Often, due to your status and inability to speak Korean, you feel like you're getting cheated out of your hard-earned money.  Paying your real estate agent is one of those things that you could easily be fooled into paying more if you don't know the rules and regulations that apply.

In Korea, there are guidelines to which real estate agents must adhere when charging commission on your new apartment.  Whether it's Jeonse (key money), monthly rent or a hybrid of the two, you will never be cheated out of your money if you know the rules set by the government.

So, here are the rules.

If you don't want to see the rules and want to get the amount fast, click here.

The commission that's due to your agent is calculated based on the amount of the transaction in terms of Jeonse (key money).  That is, whether you're paying monthly rent or hybrid, you always convert it into Jeonse equivalent to get the base transaction amount.

Case 1 - If you're paying monthly rent with initial deposit (key money)

Your Jeonse Equivalent = Monthly Rent x 100 + Initial Deposit

e.g. If you're paying 10mil won in key money and 900,000 won in monthly rent, your Jeonse equivalent will be: 900,000 x 100 + 10,000,000 = 100,000,000 won

Now, if your Jeonse Equivalent is calculated to be below 50,000,000 won using the above method, you are required to use a different formula.

Case 2 - If your Jeonse Equivalent calculated using the formula for Case 1 is below 50,000,000 won (50 M won)

Your Jeonse Equivalent = Monthly Rent x 70 + Initial Deposit

e.g. If you're paying 10,000,000 won (10 M won) in deposit and 300,000 won in monthly rent your Jeonse equivalent according to the Case 1's formula will be:

300,000 x 100 + 10,000,000 = 40,000,000 won

This is lower than the 50,000,000 won threshold, so you are now required to use a different formula.

300,000 x 70 + 10,000,000 = 21,000,000 won

Now that you have your Jeonse Equivalent, you can apply it to the below table.

Based on your Jeonse Equivalent, you can multiply the amount by the appropriate maximum % to get the commission.  If the commission calculated is lower than the maximum amount specified on the right of the max %, that is your commission due.

If the amount is higher than the max amount, your commission due will be the max amount and not the calculated amount.

Again, if you want to do without all the headache of understanding and applying the rules above, you should visit this link to calculate your commission.  Just enter in your initial deposit amount and your monthly rent and your Jeonse equivalent and the commission will be calculated for you.

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