What you need to know when buying a property:
If you are considering a real estate purchase in Israel, you may need a team of professionals to assist you in completing a wise and secure transaction. The team at BPII would like to reassure you that once you’re in the process and have these professionals around you it's not that complicated. If you need any assistance with this we are here to help you.
In addition to a knowledgeable real estate agent, those professionals could include an attorney who specializes in real estate and a mortgage broker or bank if you are going to be obtaining a mortgage. It is also possible that you might need an engineer or some other kind of home inspection professional. If you are considering immigrating to Israel, you may wish to contact an agency like Nefesh B’Nefesh which assists people in making Aliyah. If you do not have the professionals that you need in place, BPII is able to assist you with finding the right person for your needs.
The Basics of buying property in Israel:
In Israel, both the buyer and the seller pay commissions to their respective agents. Real estate agents in Israel predominantly charge 2% of the price of the property. As a buyer, you can either choose a real estate agent who you would like to work with, or simply look for properties and deal with the individual agent who is representing that particular property. Whichever course you choose, negotiations are conducted between the agents.
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. Be sure to determine what is included in the purchase price because property in Israel is sold with just the bare walls unless otherwise agreed. Once an agreement is reached, the matter is turned over to lawyers. Typically, both the buyer and the seller have their own lawyers. The lawyers do all the necessary research to determine the legal status of the property, ensure that any work done on the property was done with the proper permits, etc. The price and all financial terms are incorporated into the agreement by the lawyers.
Upon signing the contract to purchase your property, you must be prepared to make a first payment and your lawyer and real estate agent will present their bills; their fees are due at this point. In addition, the purchase tax is also due, although there is a 50 day grace period in which to pay the tax. This payment should be coordinated with your lawyer.
Before an agent will show you a property, they will ask you to sign a “request for real estate services”. This form is required by Israeli real estate law and becomes the agreement which legally entitles the agent to a commission. Make sure that the exact address is indicated on the agreement, especially if you are looking at property with more than one agent, so you don’t get into a situation where you obligate yourself to pay 2 commissions for the same property.
If you have any questions at all about the buying process in Israel, or any additional information about the role these various professionals play, please contact us and fill in the below contact form.