Types of Residences in South Korea
Detached Houses, Apartments, Officetel, Multi-generational/Multi-family homes, etc.
Home purchase and rental agreements
- Purchasing a house
- When purchasing a home, you should carefully consider the location, positioning, access to transportation, and the neighborhood environment. After deciding to buy a home, you should request a certified copy of the real estate registration — which shows ownership, mortgage, fixed collateral for the building, and so forth — to avoid any possible deception or damages. When making a contract for the purchase of a home, both parties must provide accurate information to avoid being disadvantaged.
- Jeonse (key money)
- The Jeonse system is unique to Korea. It requires the renter to make a large initial deposit in advance and the whole amount is returned after the rental contract has finished. You can rent an entire house or apartment, or you can rent a smaller space (one floor, or one or two rooms). If you rent a whole house or apartment, the deposit is usually between 40 and 80 percent of the value of the house. A jeonse contract is usually made for 2 years. (Officetels are generally contracted for 1 year.) Landlords are not allowed to terminate the contract within two years unless the tenant wishes to do so. In other words, according to the Housing Lease Protection Act, even a one-year contract can be used for two years if the tenant wishes.
- Weolse (Monthly rent)
- Weolse is a rental system which combines a modest deposit with monthly rent. When renting a space of the same size, the weolse deposit is much cheaper than Jeonse deposit. The amount of the deposit and monthly fee can be negotiated with the landlord before signing the contract. If you increase the deposit, the monthly fee will be lower, and if you lower the deposit, the monthly fee will be higher. The monthly rent varies depending on the total size, number of rooms, and facilities. The tenant is responsible to pay utility charges (electricity, water, gas, telephone, internet, TV, etc.), which are not included in the Jeonse or Weolse. Furniture and home appliances are not included in most rentals, so you have to provide them yourself. But in the case of multi-family units or officetels, there are many places that provide basic home appliances such as refrigerators and washing machines.
- Important Considerations when Purchasing a Home
- The typical way to find a home in Korea is through a real estate agency. The real estate agent can check the matters that need to be confirmed, prepare the necessary documents when signing a contract, and make safe transactions involving legal issues and such. If you use a real estate agent, you have to pay a statutory fee based on the housing price, but you can check online in advance to find out what the standard brokerage fee is.
- The current real estate brokerage fee is set based on the transaction price. If a realtor requests an excess brokerage fee, you can report it to the Investigative Center for Illegal Brokerage in your city or district.
Guide to Global Real Estate Agencies for Foreigners
|Name of the Agency
|Seongsim Real Estate Agency
|43, Jungnibuk-ro, Daedeok-gu, Daejeon, South Korea
|Hyoseong Real Estate Agency
|#108 Apt. complex, 11, Dosan-ro, Seo-gu, Daejeon, South Korea
|Ree, Lin Ja
|대전 서구 도산로 11, 상가 108호 (도마동, 효성타운)
|Deongmyeong1st Real Estate Agency
|156-17, Hakhaseo-ro, Yuseong-gu, Daejeon, South Korea
|Kim, Boo Jin
|대전 유성구 학하서로 156-17 (덕명동)
Brokerage Fee Rates for Housing Contracts
|Type of contract
|Contract Payment Range
|Purchase and exchange
|Under 50 million won
|50 million won ~ 200 million won
|200 million ~ 600 million won
|600 million won ~900 million won
|under negotiation within 9/1000
|Under 50 million won
|50 million won ~100 million won
|100 million won ~ 300 million won
|300 million won ~ 600 million won
|under negotiation within 8/1000
- The brokerage fee is determined by multiplying the transaction amount by the fee rate. However, there is a limit to the total fee that can be charged, so if the total exceeds the limit, you only have to pay the maximum fee.
- Before signing a rental contract, you should check the legal ownership rights on the land register, which shows the collateral provisions for the seizure of the building and so forth (ex: receivables, debt, loans), and have it verified by an independent arbitrator. If you use a real estate agent, the agent provides the tenant with supporting data, such as certified copies of the registration, before signing a contract. If the agent does not provide this information and it results in damage to the tenant, the agent must compensate the tenant for the loss by law, so checking the property ownership is routine.
- After confirming that there are no abnormalities in the legal relationship, the lease agreement can be concluded. Before signing the contract, you can negotiate the details with the lessor (contract period, conditions for early cancellation, etc.) and clearly record the details of the lease agreement in writing on the contract. Sign and date the contract and keep one copy of the contract per party.
- At the time of signing the contract, the amount of the down payment and the due date and method of paying the remaining balance is negotiated and recorded in the contract. Typically, the down payment is 10% of the total contract with the balance due at the time of moving in. The real estate agent's commission can be negotiated and determined at this time.
- The Period of Lease
- The lease of real estate is normally 2 years to protect the renter. However, if both parties agree, a period of less than 2 years can be contracted.
- The Period of Lease
In Korea, moving companies have relocation packages that provide complete service, from supplying the packing boxes, packing your belongings, to the actual transporting of your possessions and even unpacking for you. It is interesting to note that packing yourself is not necessarily cheaper than having the moving company pack for you. Contact several moving companies and get estimates before choosing a company. The companies will send a representative to your home to determine the size of your consignment and give you an estimate. Once you select a company, you will be required to sign a contract and pay a deposit. As always, you should verify the clauses in the contract before signing to ascertain the claim process, should any loss or damage incur during the transportation of your goods on moving day. Evidence of damage or loss will be helpful when filing for compensation, so pay close attention to the moving process.
- Things to do after moving
- Be sure to notify the immigration office of your change of address (for citizens, this can be done at your local community [dong] office, or if you are an “F” visa holder, at your local district [gu] office), so your sojourn particulars may be amended on your alien registration card (ARC).
- Take along your ARC and your rental contract to show the officer in charge, who will update your information in their computer system and write your new address on the back of your ARC.
- Fixed Date: The fixed date refers to the date on the lease contract that has been verified by an authorized institution as the date that the contact came into existence. You need to have a registered fixed date because you might need it to claim your deposit as a preferential payment if the house is sold by auction or delinquency disposition.