[What Do You Think]
Rising Housing Prices Lead to Soaring Brokerage Fees
Increased Burden on Sellers and Buyers... "System Needs Improvement"
Platforms Dramatically Lowering Brokerage Fees Spread
Frontline Agents Oppose... "Cutting Their Own Throat"
[Asia Economy Reporter Moon Jiwon] Online brokerage platforms offering 'half-price commissions' are quietly expanding their activities. Among sellers and buyers tired of brokerage fees amounting to millions of won, word of mouth is spreading, and the number of actual successful transactions is gradually increasing. While real estate prices are soaring, the brokerage commission rates linked to them show no signs of change, leading to an analysis that the market is creating its own breakthrough.
According to the real estate industry on the 24th, representative online platforms that have significantly lowered brokerage fees include Jiptos and Darwin Junggae. Darwin Junggae, launched in April last year, operates mainly in apartment complexes in Bundang, Seongnam, Suji, Yongin, and Gwanggyo, Suwon, and surpassed 4,000 housing listings in less than a year.
When a brokerage contract is concluded through this platform, the seller listing the house pays no commission, and the buyer pays only about 50% of the average commission. For houses under 600 million won, the commission rate is the same or slightly lower than the rate set by city and provincial ordinances in Gyeonggi Province, but the higher the price exceeds 600 million won, the greater the commission reduction.
Although the number of contracts is not yet large, actual user reviews are gradually appearing on real estate-related online communities. One netizen said, "I listed the property with the intention of saving on commission even if it took a little longer, and it was contracted within a few days," adding, "It's time for existing real estate agencies to change." A Darwin Junggae official said, "We plan to expand into the Seoul area by the end of this year."
In the case of Jiptos, on the other hand, only the homeowner pays a commission, and tenants do not pay any commission. Unlike Darwin Junggae, it operates mainly around university areas in Seoul, focusing on one-room and two-room units, where most tenants are students or young professionals. Even without a commission, the brokerage is conducted directly by licensed real estate agents, making it relatively safe. Since opening its service in 2017, Jiptos has registered over 54,000 listings.
These platforms operate on a 'low margin, high volume' model, earning profits by increasing the number of transactions even if revenue per transaction decreases. Therefore, the existing licensed real estate agent industry is on high alert. A representative agent in Busan said, "If the commission reduction competition intensifies, the quality of service will inevitably decline, causing harm to customers." A representative agent in Gangnam-gu, Seoul, said, "Although they claim to be innovative platforms, it's ultimately self-destructive."
However, many analyses point out that the problem lies in the originally excessively high brokerage commissions. For example, when trading a 1 billion won apartment in Seoul, the combined commission for buyer and seller can reach 10 to 18 million won, which is considered too high, and conflicts often arise during commission negotiations. In fact, the industry expects that with the revision of the Licensed Real Estate Agents Act next month, which requires commission negotiations at the contract drafting stage, such conflicts will intensify.
An official from the Licensed Real Estate Agents Association said, "Many agents are uneasy about the expansion of platforms offering half-price commissions," adding, "While there is some acceptance due to the competitive era, since most agents are sole proprietors, government-level institutional improvements are necessary."
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