A First-Time Homebuyer's Checklist for Choosing an Agent, Signing a Contract, and Closing

The key to minimizing losses when buying your first home is neither distrusting the real estate agent nor relying on them completely, but cross-checking important facts against official documents and on-site conditions. The information below is based on the home purchase process in South Korea, and legal judgments regarding individual contracts may vary depending on the facts.

Real Estate Transaction Misconceptions to Correct First

Is It Always Safer to Visit Multiple Real Estate Agencies?

Comparing market prices and explanations from two or more real estate agencies helps reduce information bias. However, there is no rule requiring you to visit at least three. The same property may be listed with multiple agencies, and even numerous visits will not make a transaction safe if you neglect to verify the rights and interests involved.

When evaluating a real estate agency, it is better to look for the following practices.

• Does the agency allow you to verify its registration certificate and the identity of the person in charge?
• Does the agent ask detailed questions about priorities such as your budget, loan, commute, and move-in date?
• Does the agent explain not only the property's advantages but also its rights and interests, areas requiring repairs, and transaction risks?
• Does the agent distinguish between actual transaction examples and current listings when presenting the basis for price assessments?
• Rather than pressuring you to sign a contract, does the agent explain which documents to check and the relevant schedule?
• Does the agent transparently explain the brokerage fee, whether co-brokerage is involved, and the relationships among the parties to the transaction?

The mere fact that an agent actively engages in co-brokerage does not necessarily mean the agent is on the buyer's side. In South Korea, brokerage fees charged to each client and settlement arrangements between co-brokers are separate, and the actual interests involved vary by transaction.

Is the Confirmation and Explanation Statement for the Property a Notarized Document?

No. The confirmation and explanation statement for the property is an important document that a licensed real estate agent must prepare by verifying and explaining matters in accordance with applicable laws and then provide to the parties to the transaction. However, it is neither a notarized document nor an inspection report guaranteeing the property's overall condition. Defects that are difficult to discover through an ordinary inspection, such as leaks hidden behind furniture or finishing materials, may not be recorded.

Does Unilaterally Withholding the Balance Protect the Buyer?

Even if a serious problem is discovered, if the buyer unilaterally refuses to pay the entire balance without checking the contract and legal grounds, the buyer may face an issue of breach of contract. The buyer should first secure evidence and, through the agent, reach a written agreement with the seller regarding repairs, withholding part of the payment, or changing the schedule. If no agreement is reached or the amount is substantial, it is safer to consult a lawyer or other legal professional before refusing payment.

Step 1: Set Your Budget and Purchase Criteria

If you calculate your budget based only on the purchase price, you may run short of funds when paying the balance. Estimate the following costs separately.

• Timing of the deposit, interim payment, balance, and use of your own funds
• Taxes such as acquisition tax
• Brokerage fee and whether value-added tax applies
• Costs related to title transfer registration and judicial scrivener fees
• Loan-related incidental costs
• Moving, repair, appliance, and furniture costs
• Apartment maintenance fees and various settlement payments

Before searching for properties, do not merely check the maximum loan amount available; also assess whether the loan can actually be disbursed. The outcome may vary depending on the type and price of the home, collateral value, income, existing debt, whether the property is in a regulated area, and the financial institution's review. A preliminary consultation or estimated limit does not constitute final approval.

Dividing your purchase criteria into “essential,” “preferred,” and “negotiable” will help you remain consistent during negotiations.

Step 2: Verify the Real Estate Agency and the Person in Charge

Check the real estate agency registration certificate, displays related to licensed real estate agent qualifications, and brokerage fee rate table posted at the office. You may also ask whether the person who showed you the property is a brokerage assistant or an affiliated licensed real estate agent. A brokerage assistant must disclose that they are a brokerage assistant, and you should verify that the procedures for preparing and signing the contract and confirmation and explanation statement comply with applicable laws.

A good agent does not ask only about the buyer's maximum budget. The agent should be able to answer the following questions with supporting grounds.

