✅ Roughly speaking
-🏠 Real estate brokerage can be started without inventory, but it is a "merit-to-performance" business where no brokerage fees are charged unless the deal is closed.
📉 Even if fixed costs are relatively small, if sales are cut off for several months, payments such as labor, office fees, and advertising fees will take the lead.
-📱 While the number of real estate agents is increasing, the gap between large and small businesses in advertising, digitalization, and customer acquisition is widening.
・⚠️ It is important to note that bankruptcy statistics include not only pure intermediary companies but also businesses that handle sales, rental management, etc.
Introduction
This time, we'll consider why real estate brokerage firms go bankrupt.
Regarding real estate brokerage, I think many people have the impression that "it's a job where you move properties from right to left and receive brokerage fees, so the fixed costs are small and it's less likely to go bankrupt."
In fact, if you're only going to brokerage, you don't need factories like manufacturing or commodity inventories like retail.
If you can run an office with a small number of people, avoid borrowing, and acquire projects primarily through referrals, it is possible to operate it with relatively low fixed costs.
Nevertheless, according to the Imperial Databank, there were 86 real estate agency and brokerage bankruptcies between January and August 2026.
If things continue at this pace, there will be around 130 cases in 2026, approaching the record high of 133 cases in 2025.
However, the number of bankruptcies in the same period last year was 87, which is one less in the same period in 2026.
Therefore, it seems appropriate to understand this as a continuation of the high levels seen in recent years, rather than "a sudden surge in bankruptcies in 2026."
These figures and aggregation conditions are Teikoku Databank's "Bankruptcy Trends in Real Estate Agency and Brokerage Businesses" You can check it here.
So why would a real estate brokerage firm that has no inventory and should be able to keep fixed costs down go bankrupt.
Real estate brokerage may have "low fixed costs" but not "stable returns"
Brokerage fees are only available after closing
The most distinctive feature of real estate brokerage is that sales are heavily dependent on the closing of transactions.
Simply listing a property does not usually result in any brokerage fees.
No matter how many times you show potential buyers, if a deal isn't ultimately signed, you won't make any sales from the deal.
The Ministry of Land, Infrastructure, Transport and Tourism also explains that there is a legal limit on the amount of brokerage fees that can be received from clients when a real estate transaction is concluded through the brokerage of a real estate agent.
Regarding the brokerage fee system, Ministry of Land, Infrastructure, Transport and Tourism Real Estate Transaction Information You can check it here.
Real estate transactions require a lot of work to reach a contract, including property inspections, advertising, handling inquiries, insider consultations, negotiating terms, reviewing key matters, and coordinating with financial institutions.
However, a deal may not go through due to a change in the prospective buyer's policy, the results of a mortgage review, or a disagreement with the seller.
From the perspective of the intermediary, if the case is not closed, they may not be able to fully recoup the time and expenses invested up to that point.
In other words, it seems more accurate to think of real estate brokerage as a business that recovers the costs of business activities that are not closed through brokerage fees for the closed cases, rather than as a "business without costs."
Brokerage fees are not freely increased
It's not as simple as simply increasing brokerage fees if sales are insufficient.
Under Article 46 of the Real Estate Transaction Business Act, there is a limit to the remuneration that real estate transaction companies can receive through intermediaries or agents.
The current notices and related materials are: Ministry of Land, Infrastructure, Transport and Tourism Real Estate Transaction Law related page It has been made public.
Of course, you can agree on specific fees within the limits.
However, this is not a business structure in which intermediary companies can freely pass on the increase in advertising and labor costs to prices.
In highly competitive regions, it is likely that receiving the legal limit may be practically difficult in some situations.
The real product is not "property information," but customer contact
If you look at real estate brokerage as "the business of moving properties from right to left," it seems like a very simple business.
However, nowadays, many property listings can be found directly by consumers on the internet.
Property information itself does not necessarily constitute a strong differentiating factor for intermediary companies.
