Buying an Apartment: The Ins and Outs
There is so much to buying an apartment than just the legal side of things. There are so many issues to be decided and then implemented. So here is a list of things that need to be dealt with. The first place to start is finding the right professionals for your transaction.
Finding the right property
Where do you want to live? Are you a city dweller or do you want to live in the suburbs or in the country? What size of a place do you need? Do you want a garden? Do you want a rooftop? Do you need two parking spaces? Do you want storage? Sit down and make a wish list of what you want in a property.
Make a budget
How much money do you have for this? Do you want to take a mortgage? Do you have savings? When you know the size of your budget you can then see if the budget matches your wish list.
Consult with an Israeli real estate attorney to find out what taxes and other expenses are involved. When you have this, you will know how much money you will need.
Consult a mortgage consultant to see what kind of mortgage you can get. How much money will a mortgage bank give you? What are the fees involved in taking a mortgage (i.e. mortgage consultant fees, appraiser, registration fees bank fees etc.). What will the monthly mortgage payments be? Will you be able to afford this? If you have not lived in Israel yet it would be a good idea to find out what the living expenses be for you and your family so you can see if you can afford the mortgage you want.
Consulting a real estate agent
When you have your budget and wish list find a reliable real estate agent to advise you. The real estate agent should direct you to properties that you can afford with your budget. A good real estate agent can show you around the neighborhood.
If you do not live in Israel, you need to plan how you will transfer the large amount of funds needed to purchase your property. There are several options: Your lawyer can open an escrow account and you can send the money there. Your lawyer will disburse payments to whoever needs to be paid. This will incur additional legal fees and bank fees.
You can send the money to an exchange company. You can save money on conversion costs incurred at the banks when transferring foreign currency to an Israeli account and converting it to NIS. Not all exchange companies agree to then disburse payments for you, but some do.
After you have located your dream home
Is it structurally sound? Hire an engineer to check the house and give you a report. Are there a lot of things that need repair? How much will these repairs cost? If the repairs are costly will the seller come down in price? Will you buy the property anyway?
Are you planning renovations? Consult with an interior designer or an architect to find out if what you are planning is doable from a technical point of view? How much will those renovations cost? How long will it take to do? Do you need a building permit? How much will this cost?
Now you are ready for your lawyer
Your Israeli real estate lawyer will do a title search. There is no title insurance in Israel. If your lawyer feels that you should hire an appraiser to check to see if the property is built according to existing building permits, then follow this advice. Having illegal additions to the property can cause problems with getting the mortgage you want and you may be hit with a lawsuit from the local municipality over this in the future.
Your real estate attorney will be in touch with the seller’s lawyer to negotiate the contract. This means the payment schedule, date of possession, transfer of title, who is responsible to pay what, and how much money needs to be held in escrow against taxes owed by the seller. Your real estate lawyer will report the transaction to the tax authorities and register the property in your name.
One needn’t fear real estate transactions in Israel. Take the time to find the right professionals and plan the transaction in the best way for your wishes and finances.
Nicole Levin Law Offices