"Brokerage Fees Still High Even When Lowered"... 'Half of Half Price' Brokerage Emerges Amid Public Backlash

Brokerage Fees Halved Starting October
But Consumers Still Complain "Too Expensive"
Some Brokerage Platforms Claim "Half of Half Price"
Brokerage Fee Reduction Competition Intensifies... Brokers Push Back

A commercial area densely populated with real estate agencies in Seoul
[Image source=Yonhap News]

Starting next month, the maximum commission rates that licensed real estate agents can charge will be lowered, but consumers are increasingly voicing that the rates should be reduced even further. Some real estate brokerage platforms are planning to implement their own commission rates that are cheaper than the government's revised plan, signaling the beginning of a competition to lower brokerage fees.

According to the Ministry of Land, Infrastructure and Transport (MOLIT) on the 4th, the government recently announced a draft amendment to the Enforcement Rules of the Licensed Real Estate Agents Act to lower the maximum commission rates for sales transactions over 600 million KRW and lease transactions over 300 million KRW. MOLIT plans to collect public opinions until the 16th and implement the changes starting early next month.

Reviewing the amendment, the maximum commission rates will be reduced by 0.1 to 0.4 percentage points compared to the current rates. For sales, transactions under 600 million KRW will maintain the current rates, but the 600 million to 900 million KRW range will decrease from 0.5% to 0.4%. For transactions over 900 million KRW, the current 0.9% rate will be replaced with a tiered system: 0.5% for 900 million to 1.2 billion KRW, 0.6% for 1.2 billion to 1.5 billion KRW, and 0.7% for amounts over 1.5 billion KRW. For example, the maximum commission on a 900 million KRW home sale will drop from 8.1 million KRW to 4.5 million KRW.

However, many consumers still perceive this as a significant burden. They explain that even with some rate reductions, the excessive rise in housing prices diminishes the effect of the commission cuts. A tenant living in Yeongdeungpo-gu, Seoul, said, "The agents' work remains the same, but it's hard to understand why the brokerage fee burden keeps increasing along with rising house prices." It is also pointed out that since commissions only decrease for homes priced over 600 million KRW or lease deposits over 300 million KRW, the brokerage fee burden remains similar in areas outside some high-priced districts in the metropolitan area.

In this context, some real estate platforms are pushing for commissions at 'half of half price.' 'Darwin Junggae' announced that it will implement its own commission rates, which are up to half the price of the MOLIT's revised fee structure, starting from the 1st of next month. Darwin Junggae is a platform that promotes zero commission when listing a property and half commission when searching for a home.

Applying Darwin Junggae's own rates, the commission for a 1.5 billion KRW apartment would be reduced from MOLIT's revised fee of 10.5 million KRW to half that amount, 5.25 million KRW. Darwin Junggae explained, "Since the commission rates are significantly lowered, we will introduce a fixed-rate system to alleviate difficulties faced by agents."

However, frontline licensed real estate agents are strongly resisting both the government's commission reform plan and some platforms' 'half of half price commission' policies, raising concerns about potential conflicts in the future. The Korea Association of Licensed Real Estate Agents is preparing for a full-scale government protest against the reform plan. An association official said, "The backlash from frontline agents is very strong," and added, "We will soon prepare and announce countermeasures."

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