Even if you find the perfect property in Israel and you are set on buying it, you will need good negotiating skills to seal the deal. Once you have found the right
real estate agent to suit your needs, they will help you with the offer process which can sometimes be tricky when you are not so familiar with the culture or the market.
What to do next ?Once you have established a relationship with a real estate agent in Israel and before you make an offer on a property, you should be asking the agent for referrals to an attorney and a mortgage professional if you need to obtain a mortgage. You will need to engage the services of a real estate attorney by the time you make an offer on a property as the attorney will assist in the negotiations and finer points of your offer. If you need to obtain a mortgage to complete the purchase, the seller is going to want to know that you have been pre-qualified or pre-approved for the mortgage.
When you have identified a property that you would like to make an offer on, your real estate agent will advise you as to what they think the market value of the property is so you can put together your offer. This is where the agent’s value to you really comes into play, because your agent is in the marketplace everyday and has access to records of recent sales in the neighborhood. There are no easy to follow formulas for determining how much you should offer on the property because every situation is different.
A good agent will know things such as:
-The seller’s situation
-How long the property has been on the market
-Is the property properly priced or overpriced?
The negotiation processOnce you have determined the amount of your offer, your agent will communicate the offer to the seller’s agent or to the seller directly if there is not another agent involved. As negotiations move along and the parties appear close to making a deal, a meeting of both buyer and seller, their agents and attorneys, may be called to work out the finer details of a deal. If you as the buyer are not able to be in Israel during this whole process and for the eventual signing of a “binding contract”, you will need to give your attorney a “power of attorney” to sign for you.
Before the final contract is prepared, your attorney will do research for you to make sure that any improvements that have been made to the property were done with the proper building permits and will also verify the ownership of the property in the Israel Land Registry (Tabu). This would also be the time that you hire any kind of professional that you would want to inspect the property if that is important to you. Provided everything is in order, the final contract will be prepared. When the contract is ready and you go to the attorney’s office for the “signing”, be prepared to bring your down payment or full payment depending on what the contract calls for.
A few other payments to take into consideration:
-Attorney’s fee (typically 1%)
-Agent’s commission (typically 2%)
-Possible purchase tax (0 to 5% depending on purchase price of property), which has to be paid before the property can be registered in your name.
Lyle Plocher is the Director of Buy Property In Israel and can be reached by email at lyle@buypropertyinisrael.com.