More S.Koreans buy, sell homes online without realtors

South Korea’s top online flea market Danggeun Market and other platforms are growing more popular for property deals as home sellers look for larger pools of buyers amid sluggish demand while cutting costs by avoiding real estate agent commissions.

Last month, 2,830 apartments in Korea were traded without real estate agents, accounting for 20.6% of the total 13,731 transactions, The Korea Economic Daily’s analysis of government data showed on Monday. That compares with only 14% a year earlier and 16.9% in October.

In Seoul, apartment transactions without agents made up 32.6% of all deals last month, far higher than the 12% to 14% in the August-October period.

That came as more homeowners scramble to sell their homes at lower costs with apartment prices forecast to fall the most since the 1997-98 Asian financial crisis. Apartment prices slid 1.6% in the first 11 months of the year, the largest decline since a 13.6% tumble in 1998, according to the country's largest lender Kookmin Bank. Buyers are also looking for online platforms to buy homes at lower prices and with fewer expenses.

NOT ONLY PLATFORMS BUT ALSO ONLINE COMMUNITIES

Sellers put their homes on the market not only at free property trading platforms and other virtual marketplaces but also with famous online communities at Naver Corp., the country’s top portal.

Few had traded property without real estate agents in the past as safety was most important for such deals. But trade platforms have established safety measures such as escrows, a contractual arrangement in which a third party receives and disburses money or property for the primary transacting parties, with the disbursement dependent on conditions agreed to by the transacting parties. That has eased concerns among users over potential fraud and other risks in online property transactions.

Real estate was often traded at lower prices than market values without agents to reduce sellers’ taxes such as those for capital gains from property sales. But most of the transactions were done by actual buyers who took advantage of the recent drops in apartment prices, industry sources said.

“Direct transactions between buyers and sellers appear to have increased although the overall number of transactions did not rise significantly, with market-price deals being rare,” said an official at the Korea Association of Realtors.

Write to Hyun-Il Lee at hiuneal@hankyung.com
Jongwoo Cheon edited this article.