Real estate expert: Terrified of buying a home

Vol XXX: I am terrified of buying a home. What are the steps? Where do I go? What should I do?

October 10, 2007 18:19
Real estate expert: Terrified of buying a home

shelly88. (photo credit: )


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For Housing resources click here. A native new Yorker, Shelly Levine is owner and manager of Tivuch Shelly Ltd., a leading real estate company that services all of Jerusalem and its surrounding areas and specializes in English-speaking clients. Click here to send us your questions for Shelly, please include your name, city and country. * * * Volumes I-XV Volumes XVI-XIX Volumes XX-XXIV Volumes XXV-XXVII * * * Vol XXX Q: We want to buy an apartment in Israel for vacations now and retire there in approximately 10 years. We are thinking it would be best to pay cash for the apartment, even if it means refinancing our home here, which has a small mortgage, to pay for it, thus taking advantage of the tax deductibility in the US. Do you agree and also, please list the other expenses we will incur in the purchase. Our budget is $250-300,000. A: This plan makes sense. many people do it this way. We also have dollar-based mortgages in Israel that you pay back in 'green', which I believe can also be tax deducted in America. It's called a tourist mortgage, offered by every major Israeli bank. Additional costs include: if a new apartment, you will pay the builder's lawyer and your own lawyer (approximately 1.75% for builder's lawyer, and .5 to 1% for yours; one-time purchase tax, payable 50 days after you sign the contract, pegged to the price of the unit--runs between 3-5%.) Good luck. Q: I was thinking of purchasing an apartment in Tel Aviv as a non-resident foreign citizen. I read somewhere that most land belongs to the State and is leased for a 99 years. What does this mean in practice ? Does this mean that I could only "buy" an apartment for 99 years and/or pay land rent to the State ? Do I need to prove my Jewish origin (my father is Jewish) to be able to purchase an apartment in Israel as a foreign citizen ? A: Approximately 90% of Israel's land belongs to the public in perpetuity, through the government. The 99 years is automatically renewable when the lease period concludes. Why? To protect the ownership of the Jewish state's limited land. this arrangement is totally solid and not to concern you or anyone. There are laws that do pertain to Jews and non-Jews buying property in Israel. Check with your lawyer. Hint: It's more flexible on the  land that is privately owned than the publicly owned lands. Q: What mortgage assistance is given to olim who buy apartments in areas of national interest? How are they defined and where are they and how much extra help in given in each? Can you list those communities and the benefits for buying there? A: There are very few areas that today have special mortgage benefits for buyers. At one time there were many more. Please check with your aliyah shaliach for towns that might offer olim some special benefits. I know that Maaleh Adumim has some benefits for newcomers, and modi'in has some for South African olim, etc. The Jewish agency is the key player for these issues. Q: Firstly Shelley, I am truly one of your admirers.You do an outstanding job. Can you tell me where i can find the rules and regulations of vaad bayit, preferably in English. Cannot find a website. A: There are laws upon laws governing this can of worms known as vad bayit. It is important for you to contact a knowledgeable lawyer regarding any serious issues. otherwise, every locality has its own 'association for the protection of tenants' rights.' Call 144 for your local office's number. Good luck, they are there to help you. Q: We have been offered an apartment in Ramat Eschkol for US$300,000. It is on the 4th floor (top) without a lift. It is 71 Sq. M. Please could you tell us whether this is overpriced or not. Best regards & many thanks. A: To be honest, steps are a major factor in judging the value of any apartment not on the ground floor. Ramat Eshkol has become an especially popular (read expensive) community among the American yeshiva crowd. Availability is limited and demand is high. In my opinion the entire area, not just this one apartment, is over-priced due to the changing demographics. Q: I am considering purchasing an apartment in Bat Yam or areas around there. Two or three bedrooms. My daughter is a sabra and also an olah chadasha since she grew up in America, now living in bat yam. ideally a view of the Mediterranean would be nice. How much are down payments? As a new immigrant are there any advantages I can use for assistance? Thank you. A: I tell people when I am not so familiar with a specific area, and Bat Yam is one of these. But if you contact me at I will make the effort to connect you to someone whom I feel is better suited to assist you. Q: I am terrified of buying a home; we have money but in both dollars and shekels. 1. What is the first step, go to banks and ask how much we can get for a mortgage (we have no down payment)? 2. Should we go to the bank with a real estate broker to help us understand what the bank is saying (considering they speak"chines" it can be Hebrew or English we still wouldn't understand what is being said). 3. Then should we shop for a home in that amount that the bank is offering to give us? A: Don't be afraid. Acquiring a house is one of the best feelings you can have. A vast majority of Israelis own a home by their 30th birthday, and many of them are in more precarious financial shape that you, I'm certain. the key is to 'stake your claim' in an inexpensive, smaller apartment to begin with, in a newer area that will quickly rise in value. Then you have equity to work with in a few years to leverage into buying a better home. Even if it's in an area you don't want to live in, you can rent it out and use your rental income to carry your own rent where you do want to live. The winter is a good buying time as demand is considerably less during this period than in the summer. If you live in Jerusalem, I will be more than happy to accompany you to the bank and explain the terms to you. Q: I'm considering buying an apartment/condo/house in Israel for part-time residence and hopefully eventual aliyah. Would like a place close to the beach, not too busy but with good growth potential and good demographics (Anglo preferred, mixed religious/secular). Was thinking the area surrounding