As debate spread over the so-called "site visit fee," which would require paying a separate fee to real estate agents when viewing listings, the Ministry of Land, Infrastructure and Transport drew a line, saying it "has not reviewed" the idea. The Ministry of Land, Infrastructure and Transport (MOLIT) said there is no explicit basis under the current Licensed Real Estate Agents Act to collect a separate flat fee solely for guiding clients to listings on-site.
On Aug. 8, the Ministry of Land, Infrastructure and Transport (MOLIT) said in a press clarification that it "has not discussed or reviewed with the Korea Association of Realtors(KAR) the introduction of a 'site visit fee for brokerage properties (site visit fee)' in addition to brokerage commissions and actual out-of-pocket expenses under the current Licensed Real Estate Agents Act and related regulations."
The site visit fee controversy flared on Jul. 26, when Kim Jong-ho, head of the Korea Association of Realtors(KAR), raised the need for a "basic site visit fee system" at a press briefing. As "site visit crews," who tour multiple listings without an actual intent to buy, have increased, the brokerage industry has complained that too much time and expense are spent on on-site guidance that does not lead to a contract. The intent is to have a basic fee to recoup the expense incurred during the process of guiding clients to listings.
However, as concerns grew that additional expense could be imposed even though end users need to compare multiple listings to find a home, the controversy intensified. Critics say that if a separate expense is charged from the stage of viewing listings, even though brokerage commissions are paid when a transaction is concluded, the burden on consumers will increase.
In this regard, the Ministry of Land, Infrastructure and Transport (MOLIT) explained that brokerage commissions are calculated based on the transaction amount when a contract is concluded, and separately collectible out-of-pocket expenses are limited to items such as certificate issuance fees, transportation, and lodging. There is no separate rule that allows a flat site visit fee solely because the brokerage property was visited or a listing was guided. Under Article 32 of the current Licensed Real Estate Agents Act, a licensed real estate agent in business may receive brokerage commissions and certain out-of-pocket expenses from the client for brokerage services.
The Korea Association of Realtors(KAR) also drew a line, saying it is not at the stage of officially pushing for the introduction of a basic site visit fee system.