|
|
|
| |
|
|
| |
 |
Where do I start? |
|
| |
Prices are beginning to rise again after 4+ years of declining. The dollar is relatively strong against the shekel, which makes a real estate investment very attractive right now. A wide variety of housing options face the prospective buyer in Israel. Locations, sizes & characteristics of homes are as diverse as the country itself. The most important factors to take into consideration (city/neighborhood preference, size of apartment and available budget) are common to buying a home in most countries. |
|
|
Back |
|
|
|
|
Where should I buy? |
|
| |
Obviously, someone looking to buy should begin with the city or town they wish to live in. If you have some idea of your desired neighborhood or schools/synagogues, that will also help narrow the focus of your search, and save time & energy for you and your agent. Most of Israel`s residential communities have a distinct character; therefore, it is critical to research the desired neighborhood in advance. Our agents are knowledgeable in the areas they serve, and are happy & willing to assist you in your search. Many times, it can be a small fact or observation that will be the determining factor in a client`s decision on where to relocate, and that small fact or observation may not be easily ascertainable without the input of someone who is locally based. |
|
|
Back |
|
|
|
|
After picking a neighborhood... |
|
| |
After deciding on a neighborhood, you should zero in on the appropriate size property (# of bedrooms) that matches your budget and taste. Your agent`s knowledge of his service area is critical in choosing only those properties that are compatible to the search. Depending on your requirements, the number of compatible choices may vary. |
|
|
Back |
|
|
|
|
After you find the property you want..... |
|
| |
After a suitable property is found, negotiations begin over the terms of the purchase. Just about everything imaginable is subject to negotiation, including price, occupancy date & payout terms. Appliances & even furnishings may also be negotiated for inclusion with the purchase. |
|
|
Back |
|
|
|
|
To fix-up or not to fix.... |
|
| |
While it certainly isn't universally true, our experience has shown that local buyers are more amenable to buying a home in need of renovation and redoing it to their unique taste. Foreign buyers, on the other hand, appear to prefer properties that have already been redone. The advantages of buying a ''fixer-upper'' is that you get a break on the purchase price and you also get exactly the home you want after the renovations are finished. It may seem risky to take on the renovation of a new home from long-distance, but there are many reputable building contractors who do excellent work and can be relied on to carry out the renovation according to the buyer's wishes and within the agreed upon budget. |
|
|
Back |
|
|
|
|
Inspections..... |
|
| |
While inspections are not an everyday occurrance in Israeli real estate transactions, they are becoming more common, and are preferred by foreign buyers. An inspection generally takes place after negotiations have been finalized, but before a contract is signed. A written inspection report will be provided to the prospective buyer at a cost of approximately $350-500. Any issues raised by the inspection may be raised with the sellers as part of negotiation process. |
|
|
Back |
|
|
|
|
Going to contract..... |
|
| |
Once a suitable property has been found, the price and all relevant terms have been agreed to through negotiation, and the inspection results are in, a contract of sale/purchase is drawn up by the seller's attorney. The draft contract is then sent to the buyer's attorney for comments. After agreement is reached on all provisions of the contract, both side execute the contract. |
|
|
Back |
|
|
|
|
Paying the price..... |
|
| |
At the execution of the sale/purchase contract, money usually changes hands, although differently than in the United States. Since there is generally a gap of 1-11 months between contract signing & occupancy, the payment of the purchase price is customarily divided up into evenly spaced intervals until the final payment at occupancy. It is accepted practice to make a 20-25% downpayment at signing, 10-15% at occupancy and the balance of the price spaced in between. The number of payments & size of each is negotiable and will to some extent depend on the amount of time that lapses from signing to occupancy. |
|
|
Back |
|
|
|
|
Legal representation..... |
|
| |
While it is quite common for one attorney to represent both sides in Israel, many of our foreign buyers prefer to have their own separate legal representative. Having one attorney avoids confrontations between opposing counsel and streamlines payment transfers & title registration. On the other hand, there is an apparent conflict of interest in having one attorney represent both sides. Choosing a good attorney is crucial to the success of your transaction. Your legal representative should be a good advocate & negotiator, but should not let his/her ego interfere with progress to signing. An extensive background in real estate law and familiarity with the title registration process is a must. We have excellent working relationships with several wonderful real estate attorneys who will do everything to make sure all your rights are protected. |
|
|
Back |
|
|
|
|
Property registration..... |
|
| |
The process of property registration is different than in other countries. Immediately after contract signing, a special ''warning'' is filed on the property in the Land Registration Office. This warning indicates that the property is under contract for sale, and cannot be conveyed by the seller to anyone else until removed. When the last payment is made at occupancy, the buyer's attorney must then transfer registration of the property from the seller to the buyer. This generally takes from 14-60 days. The special warning is removed only after the title transfer has taken place. |
|
|
Back |
|
|
|
|
Additional costs..... |
|
| |
As with real estate transactions worldwide, the purchase price of your new home isn't the only cost of the transaction. The following is a general summary of peripheral costs of buying a home in Israel:
(1)Real Estate Commission-it is customary in Israel for both buyer & seller to pay a real estate commission. The accepted practice is for each side to pay their agent/broker 2% of the purchase price + Value Added Tax. This commission is due & payable immediately upon signing of the purchase contract since the agent's work is complete and the attorney finishes the rest of the process.
(2)Attorney's Fees-it is customary for the attorney representing you in the purchase of your new home to receive a fee equal to between .5%-1% of the purchase price + Value Added Tax. The amount of his fee will vary depending on the complexity of the transaction, whether there are any special registration problems, etc. This fee is generally payable when the buyer takes occupancy of his new home.
(3)Government Purchase Tax-a multi-tiered tax is levied on all purchases of real estate in Israel. New immigrants receive special discounts on this tax, but as a general rule, you can assume that you will pay approximately 3.5% of the purchase price. This tax is payable within 50 days of contract signing.
(4)Documentary stamps & miscellaneous expenses-all buyers must pay for documentary stamps to register the title in his/her name. There may also be some small costs for obtaining an abstract of title during the negotiation stage.
(5)Financing costs-while exact costs will vary, if you are obtaining local financing for your purchase, you will pay a loan application & origination fee to apply for a mortgage.
Total peripheral costs will be approximately 8-10% of the purchase price, so you should plan accordingly in determining the property you can afford to buy. |
|
|
Back |
|
|
|
|
