Buying a home in Israel can be one of the most difficult processes that Olim experience. I have thus compiled a short guide to help make sense of it all and avoid some of the pitfalls.
Before commencing your search, consult with a bank or mortgage advisor to ascertain your real budget. This will save much time viewing unsuitable properties or losing out because you are not ready to act.
When considering an area, balance your work, family, leisure, educational & and religious needs in accordance with your budget. Have your realtor or appraiser check comparable values of properties in the area, especially of deals actually done, as opposed to just looking at unsubstantiated, fanciful asking prices. Ask what new building plans may exist or are being considered that may impact the property, its view and access.
When looking at properties, remember to bring a notepad and camera. Avoid complimenting the seller that his “house is beautiful”, or making concrete furniture plans in front of him – it could cost you dearly! Be careful with whom you discuss any properties in Israel you are viewing. It is a small, small world indeed. Ask what fixtures and fittings are included in the sale before negotiating on price. Stake out the property and surrounding neighborhood at different times of the day and night.
When dealing with Israelis, use an experienced Hebrew speaking negotiator to level the playing field. I also recommend hiring a specialist English speaking real estate lawyer to explain the differences in how the system works in Israel. It is no use telling a seller “Well in the States we do it this way!”. Do not be tempted or feel pressured to sign a zichron dvarim unless there are exceptional extenuating circumstances, and even then only with approval of your lawyer.
Bear in mind that property purchases are usually transacted in Israeli Shekels. Accordingly, do note that some associated transfer costs fall on the buyer. There are ways of reducing this cost. Currency fluctuations on outstanding payments can significantly alter the price actually paid, so the longer the period of time to closing, the greater the risk.
Building inspections are always recommended and are effected prior to contract. Before you bring in an engineer use your own sense and ask questions like “Have you had any moisture problems?” and “When did you last paint?” Properties in Israel are usually sold on an AS IS basis so don’t rely on using a colorful engineer’s report to renegotiate the price.
If taking out a mortgage, it is advisable to carry out an appraisal before signing. It is also a good idea to check with various removal companies that they can service you on the closing date required.
Remember to bring your ID or passports and checkbook, as there are often some small payments to be made including legal and agents’ fees that are usually paid at this time.
The buying and selling process often brings out strong emotions in people. A small, relatively minor, issue can become a deal-breaker because either side feels they are being taken advantage of. So it is important to stay calm and try to keep things in proportion, and focus on the end result, which is to move on to the next chapter of your lives.
Seller needs to request transferring ownership records at the municipal authority.
Purchase tax which was raised this year for second apartments and overseas buyers needs to be paid within 50 days. One can request a delay or to split into several installments.
Insurance: Buyers are advised to activate buildings insurance after signing, as seller’s policy may be automatically cancelled when mortgage is paid off.
The final payment is usually paid on or just before the day the property is handed over. Often a banker’s check is given. During the walk-through, bring a camera to photograph meter readings and document any change in the condition of the property. Call up utility companies to transfer account holder information and resolve any utility deposit issues.
Mazal Tov. I hope something in this guide made things a little easier for you!
The above information is intended as a general guide only and not intended to be an exhaustive compendium on the subject. Accordingly all information herein should be checked with the relevant professionals. The writer, Ilan Rubinstein, UK born, is a licensed Israeli real estate agent with 15 years’ experience in Israel. Ilan is the C.E.O. of I.L.A.N. Estates & Investments. Ilan specializes in assisting olim acquire new and existing property, investments and businesses in Israel.