SEOUL, Korea, Feb 26 (Korea Bizwire) – Mr. Lim, a 26-year-old college graduate who doesn’t want to reveal his full name, said he recently found a rental home through the Internet without paying the broker’s fee. As he is jobless and preparing for state exams, the real estate broker’s commission of 200,000 to 300,000 won was too much for him. His monthly living expenses are at most 600,000 won.
Upon discovering the world of direct home rental, he was elated. He could check the 360-degree view of the room and pictures uploaded by the landlord on the site. He could get some ideas about how meticulous the landlord is from the description. He even learned how to sign the lease contract without being disadvantaged from a fellow member of the site.
So many young single tenants in their 20s and 30s looking to rent rooms or small studios are flocking to direct home rental information sites. For example, an online cafe “Peter Pan’s How to Get a Good Room” has signed up more than 2 million members as of January this year, from a half million five years ago.
The number of daily visitors to this service is in excess of 200,000. Other similar services such as “Balpoom” and “Budongsan Moa” have attracted 290,000 and 660,000 members respectively.
The direct home rental market is expected to get bigger as millions of college students who are well versed in no-commission online services in their university websites leave the campus and become major customers to these commercial services.
Still, there is no free lunch in the world. Cho Eun-sang, senior manager with Real Estate Serve, a real estate information service provider, cautioned, “In some cases, you may lease a property with too much collateralized debt that doesn’t show up in the official registration.
In the worst-case scenario, you may fall for a fraudulent case in which someone poses as an owner and takes your deposit money and runs away.” In contrast, any rental transaction made through a certified real estate agent can be protected by law even after the contract is signed.
As the market for direct rental homes is growing, there is a persistent demand for laws and regulations designed to protect tenants who moved in to a home without a broker. But there is no attempt as yet by the government in this regard. Only one exception can be found in a scholarly journal article published by Dong-Eui University last year in which the author suggested introduction of a government-approved certification scheme, purchase of guarantee insurance policies, and an escrow scheme to protect both parties in contracts.