Real Estate Agents, Korea
Real Estate agents, called budongsan junggaesa (부동산 or 공인중개사), are located in almost every neighbourhood throughout the country. They mainly act as a mediator between the property owner and the renter/buyer. Not all agents are used to working with foreign clients, whereas others specialise in them. Bearing in mind that you have to ask questions of all agents and be aware of the differences in housing here compared to other countries in which you've lived, working with the former is not necessarily a disadvantage. In fact, in some instances, they may be the best options. You'll want to work with more than one agent even in the same area of the city - they will each show you different places and even if you go to the same place, the rent quoted may be different.
It is sometimes difficult to find agents who speak English, but most agencies in areas in which foreign nationals tend to live have at least one English-speaker on staff (level of fluency will vary). Seoul City has prepared a list of real estate agents who speak English but the list is far from exhaustive and does not ensure that those on it will operate in an honest and/or transparent manner with expats. It also does not include agencies with a number of fluent English speakers.
As in most countries, real estate agents in Korea operate on a commission basis. The difference here is that the property owner is more likely to be the repeat customer and the tenant is more likely to be in the country for a limited time only. The realtor collects a commission from both the renter and the owner (about 0.3% to 0.8% of the rent rate or 1% of the purchase price). There is a formula you can use to calculate the realtor's fee (the calculation is based on the total of the downpayment + montly rent x 100):*
Below W50million - the fee is 0.5% (maximum W200,000)
From W50million to W100million - the fee is 0.4% (maximum W300,000)
From W100million to W300million- the fee is 0.3% (no maximum specified)
From W300million to W600million- the fee is 0.4% (no maximum specified)
Over W600million - the fee is usually negotiated, cannot be more than 0.8%
*The above commission rates of 0.5%, 0.4%, 0.3%, 0.4% are maximum rates. They can be lower per agreement between the property owner and the tenant. That said, the maximum is what is generally paid.
Before you make your final decision, find out what the agent's commission will be and whether or not it is shared between the property owner and you. In some circumstances (officetels, etc.) the tenant pays the entire commission.
Rental rates are not always posted and the only information you receive is often from the realtor, who has an interest in getting the highest amount possible. Some have been known to inflate the price at the beginning in order to appear to have arranged a good deal when in fact they’ve arrived at the owner’s original price. When possible, it doesn’t hurt to consult more than one realtor since they tend to show places for which they have exclusive listings or on which they don’t have to share the commission with another realtor. Some will only be aware of what's available in a specific neighbourhood or area.
The lease is generally between the property owner and the tenant, with the agent acting more as a matchmaker. Most reputable realtors will continue to act as a liaison between the foreign tenant and the property owner during the life of the lease. To avoid misunderstandings due to language or other differences, get everything in writing and ask questions about everything, taking nothing for granted.
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Last Updated on 2017-07-05
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