"Blocking Joint Brokerage and Trying to Lower Commissions?"... Growing Backlash from the Brokerage Industry

Fine of 5 Million Won for False Advertising by Licensed Realtors
Collective Backlash...Regulations Overused Without Considering Industry Characteristics
Conflicts Over Commission Reform... "Shifting Policy Failures"
Ministry of Land, Infrastructure and Transport to Take Strict Action... "Investigation into Collusion"

After the real estate measures, as jeonse prices rose and jeonse listings disappeared, the real estate listings at a real estate agency in an apartment in Songpa-gu, Seoul are completely empty. Photo by Kim Hyunmin kimhyun81@

[Asia Economy Reporter Moon Jiwon] Opposition is spreading among frontline real estate brokerage industry over the government's plan to strengthen penalties for false real estate advertisements and to consider lowering brokerage commission rates. Some certified real estate agents in certain areas are even taking collective action, such as temporarily removing online advertisements. While the government states it will strictly respond to illegal activities by brokers to protect 'consumer rights,' some critics argue that the government is trying to shift the blame for policy failures onto the brokerage industry.

According to frontline real estate brokers on the 27th, since the amendment to the Certified Real Estate Agent Act, which imposes fines up to 5 million KRW for posting false listings online, was enforced on the 21st, voices of concern about restrictions on business activities have been growing among brokers.

Currently, in the real estate sales and lease market, when a property is listed at one brokerage office, nearby offices often post advertisements together for 'joint brokerage,' but this regulation has made joint brokerage difficult, they explain.

A representative from A Certified Real Estate Office in Sunae-dong, Bundang New Town (hereafter referred to as Certified) said, "For example, if a 10th-floor unit is listed at one brokerage office, other offices would post ads for the 8th or 12th floors for security reasons to conduct joint brokerage, but now all of these are subject to fines," adding, "In effect, the government is blocking our business."

There is also much criticism that the government ignores the nature of brokers' work and applies overly strict standards for false listings. The head of B Certified in Jeongja-dong nearby said, "Unless the client notifies whether a transaction has been completed after listing with multiple brokerage offices, brokers cannot know, so unintentional false listings may occur."

As dissatisfaction grows, some brokerage offices in the Bundang area have decided to remove all online advertisements in protest against government policies. The head of C Certified in this area said, "Due to the government's strengthened penalty regulations, advertising business of frontline brokerage offices has been shrinking," and "This is also a reason why the number of listings on major property sites has decreased since the law was enforced."

However, the government is increasing pressure, warning that brokers' suspension of online advertisements could also be considered collusion. A Ministry of Land, Infrastructure and Transport official said, "Through on-site inspections currently underway in Seoul and Gyeonggi areas, we plan to check for collusion in brokers' display advertisements as well."

There is also growing opposition among frontline brokers regarding the reform of brokerage commissions. Although no concrete plan has been announced yet, since Minister Kim Hyun-mi of the Ministry of Land, Infrastructure and Transport recently stated in the National Assembly that she would consider improving the current commission system, it is expected that full discussions will begin soon.

Given the sharp rise in apartment prices in recent years and the increased burden on consumers, the industry expects that lowering the maximum commission rate and reducing the gap between transaction price brackets will be the likely measures.

On social networking services (SNS) where certified real estate agents gather, complaints are pouring in that "the government raised housing prices but is trying to shift the blame for policy failures onto brokers." They argue that with successive government regulations reducing listings and worsening brokerage conditions, now even their livelihoods are being squeezed.

Especially brokers in provinces where apartment prices are relatively low are more sensitive to fines and commission rates. D Certified in Seowon-gu, Cheongju, Chungbuk, lamented, "I paid for advertising myself, but if a customer asks about direction, area, maintenance fees, etc., and reports it as a false listing, I could be fined," adding, "Here, even if you barely sell one apartment, the brokerage fee is only about 1.2 million KRW."

In response, a Ministry of Land, Infrastructure and Transport official said, "Commissions are linked to the brokerage industry, so it is not an issue that can be approached easily," but added, "We are continuously monitoring the market situation to see if there are any problems."

This content was produced with the assistance of AI translation services.