Foreigner's guide to property market: The search begins

A new real estate column: Property expert Lyle Plocher gives advice and tips for those from abroad looking to invest in Israeli property.

By LYLE PLOCHER
June 20, 2011 12:10
3 minute read.
Exterior of property sold by Re/Max vision J'lem

Exterior of property 311. (photo credit: Courtesy)

There is obviously a lot to learn for someone who is considering the idea of purchasing property in a foreign country. In addition to learning about the buying process in that country, you as the potential buyer will have to think about the following issues:

-Legal and tax considerations
-Mortgage sources,
-“Out of pocket” finances required

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And after all is said and done, you will want to know that you made a wise purchase decision. 

What are you looking for from your property?

Before you start searching for properties for sale in Israel, you will want to determine your actual housing needs and establish the amount of money you want to invest. When setting your budget for the purchase, if you are not in a position to pay cash, keep in mind that currently the maximum you will probably be able to borrow for your purchase will be 60 percent of the value of the property. 

Armed with your housing needs criteria and your budget, you can begin your property search. There are many Israeli real estate websites in English so you will not have a shortage of places to look for potential properties. These days, the majority of Internet users would start their search by going to Google and typing in a search phrase such as “Israel real estate” or “Jerusalem real estate.” Of course, there are numerous search phrases you could use depending on how narrow you want your results to be. If you already know the neighborhood you want to live in, you could search for “apartments for sale in Rehavia” for example. 

Finding the right agent

Unless you read, write and speak Hebrew at a respectable level, one of your goals as you begin your property search should be to find a reputable English speaking real estate agent. Finding the right agent may take you some time so don’t be discouraged if you have to go through the process of elimination to identify an agent that you feel comfortable with. The things that should be important to you when identifying the right agent should include:

-The timeliness in which they reply to your emails
-The amount of information they provide you about properties you have inquired about
-The degree in which they are willing to help educate you about the buying process

A good real estate agent can guide you each step of the way throughout the buying process, advising you, negotiating the best deal for you, referring you to an attorney, mortgage professional and other needed professionals. The most prevalent amount charged for Commission by real estate agents in Israel at this time is 2 percent of the purchase price. In Israel, the buyer and the seller each pay their own agents. 

Be careful where you sign

There are a few things to keep in mind when you actually arrive in Israel to view properties:

-First, before a real estate agent in Israel will show you a property that is “for sale”, the agent will ask you to sign a “Request for Real Estate Services” form.  This is basically a commission agreement, between you and your real estate agent, which Israeli law requires agents to have completed. The agreement establishes the commission rate agreed upon and identifies the properties the agent will be showing you. 

-Secondly, because the majority of property owners in Israel do not give “exclusive listings” to real estate agents, you may have seen the same property advertised by more than one agent. Be sure that you do not sign a “Commission Agreement” with two different agents to view the same property or you could risk obligating yourself to paying a commission to each agent if you actually went through with a purchase on that specific property.

This should give you some basic guidelines for conducting your property search.

Lyle Plocher is the Director of Buy Property In Israel and can be reached by email at lyle@buypropertyinisrael.com.


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