Korean Real Estate Auctions — A Practical Guide

Court auction vs Public sale

1) Search

• courtauction.go.kr — official court auction database (Korean only).
• onbid.co.kr — KAMCO public sales platform.
• Private aggregators (지지옥션, 굿옥션) — paid; useful for pre-screening, not authoritative.

2) Rights analysis (권리분석) — most critical step

Step 1: Identify the extinguishing right. Candidates: registered mortgage (근저당), attachment (압류/가압류), security-type provisional registration (담보가등기), and — only if none of those exist — the auction commencement registration itself. The earliest of these (by registration date) is the extinguishing right.

Step 2: Map the rights on the registry against the extinguishing right. Anything dated earlier is senior and survives the sale. Anything dated later is wiped.

Senior rights you may inherit

• Tenant with opposing power — A tenant whose move-in + resident registration predates the extinguishing right. Any portion of their deposit not paid out from auction proceeds becomes the buyer's liability (Housing Lease Protection Act Art. 3-2).
• Senior provisional registration for ownership transfer (소유권이전청구권 가등기) — If exercised, the buyer's title can be invalidated. Critical risk.
• Provisional disposition (가처분) — Buyer's title is contingent on the underlying litigation.
• Statutory superficies (법정지상권) — A right to use land that the building's owner holds. If buying land or building separately, this can entitle the other party to use without paying for it.
• Lien (유치권) — Created by possession, not registration. Often fabricated; verifying genuineness is costly.

3) Bid pricing

Your "real cost" is not just the winning bid. Add:

• Winning bid
• Inherited deposits (any senior tenant claims not satisfied from auction proceeds)
• Acquisition tax — same rates as ordinary purchase
• Eviction cost — typical KRW 1-5M settlement; KRW 2-5M if you go through full enforcement
• Common-area unpaid management fees — Supreme Court 2001다8677 says common-area arrears pass to the buyer. Private-area arrears stay with the prior occupant in principle.
• Title transfer fees (legal scrivener + registration)
• Renovation budget

Try the auction bid simulator →

4) Bid day

• Bid deposit: 10% of the minimum sale price (20-30% on re-auction).
• Mistakes in the bid form (wrong amount in either text or digits) invalidate the bid.
• Proxy bidding requires a power of attorney with a registered seal and certificate.
• Winning bidder is announced same day. A 1-week confirmation period follows, then 30 days to pay the balance.

5) Closing & eviction

• Loan — Auction balance loans (경락잔금대출) exist; underwriting starts after winning. Same DSR/LTV applies. Foreign buyers face the same visa/residency constraints as for ordinary mortgages.
• Title transfer — The court files the transfer automatically once the balance is paid.
• Eviction order — Apply within 6 months of paying the balance (Civil Execution Act Art. 136). After that, full litigation is required.
• Enforcement — Once the order is granted, the bailiff issues a notice (계고) and a forced eviction date. Typically 2-3 months end-to-end.

Common pitfalls

• Sham tenants — Relatives registered to claim a senior deposit. Cross-check move-in dates, contract dates, and family registry.
• Fake liens — Often unwound in court, but litigation is expensive.
• Co-owner preemption (공유자 우선매수) — If you bid on a fractional interest, a co-owner can take it from you at the winning price.
• Building without legal access to land — Statutory superficies issues, or no road access. Cheap properties usually have a reason.

References

• Supreme Court of Korea — Auction Information
• Onbid (KAMCO)
• Civil Execution Act
• Housing Lease Protection Act
• Auction Bid Simulator →