Korean Job Discussion Forums

[ricky_lamour]

Me and my wife are looking for an apartment this week. She was born here but left a long time ago so really has no more of a clue about what is going on than I do. So although she can talk to these estate agents (who I have never trusted no matter what their favorite food is) we are not sure what to do.

We've been offered a fantastic place just where we want to be. But the way they want to do it is with a 40,000,000 won down payment. Which is no problem for us to get. And the deal is then there will be no rent to pay. So the money will work harder than it will be sitting in our English bank account. The problem is we worked damn hard for that money and, although I believe it is common practise to rent property like this in Korea, it is very worrying considering how little confidence people on this forum have in Korean businessmen.

Any thoughts?

[kprrok]

Just make sure that the lease agreement with the owner is registered at the dong office and the deposit will be government "insured." They have to pay it back or you get the property in liens or some other compensation.

KPRROK

[ricky_lamour]

Maybe I can get some sleep now. Been having cold sweats for a couple of nights now.

[KumaraKitty]

We got a brand new 37pyeong Apart-tel for 50,000,000won down and 400,000won a month. We made sure everything was registered and done with the help of my husband's father's friend(his father lives in the US). The agent walked us through everything and the friend double checked everything. Just make sure you check all the details, 40,000,000won down and no payments for your year is pretty low, but I guess it varies by area. Our building is 90,000,000won to 137,000,000won for a year.
2 things we ran into, 1. The agent's fee-the contract had it typed up as 800,000won! That was crazy high, but we didn't notice that at first(he skimmed over that explanation!) We called in the friend again, and he yelled him down to 400,000won. They say that they take a % of your total apartment cost as their fee, but really, they will take whatever you can negotiate. We didn't know this, so try and do it up front, like 200,000won perhaps.
2. If we fail to pay rent (not sure if it said on-time or at all!) 2 months in a row, we lose our entire 50,000,000won! So be very careful about paying!!
Other than that, good luck!

[VirginIslander]

What happens if the landowner looses all of his or her money, or your money.

Who covers it? Is it the government? A bank?

And what percentage of your key money will be covered?

[KumaraKitty]

The way it was explained to me is we would get to sell the apartment to recover our costs. Not sure where the rest of the money would go, but we are safe. Considering how many millions of people in this country do this every day, I'm not too concerned.

[Drew345]

Just keep in mind that the reason the apartment owner needs the money in cash up front is because he already owes the money to someone else (the renters who were there before you).
The reason he owes them that money is because he lost their original deposit due to mismanageing his funds.
So you are giving a large amount of money to a Korean who is deep in debt and really bad at managing money.

It is a risk versus reward payoff. You can get rent free (great reward), buy risking a large amount of money.

[Cheonmunka]

There is also paperwork that the agent I think or the Dong office digs up for you about moneys owing not just on that house but also with the owners other debt/assets liabilities. Our agent gets 300.000 for a 50 to 60 miilion deal. My father in law is an agent. He doesn't earn that much. Don't pay 800.000. Don't do that. And register with the local Dong office of that location if you are happy that the owner doesn't have a lot of debt.

Also, above about chonsei. Some use it as a deposit for a house hoping for capital gain. There might be 6 places chonsei'd at say 50 mill each. He/She might buy the house for 400 mill. So, he or she just fronts up with 100 mill of own money + the 300 chonsei money at the bank to buy the place. When someone moves the new tenant pays the owner to pay the ex-tenant. Owner makes up any shortfalls. Owner usually manages a capital gain. Makes sense right?

[ricky_lamour]

Wow,
lots of really in depth advice. And most of it makes a lot of sense. The other thing that makes this deal particularly unpleasant is that the apartments are company owned (by Ju-Gong whoever they are). The agent didn't mention this and also we found out that the apartments are only allowed to be occupied by the owner. So we would be renting from a tenant. Its sounding more and more suspicious by the minute.

[Thunndarr]

[ricky_lamour]

To be honest, and maybe its just because the landlord we left in London tried to screw us out of our deposit for no reason at all, I just don't trust businessmen/owners/passers-by/you/my mother etc. any more. I think we will buy a tent and line the matress with our money instead.

[ricky_lamour]

Or take the log cabin/villa in the hills that we went to see today. My quality of life has just skyrocketed since I left England.

[Ya-ta Boy]

[Damulgun]

This is what you call Jhun-Sae.

Huge down payment where the owner keeps it as collateral for the housing. You pay little monthly rent.

[ricky_lamour]

I think its a great way of doing business. Both parties get something out of the deal - they get collateral, and we save money than a bank could ever give us. I think also however that anyone else going through this should be wary of the agent, check all references and credit histories, take your time to work out if you fully trust the person. If they rush you like ours did "I need the initial deposit today..." "if you don't give it to me I will show the flat to others..." then walk away and find someone who is not likely to dump on you later. I'm glad I did.