During peak rental seasons, many properties receive pre-leasing or pre-application (pre-viewing) requests. Despite the abundance of properties, it can be challenging to decide on a property after viewing it. What are the differences between pre-leasing and pre-application? In this article, we'll explain the pros, cons, and risks of each, as well as which type of properties are suitable for these processes.
A pre-application involves submitting a rental application before viewing the property. It's also known as a pre-viewing application. Typically, applications are submitted after viewing a property, but pre-applications are accepted for properties that are scheduled to be vacated or new, unfinished properties where viewings are not possible.
A pre-application is an official application that follows these steps:
The initial tenant screening in step 4 might be basic, with a full screening conducted after the final decision in step 6. However, for stricter screenings, rejections can occur at the preliminary stage.
1.Decision after Viewing
The main advantage is the ability to make a decision after viewing the property. If the property does not meet your expectations, you can cancel, providing peace of mind.
2.Reservation of Property
During peak seasons, desirable properties often receive applications before you can view them. A pre-application allows you to reserve a property, giving you a priority in decision-making.
1.Limited to One Application
Although a pre-application allows you to decide after viewing the property, it generally requires a commitment to apply. You cannot pre-apply for multiple properties as a backup. Even if you consider applying for one property through different real estate agencies, it's likely that the same management company, landlord, or guarantor handles these properties. This can lead to your multiple applications being discovered, which may result in failed screenings if seen as likely to cancel. Remember, you are allowed only one pre-application per person.
2.Only an Application, Not a Guarantee of Move-In
A pre-application is just an application and does not guarantee move-in. For popular properties, multiple pre-applications are usually received, and priority is generally given based on the order of application. If the first applicant cancels, the next in line will have the opportunity to move in.
2-1. Risk of Priority Reversal with Pre-Lease
There is a risk of priority reversal if the property also accepts pre-leases. As explained in the section "What is a Pre-Lease?", pre-leasing involves signing a contract without viewing the property, giving it higher priority over pre-applications. Ensure whether the property you're pre-applying for also accepts pre-leases.
2-2. Risk of Priority Reversal with Negotiations
Priority can also change due to negotiations. If both the first and second applicants express their intent to sign after viewing, but the first applicant negotiates the rent while the second does not, the second applicant might be chosen. Ideally, the management should communicate this, but sometimes the first applicant's negotiation can lead to a failed screening without clear communication, so be cautious.
Time Elapses Until the Viewing
If there is a one-month gap between the pre-application and the viewing, and you decide against the property after viewing, that time has elapsed. If you have a fixed move-in date, you'll need to find and contract a new property quickly. This is especially critical during the busy February-March period, where most desirable properties might already be taken by then. A pre-application is a formal application with the opportunity to view, and relying solely on this approach carries risks, as you need to be prepared to make a decision without seeing the property first.
1.Limited to One Application
A pre-application is limited to one property. You cannot submit multiple pre-applications as a backup plan.
2.No Guarantee of Move-In Due to Pre-Lease Priority
A pre-application does not guarantee you will secure the property. If a pre-lease is offered, those who sign pre-leases are given priority.
3.No Guarantee of Move-In Due to Potential Rejection from Negotiations
The pre-application does not guarantee move-in if negotiations, such as rent adjustments, lead to rejection.
4.Need to Find a New Property if Canceled After Viewing
If you cancel after viewing, you must quickly find and apply for another property.
A pre-lease involves signing a lease before viewing the property. This is often done for properties scheduled to be vacated or new, unfinished properties where viewings are not possible.
Since a pre-lease is a formal contract, it follows these steps:
In a pre-lease, the contract is completed before viewing the property. You agree to sign without viewing, and if you must cancel, you must follow termination procedures.
1.Guaranteed Move-In
The biggest advantage is the certainty of move-in. Once the contract is signed, your tenancy is secured, unlike pre-applications where order and approval might change.
2.Securing High-Quality Properties
By taking the risk of not viewing, you can secure properties with excellent conditions. Many properties that go through pre-lease are highly desirable and would receive immediate applications if viewings were allowed. Pre-leasing allows you to select these high-quality properties while they are still available.
3.Better Preparation for Moving
With pre-leasing, the move-in date (key handover) is usually fixed in advance. This helps you time your move without wasting the transition from your current rental. You also have more time for preparations and necessary procedures, ensuring a smoother transition.
