To enhance professionalism and improve service
Brokerage industry needs to be advanced and expanded
Mandatory signing with affiliated broker
"Provide alternatives such as replacement of company employees"
There are criticisms that the current 'Certified Real Estate Brokerage Act' provision, which requires real estate brokers, who are the representatives of real estate brokerage firms, to take responsibility for all transactions, is acting as an obstacle to the enlargement of real estate brokerage firms. The government and experts recognize that real estate brokerage firms need to enlarge in order to develop the real estate industry, but these institutional problems make it difficult for them to enlarge.
Current Real Estate Brokerage Act
25Joe and
26According to the article, "In relation to the confirmation and explanation of the brokerage object, a licensed real estate agent (in the case of a corporation, the representative, in the case of a branch office of a corporation, the person in charge of the branch office) shall sign and stamp, but if there is an affiliated licensed real estate agent who performed the brokerage act, the affiliated licensed real estate agent shall also sign and stamp." In short, this means that a licensed real estate agent who is the representative of the brokerage firm must be present for all transactions.
Due to such legal provisions, a situation has arisen where brokerage firms are unable to expand their business scale even if they want to. Even if licensed brokers belonging to a brokerage firm try to close several transactions and sign contracts in a day, it is impossible for the representative of a licensed brokerage firm to visit each transaction location and stamp the contracts one by one.
“There are times when transactions coincidentally happen to happen at the same time,” said Ryu Gwan-ha, CEO of Remax Gold Asset, who operates an office near Gangnam Station in Seoul. “In these cases, we have no choice but to give up one side or postpone the schedule.” He continued, “Even if there are a lot of people in the office, the work structure does not increase, and as a result, it becomes a factor that hinders expansion.”
| | Real estate agencies are densely packed in an apartment complex in Banpo, Seoul. /Seoul Economic DailyDB |
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There are also criticisms that placing excessive responsibility on licensed real estate agents is a factor that reduces the capabilities of individual licensed real estate agents. “Unlike lawyers or tax accountants who can take responsibility for and perform related work if they have a license, licensed real estate agents are not allowed to perform their roles even if they have a license if they do not open a business,” he said. “As a result, the professionalism and sense of responsibility of the licensed real estate agents are decreasing.”
Experts agree that in order to advance the real estate brokerage industry, which is currently at the level of a hole-in-the-wall shop, brokerage corporations need to become larger. This is because the number of consumers who are suffering damages due to brokerage firms' lack of expertise and poor service is increasing.
According to the Korea Real Estate Brokers Association, the average amount of compensation paid by the association for accidents that occurred during brokerage over the past five years is
87It amounts to 100 million won. Jang Jin-taek, director of Remax Korea, said, “The benefit that consumers can enjoy through the enlargement of brokerage corporations is that they can receive systematic services from more specialized brokers,” and “A significant portion of the brokerage accidents that are currently occurring can be reduced.” Sim Gyo-eon, a professor of real estate studies at Konkuk University, also expressed his opinion, saying, “In order to increase the professionalism and reliability of the brokerage industry, large-scale corporations are necessary.”
The government is also aware of this problem. Kim Sang-seok, director of the real estate industry division at the Ministry of Land, Infrastructure and Transport, said, “We know that as the current legal provisions go, the larger the brokerage firm, the more difficult it will be to process business,” and “We are thinking of finding alternatives, such as allowing brokerage firm representatives to attend all transactions instead of using the company’s official seal.”
/Reporter Ko Byeong-gi
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