1. Why do recent actual transaction prices differ from current asking prices?
2. What are the rights and interests involving the owner, mortgages, seizures, provisional seizures, jeonse rights, and other matters?
3. Who currently occupies the property, and when can it be vacated?
4. What are the history of leaks, condensation, and repairs, and which fixtures are included?
5. How will it be verified that no additional rights are established between signing the contract and paying the balance?

You should disclose your budget and need for a loan to receive suitable recommendations, but you do not need to reveal your highest negotiable price from the outset. It is reasonable to distinguish between the financial conditions the agent needs to know and the negotiation limit to be presented to the seller.

Step 3: Cross-Check Market Prices and Public Records

Property advertisements and the agent's explanations are only the starting point for verification, not the final basis for a decision. At a minimum, compare the following materials.

Checking the certificate of registered matters only once when first viewing the home is insufficient. Check the latest status again before signing the contract, when necessary before and after making an interim payment, and immediately before paying the balance. Compare the owner's name against their ID, and if an agent signs the contract on the owner's behalf, verify the authenticity and scope of evidence of authority, such as the power of attorney and seal certificate.

For a property with a trust registration, separately verify the registered trustee and the authority to dispose of the property under the trust register. Do not enter into a contract based solely on the explanations of the person named in the records or the occupant.

Step 4: Inspect the Home in Person at Different Times

If possible, visit under different conditions, such as during the day and evening or on weekdays and weekends. Immediately after rain is a good time to check for signs of leaks, but whether a leak exists cannot be conclusively determined from a single visit.

Interior Inspection Items

• Stains in ceiling and exterior-wall corners, lifting wallpaper, and moldy odors
• Signs of condensation around windows and the condition of silicone sealant
• Water pressure and drainage when multiple faucets are running simultaneously
• Leaks and corrosion beneath the kitchen sink and washbasins
• Boiler operation, heating manifold, and hot-water condition
• Cracks, tilting, and finish damage on walls and floors
• Fixtures included in the sale, such as built-in cabinets, air conditioners, and lighting
• Noise and odors from other floors, roads, railways, and commercial premises

Additional Items to Check for Multi-Unit Housing

• Number of available parking spaces and nighttime parking conditions
• Repair condition of common areas such as elevators, exterior walls, and rooftops
• Whether maintenance fees are overdue and how they will be settled on the balance payment date
• How settlement items such as long-term repair reserves will be handled
• The official stage of any reconstruction or remodeling initiative

Obtain the owner or occupant's consent before taking photos or videos, and record the date and location. If a professional inspection is necessary, you may also consider engaging a home inspection professional with the seller's consent before signing the contract.

Step 5: Finalize the Agreement Before Transferring a Preliminary Deposit

Calling a payment a “preliminary contract deposit” does not automatically weaken its legal effect. If money is transferred after an agreement has been reached on essential terms such as the property and purchase price, disputes may arise over whether the main contract was formed or whether the money can be refunded.

Before transferring money, confirm at least the following by text message or in a separate document.

• Exact identification of the property
• Purchase price and the nature of the money paid
• Date of the main contract and balance payment date
• Conditions under which the money may be refunded or forfeited
• How a loan denial will be handled
• Registered rights and occupancy status
• Whether the seller and buyer agree to the key special provisions

Do not transfer money solely because the agent says, “Send it first and we can hold the property.” You should also verify who the contracting party is and why the money is being sent to the agent's account.

Step 6: Prepare the Contract and Special Provisions

More special provisions are not necessarily better. They are useful when they specifically allocate the risks of the particular transaction. Ambiguous or unenforceable language may instead increase disputes.

Key Special Provisions to Review

1. Loan Conditions: Specify the financial institution, loan type, minimum amount required, application deadline, buyer's duty to cooperate, method of confirming denial, and whether the deposit will be refunded.
2. Prohibition on Changes in Rights: Provide that no new mortgage, leasehold right, seizure, or other right adverse to the buyer may be established from the contract date until completion of the title transfer registration.
3. Cancellation of Existing Security Interests: Specify the rights to be canceled simultaneously with payment of the balance, the repayment method, cancellation documents, and order of processing.
4. Delivery and Transfer of Possession: State the seller's or tenant's move-out date, key handover, items to be left behind, and responsibility for disposing of waste.
5. Fixtures and Defects: State the included options, identified defects, party responsible for repairs, allocation of costs, and completion deadline.
6. Settlement of Taxes and Maintenance Fees: Specify the items to be settled as of the balance payment date and how overdue amounts will be handled.