For an intermediary, it's important to receive requests for mediation from owners considering selling, to be consulted by customers considering buying or renting, and to maintain trust until the deal is finalized.
In other words, the intermediary is competing not only with the property itself, but also with the points of contact between the seller, buyer, landlord and tenant.
To ensure contact with this customer, you will need a website, real estate information site, advertising, sales representatives, stores, referral networks, etc.
Completely cutting fixed costs will make your business easier, but at the same time, it may weaken your ability to acquire customers.
This is where I believe the difficulty lies in the real estate brokerage business.
Even if you start with low fixed costs, your fixed costs will increase as you grow
Increasing staffing levels will lead to monthly payments
While operating with one person or a small group, fixed costs can be kept quite low.
However, if you hire sales or administrative staff to increase sales, you will receive monthly payments such as salaries and social insurance contributions.
Brokerage fees are subject to the closing of the contract, but labor costs must be paid regardless of whether or not a closing is made.
As a result, an imbalance arises where sales are variable-cost, while expenditures are fixed-cost.
The more companies that adopted or opened stores based on the number of deals they signed during the boom period, the greater the impact of a decline in deals.
Real estate requires a certain business base
Real estate trading is not a business that can be started freely using only a computer and a mobile phone.
To obtain a license, you must meet the requirements of the firm, and each firm must have a dedicated real estate agent at a rate of at least one in five people engaged in the real estate business.
You will also need to deposit a business guarantee, or join a guarantee association and pay a contribution to the payment business guarantee.
Regarding these systems, Ministry of Land, Infrastructure, Transport and Tourism Shikoku Regional Development Bureau Real Estate Transaction Business License Application Guide You can check it here.
Therefore, even if it can be operated on a small scale, it is not a business that does not require complete equipment or personnel.
However, these institutional burdens alone will not lead to bankruptcy, and it is thought that the burden of cash flow will increase due to the overlap of labor costs and advertising expenses resulting from the expansion of the business.
The continued increase in real estate agents is also important
Looking at the number of bankruptcies alone, it appears that the real estate brokerage market itself is shrinking.
However, according to the Ministry of Land, Infrastructure, Transport and Tourism, the number of real estate transaction businesses as of the end of March 2025 was 132,291, an increase of 1,708 businesses from the previous fiscal year, a 1.3% increase.
This marks the 11th consecutive year that the number of real estate agents has increased.
This number is Ministry of Land, Infrastructure, Transport and Tourism's FY2024 Real Estate Transaction Business Act Enforcement Status Survey It has been made public.
In other words, while bankruptcies remain at a high level, new businesses are also entering the market.
The more companies that enter the market, the more competition there will be for the same region, the same customer base, and the same properties.
The Teikoku Databank analyzes that a certain degree of selection is progressing due to increased competition resulting from the rise in new entrants.
Furthermore, the report points out that the gap in customer acquisition capabilities may be widening between large intermediary companies that utilize online insider knowledge, artificial intelligence, and AI (Artificial Intelligence), and small and medium-sized businesses that find it difficult to invest in digital transformation and digital transformation (DX).
This analysis also Imperial Databank survey It is listed there.
Companies that keep fixed costs down are not necessarily weak.
Companies with strong local referral networks, expertise in specific property areas, and ongoing consultation with existing clients may be able to operate without extensive advertising.
On the other hand, if companies that do not have referral networks or their own customer acquisition channels cut advertising costs, it becomes difficult for them to even acquire new deals.
The idea that "if we cut fixed costs, we won't go bankrupt" implicitly assumes that cases will continue to come in.
Don't think of bankruptcy statistics as "purely brokerage bankruptcies."
When reading these statistics, you should also pay attention to the items being compiled.
According to the Imperial Databank, "real estate agency and brokerage" includes businesses that buy and sell land and buildings, and rent and broker rental apartments and rental properties, as well as management.
Therefore, it cannot be concluded that all 86 bankruptcies listed were purely intermediary-only businesses with no inventory.
