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In Israel, both the Buyer and the Seller pay commissions. Usually
2 % each. As a Buyer, you can choose a Real Estate Agent first or
just look for properties and deal with the individual Agent who
is representing that particular property in Israel. Whichever path
you choose, negotiations are conducted between the Agents. Once
an agreement is reached, the matter is handed over to Lawyers. Typically,
both the Buyer and the Seller should have their own Lawyers. Consult
your Real Estate Agent for guidance in deciding on location, type
of property, understanding what is included in the Purchase Price,
the length of the process, etc.
The fees and taxes involved in a Real Estate transaction is Israel
can be as high as 8%. This includes, Commissions of typically 2%
plus VAT (Value Added Tax) - approx. 2.36%, Lawyer’s Fees of typically
1% plus VAT - approx. 1.18% and Purchase Tax of 3.5% to 4.5 % of
the purchase price.
Mortgages for foreign non-residents are available in Israel. The
typical mortgage would be up to 60% of the Appraised Value, although
you can also use EMI (Mortgage Insurance) as a way to increase the
amount of your mortgage. On New Construction Projects in Israel,
you can often get higher % Mortgages than on resale property, sometimes
as much as 80% of the value. Feel free to contact one or more of
the Israeli Banks mentioned on this site for further information.
If you would like a Morgage agent to help you with financing requirments
please fell free to contact us for recommendations.
In Israel, the types of property are:
- Apartment - Building appartment
- Cottage – A dwelling on more than one level, attached to another
dwelling with it’s own private entrance and garden.
- Villa – A free standing dwelling with garden attached.
- Penthouse – The top floor or apartment of an apartment building
oftentimes with a roof terrace.
Home sizes
Homes sizes in Israel are described in terms of the number of rooms,
counting only the bedrooms and living rooms. In other words a 4 room
apartment would most likely mean 3 bedrooms and a living room. Also
sizes of homes or apartments will be expressed in sq meters. 1 square
meter = 10.7 sq ft. If you are buying raw land, sizes will be expressed
in terms of dunams. 1 dunam = 1000 sq meters or 9700 sq ft.
As befits a geographically small country undergoing rapid economic
development, Israel boasts a very active real estate market. Construction
and development in the market is dominated by the private sector,
while the land market is dominated by the government. The real estate
market in Israel has undergone and is continuing to undergo a significant
process of maturation, moving from a market characterized by limited
choice and options and low quality construction, to one which now
boasts a wider range of alternatives in terms of location, size,
building quality, and amenities.
The foreign investor seeking to purchase or lease a property in
Israel for investment or for corporate use should familiarize himself
with the operation of the market in Israel, in terms of pricing
dynamics, location alternatives, the types of property available,
and the legal and financial framework within which the Israeli market
operates.
Important factors in choosing a home
After choosing the desired town of choice some important aspects
that should be taken into account are site of the property , number
of bedrooms, neighborhood details and ofcourse the neighbours, synagogues
, furnished or non-furnished. If you have children then the distance
to schools is an important factor.
After finding a property that you like, you may make an offer, nogotiations
with the seller over the price is common practice in many cases
as are the payment terms and date of possession. When agreement
is reached a contrct for purchasing the property is drawn up by
an attorney of the seller and reviewed by the buyer's attorney.
The contact is signed and the payment is handled. It is custom is
Israel for the price of the property to be paid out over a period
of months (up to 12 months) depending on the details. When immediate
occupancy ir required an up front payment will be required.
Transfer of Title takes palce after the last payment is made. It
is custom to file a "warning: in the land registration office
after the contact is signed stating that the property is under sale
and cannot be re-sold by the seller. The buyers attorney should
be responsible for making sure that the change of title takes palce
after full payment is complete. It is not common but can be negotiated
that a small percentage of the purchase price be held in trust by
your attorney or the sellers attorney until the transfer of the
title is complete.
Property inspections are recommended when purchasing property that
is not new. Inspections can be done at your initiative and expense.
A complete written report by a licensed engineer can cost $100 to
$500. When purchasing a second hand home we stronly recommend inspection
by a professional or at least by the buyer onsite before the contact
is signed.
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