A short phrase such as “void if the loan is not approved” may be insufficient. Interpretations may differ over whether it includes issues with the buyer's credit, failure to submit documents, approval for a lower amount than expected, or a mere change of mind.

Step 7: Review the Confirmation and Explanation Statement for the Property

Under the Licensed Real Estate Agents Act, a licensed real estate agent must verify and explain legally prescribed matters, including rights and interests and statutory restrictions on transactions and use, and must provide a confirmation and explanation statement. Before signing the contract, the buyer should receive the explanation and request corrections to any parts that differ from the property's actual condition.

Items to check include the following.

• Registered rights and interests and actual rights and interests
• Land use plans and public-law restrictions on use
• Condition of facilities such as water, electricity, gas, fire protection systems, and elevators
• Condition of walls, floors, water supply, and drainage
• Environmental conditions, management matters, and brokerage fees
• Items that were difficult to inspect in person and the reasons

Even if a document states “normal” or “none,” reconfirm any suspicious areas through photos, repair records, and professional inspections. Do not sign documents with blank spaces or sign everything at once without actually receiving an explanation. Keep the contract, confirmation and explanation statement, certificate of registered matters, transfer records, and conversation records together.

Step 8: Recheck the Vacant Home and Registration Before Paying the Balance

The period after the seller's belongings have been removed but before the buyer's belongings are brought in is a good time to identify previously concealed defects. However, this inspection period should be incorporated into the contract and moving schedule in advance.

Order of Checks on the Balance Payment Date

1. Review the latest certificate of registered matters to determine whether any new rights have been established since the contract was signed.
2. Reconfirm the owner, authority of any representative, and account receiving the balance.
3. Inspect the vacant property and whether the agreed repairs have been completed.
4. Coordinate with the judicial scrivener and financial institution regarding the order of repayment and cancellation of existing mortgages and filing of the title transfer registration.
5. Receive the keys, means of access to the common entrance, management-related materials, and instructions for using the fixtures.
6. Settle maintenance fees, utility charges, and items specified in the contract.
7. Retain proof of the balance transfer and registration filing.

If you discover a major defect, record the overall view, close-up views, and footage showing flowing water or malfunctioning equipment, together with the date. Immediately notify the agent and seller in writing and prepare a written agreement regarding repairs, allocation of costs, or withholding part of the payment. Do not unilaterally deduct repair costs from the balance without an agreement.

Assess the Ability to Perform the Contract Rather Than Market Advantage

In a seller's market with few available properties, it may be difficult to secure a price reduction or complex special provisions, while in a market with many listings, the buyer may have greater bargaining power. However, market conditions are not a reason to disregard rights and interests or defects.

Dividing negotiation terms into the following three levels makes decisions easier.

• Non-Negotiable: Uncertainty over title transfer, serious rights issues, essential loan conditions, risk of failure to transfer possession
• Open to Price Adjustment: Repair costs, options, move-in date, settlement of maintenance fees
• Acceptable to Waive: Minor finish damage or fixtures already scheduled for replacement

An agent conveying the seller's conditions is not necessarily colluding with the seller. Conversely, you should not assume that an agent is the buyer's legal representative simply because the agent is friendly and proactive. Responsibility for the final purchase decision and document verification remains with the parties to the transaction.

Step-by-Step Checklist for Buying Your First Home

Conclusion

The most dangerous action when buying your first home is assuming that “the professionals must have taken care of everything.” Choose a trustworthy licensed real estate agent, but personally compare actual transaction prices, the certificate of registered matters, building register, confirmation and explanation statement, and on-site conditions.

It is particularly important to finalize key conditions before transferring a preliminary deposit, draft specific loan-related special provisions, and recheck the registration and vacant property immediately before paying the balance. If the rights and interests are complex or there is a significant possibility of a defect or payment dispute, it is safer to obtain an individual review from a relevant professional, such as a lawyer or judicial scrivener, before signing the contract or paying the balance.