Guidelines for Residential Real Estate Shopper

Real Estate Guideline in Korea

Types of Housing

It is estimated that 60% of foreign residents in Korea live in Yongsan-ku, Seoul, and a large proportion of the rest live in Bangbae-dong, Sungbuk-dong, Pyoochang-dong, Yeonhee-dong, and Kugi-dong. In these areas, many western-style residences have been built to meet the needs of the growing foreign population. Builders of housing units catering to westerners have broken away from the typical layout of a Korean built residence, where the entrance usually leads directly to a rectangular living space with bedrooms radiating from it, to accommodate the western-style floor plan, where corridors are much more prevalent.

Below are the standard types of residences that can be found throughout Korea: (Again, 1 pyong = 3.3058 square meters)

Houses

Houses are larger than villas and include a small to mid-sized garden. Houses vary in size from 50 pyong to 130 pyong living space, and from 100 to 250 pyong for the whole land area. Houses have 2-5 bedrooms and 1-3 baths. In recently built houses, oil heating has been replaced by a city gas system to reduce heating costs.

Villas

Villas are similar to western style condominiums, usually less than 5 stories high with under 10 units per building. Sizes of villas range from 40 pyong to as large as 110 pyong, with 2-5 bedrooms and 1-2 bathrooms. Most villas are not furnished, but some do come equipped with basic appliances such as a gas oven, refrigerator, dishwasher and washing machine.

  Apartments

  Apartments are usually in western style   high-rise building   complexes. They are   smaller than houses and villas, but an   apartment complex often includes a   supermarket, bakery,   laundromat and other   facilities. Basic appliances are   expected to be   furnished by the tenant.
  There are also residential suites in hotels   around Seoul such   as the Swiss Grand Hotel   and the Sheraton Walker Hill. The   layout is   similar to an apartment or condo, but has all   the conveniences of living in a hotel.

Payment Methods

Typically, housing rent in Seoul is higher than what you may have experienced before.

The most common payment method is to pay in advance for the entire lease period of the contract
An important note is that in Korea the size of a home is stated in gross area rather than net area.
As with most cities, the location as well as the year of construction of a unit plays an important role
on its rental price. Rental prices for expatriate populated areas such as Itaewon and UN Village are
less affected economic downturns and thus have remained more stable through the economic crisis

than have apartments of 30 pyong or more in other areas.
There are three kinds of payment methods for leasing a house.

　　1. Key money deposit, called Chonsei
　　　
　　　A deposit of about one-half or more of the house value is paid for the lease period.
　　　The whole portion is returned to the tenant after the expiration of the leasing
　　　contract. 10% of the total amount is paid up front when the contract is signed,
　　　and the rest is paid when the leasee moves into the unit. The usual real estate
　　　agent commission is 1% of the lease fee. The owner of the unit is responsible for 　　　
　　　maintenance and the cleanliness of the unit when the tenant moves in.

　　2. Monthly payment, called Wolsei

　　　This is a deposit plus a monthly payment system. The amount of the deposit is more
　　　than 10-20 times the monthly payment. As with Chonsei, 10% of the total amount is
　　　paid up front when signing the contract, and the remainder plus one month's rent is
　　　paid when the leasee moves into the unit. The deposit money is returned to the tenant
　　　after the expiration of the leasing contract. The real estate commission for Wolsei is
　　　usually 3% of the total rental. The tenant is responsible for maintenance (a building
　　　maintenance fee is charged to eahc unit on a monthly basis).

　　3. Rent

　　　This is the most common payment method among expatriates in Korea, hence it is more
　　　readily obtainable in residential areas that cater to foreign residents.

　　　An advanced payment of the total monthly rental fees for the entire lease period is
　　　paid without a deposit. When the contract is signed, 10% of the total money is paid by
　　　the tenant, and the rest of the payment is submitted when the tenant moves in. In
　　　contrast with the Chonsei and Wolsei methods, no deposit is returned at the end of the
　　　contract as no deposit was made.

　　　The owner of the unit is responsible for maintenance and cleanliness. The commission
　　　to a real estate agent is also 3%.

　　　Common practice is that rent for villas and houses is paid in advance for a lease of
　　　2-3 years, whereas the rent for an apartment is paid in won for a lease of 1-2 years.

E-mail : ks@korealty.com