Businesses that acquire and resell properties in-house require input funds and borrowings.
If you manage rentals or engage in related businesses, you may incur different costs and contractual liabilities than if you were a full-time broker.
In fact, the total debt from bankruptcies from January to August 2026 was approximately 7.983 billion yen, and there were five bankruptcies with debts of 500 million yen or more.
On the other hand, there were 60 bankruptcies with debts of less than 50 million yen, accounting for 69.8% of the total.
These numbers are Teikoku Databank Bankruptcy Trends Survey It is by.
The results show that there are many bankruptcies among small businesses, but also a mix of businesses with relatively large debts.
I think we should be cautious about understanding from the article's headline alone that "intermediary companies that lack inventory are going bankrupt one after another."
How to look at the figure of "86 bankruptcies"
The Imperial Data Bank's latest tally is bankruptcies with debts of over 10 million yen that have been legally settled.
This does not include all companies that have gone out of business, have ceased operations, or whose debt levels do not meet the criteria.
Furthermore, the number of real estate agents in the Ministry of Land, Infrastructure, Transport and Tourism and the number of bankruptcies in the Imperial Data Bank differ in scope and aggregation period.
Therefore, it is not appropriate to simply divide 86 cases by the number of real estate agents, 132,291, to arrive at the "bankruptcy rate."
However, in relation to the overall number of businesses, it seems more natural to assume that a certain number of businesses with weak customer acquisition and financial resources are leaving the market as it continues to enter, rather than the real estate brokerage industry as a whole facing difficulties in survival.
High levels of bankruptcies are not necessarily the same as an industry-wide recession.
Teikoku Databank also points out that while the income of major real estate management and brokerage firms is increasing across the capital region, financial strength and external PR power are key to business continuity.
In the same real estate brokerage business, it seems that there are both large companies that are doing well and small and medium-sized businesses that are struggling to acquire deals.
What is needed for a brokerage firm that is unlikely to go bankrupt
The view that real estate brokerage can operate at low fixed costs is not wrong.
If you don't have inventory, borrow less, and operate with a small number of people, you can lower your break-even point.
However, for that to be possible, a system is needed that allows for the continuous acquisition of projects at a low cost.
For example, the following management foundation can be considered:
- Ongoing referrals from past customers and experts
- Having different knowledge and experience than other companies in a particular region or property field
- Properly distributing revenue sources without relying solely on trading intermediaries
- Don't rush to hire or open stores, assuming sales during boom times
- Securing funds that can continue to be paid even if there are no agreements for several months
- Not only reduce advertising costs, but also have your own unique customer acquisition channels
However, if you go into buying, reselling, managing, subleasing, etc. in order to spread out your revenue streams, you will also incur new financial burdens and risks.
Diversifying your business doesn't always increase safety.
The management risks are likely to vary greatly depending on whether the company maintains its agility as a full-time intermediary or invests capital to expand its business.
Summary
Real estate brokerage is certainly a business that can be started with relatively little equipment and inventory.
If we can maintain a single-person management, no borrowing, no inventory, and referral-based structure, it seems possible to significantly reduce the risk of bankruptcy.
However, small fixed costs and stable sales are two different issues.
Brokerage fees are only earned once the transaction is completed, while the costs and time required to acquire customers and deal with them before the contract is finalized are incurred first.
Furthermore, as the number of real estate agents increases, the gap between large companies and small and medium-sized businesses in advertising, digitalization, and customer acquisition capabilities is widening.
The reason real estate brokerage firms go bankrupt cannot be explained in one word: "high fixed costs."
Rather, the fundamental problem lies in the fact that prior expenditures become heavier and funds run out, relative to the timing and certainty of sales.
What appears to be the property listings that real estate agencies are shifting from right to left.
I think what really determines the survival of a company is whether it can maintain a continuous and profitable connection with the people who want to sell or buy the property.
Comment