Imagine that you go searching for housing in Korea. You look on Craigslist, and you see a posting from a real estate agent who says he could save you 50% off of a house listing. What would you think?
Is this an apartment that normally rented for 1,000,000 won per month, and he would get it for you for 500,000 won?
Or is this a place that normally rents for 500,000 won per month, but he marked up the listing to 1,000,000 won?
It’s hard to know, but these situations come up in real estate listings all the time. Raise your hand if you’ve ever seen:
“Up to 70% off of the listing price!”
“No contract or real estate fees!”
“Save money and cut out the brokers!”
If you see these statements or claims, you should definitely be weary. Potential red flags!
It’s not that good deals don’t exist (they definitely do!). It’s that a lot of the ads and postings you see are hype, designed to make you think you’re getting a great deal.
The smoking hot deals are out there, if you know what to look for.
Below are 7 common mistakes that people make when searching for housing in Korea. Most of them apply to people who are searching using real estate agents. Generally, using agents is the best and safest way to find Korean housing. There are exceptions, such as “my aunt is the building owner” or “my best friend is subletting her place to me for a few months.” When entering into a Korean housing rental agreement, there is a lot of money is at stake, so follow Mom’s advice of “better to be safe than sorry!”
Assuming All Landlords Will Take You
This is definitely not the case in Korea! Your real estate agent should do the screening for landlords before you view apartments, but sometimes there are misunderstandings. It may happen where you visit a house, and the landlord won’t want to show you the place. It could be because of your gender (some places are female only), your nationality, language ability, or anything else the landlord decides.
Even if the landlord does let you see the apartment, you’re not out of the woods yet! He may still decide to not rent for you for any number of reasons! Make yourself the best possible tenant candidate by doing things like getting a bank account in Korea, having a clear explanation of your job or where your income comes from, and knowing some basic Korean.
Standard Agent Commissions
You know those friendly English-speaking real estate agents that seem happy to help expats coming to Korea? The reason they are focused on expats is because they know they can get away with charging a premium! They view their English-speaking ability as an added benefit, so they think they should be able to charge more.
Also, most expats don’t know that there is a housing contract set commission. This is the amount you should be paying for the housing contract, and no more! Koreans never pay above this amount. However, expats can be taken advantage of, so it’s best to make sure you know the commission structure before going hunting for housing in Korea. The commission chart can be found in the Your Ultimate Apartment free guide.
Deposit Without a Contract
This is a bad idea. If you’re going to hand over your hard earned cash, make sure it’s legally protected by the law. There are postings on the internet all the time about “no contract” , “no deposit”, and “no brokerage fee” required.
Be very weary of this. If they’re offering you these terms, likely they’re overcharging you in other areas. There is no magic to the housing rental business. Understanding value and having the best information is the winning combination.
Not Researching Neighborhoods
This is especially important if you want to find great housing in Korea! Many people look in the popular areas, which are usually the more expensive spots to find apartments. It pays to take a look at what kind of lifestyle you want in Korea, and then find housing that supports that.
This doesn’t mean you have to give up your dream location, either. It’s amazing to see the differences in housing when you go a few streets in other directions. You may find yourself closer to a park, subway station, or a supermarket. If you could find a better deal on an apartment AND it’s in a better location for you, then it’s a double win.
Using the First Real Estate Agent
Often times the first places that a real estate agent shows you are the worst choices. They are the places that have been on the market the longest because people don’t want them. Also, the agent is likely showing you places that the landlord has agreed to list with that particular agent. That means that if you sign the contract, the real estate agent gets paid from both you and the landlord.
If you are shopping different real estate agents, you’re going to have much better options. Different agents have relationships with various landlords, so you’re going to see places that may not appear in the databases yet.
Also the agents will be forced to step up their game and show you places that meet your requirements, even if they aren’t listed by that agent. Your agent will get commission from only one side (you), but he’ll be happy to make the sale!
Using Only English-Speaking Agents
Compared to the total number of real estate agents out there, the English-speaking agents are a very small percentage. By only working with the ones who speak English, you’re limiting the number of places you can see. Even if you don’t speak Korean, you can use the worksheets in the free Your Ultimate Apartment guide to help bridge the language gap.
Assuming Your Deposit Is Safe
This is definitely not the case. In Korea, most places require a very large housing deposit. On the lower end, we’re talking 5,000,000 – 10,000,000 won. Just because you enter into a contract, it doesn’t mean your deposit money is safe.
Your real estate agent should do a due diligence check to make sure the financial profile of the property is in good shape. This is why it’s critical that you have a competent and professional agent.
There you have it! These are the 7 potential pitfalls that trip people up. As long as you avoid these, you have a good chance to find a fantastic deal.
The best way to protect yourself is by being knowledgable about the whole Korean housing system. Take your time, learn the rules, and ask lots of questions. The agents will often try to pressure you in order to get a sale. Politely but firmly stand your ground and don’t make a move until you are ready.
If you need further help, we have a paid full Your Ultimate Apartment guide that covers everything in detail about the housing process and system in Korea. You could also ask us about a consultation if you want someone in your corner to ensure a smooth and worry-free housing search. Give us a shout and let us know how we can help!
Happy Korean house hunting!