1.No Cancellations
Since the pre-lease is finalized before viewing the property, you cannot cancel it. For new constructions, make sure to thoroughly review floor plans and equipment lists. For properties scheduled to be vacated, check for available photos of the unit. Also, inspect the surrounding environment for noise and nearby buildings or facilities, which can be assessed even before the property is completed. Confirm the orientation using site plans; south-facing units do not always guarantee good sunlight.
2.Signing Without Viewing
Similar to the inability to cancel, signing a lease without viewing the property can be psychologically unsettling. For properties scheduled to be vacated, consider viewing other units in the same building. For new constructions, visit similar properties from the same developer or brand to get a sense of the quality and amenities.
3.Uncertain Cleaning Status for Vacant Properties
The biggest risk in pre-leasing non-new properties is the unknown cleaning status. Issues can arise such as lingering odors from previous smokers, flooring that doesn't match your expectations, or equipment malfunctions that delay key handover. Many pre-lease issues are related to cleaning and maintenance. After the previous tenant vacates, ensure to inspect the unit to understand the extent of the restoration work needed.
1.No Cancellations
Pre-leases cannot be canceled once signed.
2.No Viewing
You must sign the lease without viewing the property.
3.Unknown Cleaning Status
For properties scheduled to be vacated, the cleaning status is unknown.
4.Potential Change in Move-In Date
In the worst-case scenario, the move-in date might be rescheduled.
February and March are the busiest months for single-person moves. Most modern apartments with auto-lock features get applications even before viewings start. If you find a property that meets your criteria in your desired area, it’s advisable to submit a pre-application after checking the surrounding environment.
Newly built 1LDK apartments by housing manufacturers are very popular due to their good layouts and excellent amenities. However, since there are fewer of these than 1K apartments, the competition is often fierce. If you come across a newly built 1LDK in your budget and desired area, it’s recommended to submit a pre-application.
Opportunities to live in newly built properties are rare. When new properties become available, it’s recommended to go for a pre-lease. The primary risk of pre-leasing, not knowing the post-occupancy cleaning status, does not apply to new builds. Additionally, new properties often come with detailed equipment lists and floor plans, reducing the risk of mismatched expectations. Ensure you check the surrounding environment and sunlight exposure. Regularly check for information on new properties in your desired area.
While pre-leasing non-new properties is generally not recommended, if you find a property that you truly like and it accepts both pre-applications and pre-leases, it’s better to opt for a pre-lease. The main reason is that losing a property you really wanted to someone else can be a frustrating experience, making it difficult to settle on another property. To avoid regret, if you like a property, it’s best to decide on a pre-lease.
| Pre-Application | Pre-Lease | |
|---|---|---|
| Cancellation | Possible | Not Possible |
| Process | 1.Review materials like floor plans 2.Visit site, view exterior or other available units 3.Submit pre-application 4.Tenant screening 5.View property post-vacancy (or open house for new builds) 6.Decision (can cancel) 7.Sign lease |
1.Review materials like floor plans 2.Visit site, check exterior and surroundings 3.Submit application 4.Tenant screening 5.Sign lease 6.Confirm details (measurements, etc.) 7.Key handover |
| Advantages | 1.Final decision after viewing 2.Reserve the property |
1.Guaranteed occupancy 2.Secure desirable property 3.Ample time for moving preparations |
| Disadvantages | 1.Only one application allowed 2.Application does not guarantee occupancy 3.Time passes until viewing |
1.Cannot cancel 2.Must sign without viewing 3.Unknown cleaning status for pre-vacancy units |
| Suitable Properties | 1.1K apartments during peak season 2.1LDK by housing manufacturers |
1.Newly built properties 2.Properties accepting both pre-applications and pre-leases |
This concludes our discussion on pre-leases and pre-applications. The busy season is approaching quickly. If you are considering moving into a 1K apartment by March, now is the time to prepare. Understanding the differences between pre-lease and pre-application and using these processes to your advantage is crucial for successful property hunting. This is also the best time to gather information and seek advice before real estate offices become crowded. New property information for the spring is starting to become available. For those living far away, online consultations are highly recommended. You can book an appointment through the link below.
Thank you for reading until the end.