Netanya, but would like your advise as to where to look. Thanks. A: Netanya, Herzliya Pituach and a new project in Rishon Lezion on beach (new project) are your best bets for the criteria you mention. good luck! Q: We are interested in retiring in Israel and we have always been enamored with the community in Rosh Pinah, in part because of its proximity to Safed and in part because it seems to us to be cooler during the summer. Is there a ballpark estimate of what a 3-bedroom house would cost with a reasonably sized plot of land (1/4 acre), and what kind of taxes or other types of annual costs can be expected? A: Rosh Pina is a lovely area. I myself love the charming Metulla area, but to be honest, I'm a tourist in that region like you, not a Realtor. Call up the city hall in Rosh Pina or google them and you will get a list of reputable builders and real estate companies. That is your best starting off point. Q: Are there any places in Israel that you can get a 3-4 bedroom home for $50-$60,000? A: A very, very tough order. Perhaps in a small town in the Negev. The closer to get to the larger cities, the harder it becomes, so stick to outlying areas! Q: How difficult, and expensive would it be to buy some type of property, condo, townhouse etc. and rent it out. Are there agencies that would manage the property for a fee? And what are the real estate taxes for property like? Obviously I would want to have the property somewhere that rentals were common, possibly beach areas. A: There are terribly few rentals to be had in Tel Aviv, Jerusalem, Modi'in, Bet Shemesh and many other places. You will have no problem renting out whatever you buy. Local municipal taxes are generally low but they are paid by the people renting from you. You have no expenses on the property except for the mortgage payments if you have any. We at tivuch shelly have not taken any fee for renting out apartments, from either side. This is something we try to do to as a 'mitzvah' to help newcomers to the country. Q: If i was looking to purchase an apt. in the modi'in area with good views what area and properties would you recommend. and does it pay to purchase a larger apt. A: Modi'in is a fantastic area. We specialize in the buchman area. It's all about money. The range goes from private houses to apartments and terraced apartments, cottage and pent-cottages of all design and budgets. Every unit can be readily rented out for income and it's one of the very best investment/residential options in the country today. Good luck! Many options available there, not just mine. * * * Vol XXIX Q: What would be the best area to buy real estate in Israel with a view to rent it for a few years until we're ready for aliyah, with the hope that it would appreciate over the course of time? A: This summer in Israel, we had long lists of people arriving for whom there were no rentals available: Modi'in, Bet Shemesh, Maaleh Adumim amongst them. Nor are rentals so easy to find in Jerusalem or Tel Aviv these days. Therefore it makes perfect sense to buy something today and rent it out. If you like the neighborhoods that are attracting most of the English-speaking newcomers, you might be able to get your rental payments in US or Canadian dollars, and these areas are some of the fastest-appreciating neighborhoods in Israel today, value-wise. Q: I am looking to purchase a second home or apartment in Israel for vacations and summers and eventual retirement. I have 3 children  and am looking for a low cost, kid friendly environment.  I would be willing to start with a rental.  Please inform me - thank you! A: Do you want a community with many English-speakers (for the kids?) Do you have your heart set on the coast, or perhaps Jerusalem? How many rooms do you need? The farther you go away from the major cities, the lower the prices get. I would be happy to assist you further once I have the answers to these questions. Q: I made aliyah 3 years ago. I'm interested in buying a small apartment in Jerusalem for the investment value. Where can I find out more information about market prices in various Jerusalem neighborhoods and oleh benefits when it comes to getting a mortgage? A: Any bank that offers mortgages will be happy to tell you the full story about your rights and benefits as an olah. If you'd like to discuss various communities in the capital, my team would be happy to do so with you. It's about budget and about the kind of neighbors you are looking for. The center of Jerusalem is more expensive than Har Homa or Maaleh Adumim, for example. 4 rooms can run $190,000 in Har Homa, while in the city that size home would be hundreds of thousands of dollars higher. Q: Unfortunately, my parents bought a heftziba apartment without a bank guaranty. What can I do to maximize their chance of retaining the property? A: I hate to say this, but it amazes me that in this day and age, ANYONE would consider buying in Israel without a bank guarantee. The government of Israel passed laws decades ago to protect homebuyers in this country. It is impossible to get burnt buying an apartment on paper if you have a decent lawyer and real estate agent who have a moral obligation to abide by the law. I suggest you quickly get a good lawyer and get on line to claim your rights. I have a feeling there will be many people who are owed much more than the value of one apartment in this mess. Q: What do I need to know about purchasing commercial property in Israel? LTV the banks are financing? Average rates? Taxes upon purchase (VAT...etc).  Can investment income be partially offset by depreciation? Where can I locate a savvy and knowledgeable commercial real estate broker? A: Please write me a personal email with a few more details. I will be happy to connect you with a good commercial realtor, although that is not my specialty. Q: Hi, we recently spent a wonderful afternoon on the beach at Ashkelon. The view is breathtaking and there are apartments being built everywhere. We may be interested in purchasing one. Do you know their price range or how would one go about finding out the specifics? Also, my sister lives in Beer Sheva, would that be a good place to invest in an apartment? Thank you. A: Ashkelon and Beersheva are considerably less expensive than, let's say the Raanana or Netanya areas. I am not intimately familiar with these markets, but I do have reliable builders with whom I am associated who are building in them. Please drop me a personal line, and it would be my pleasure to connect you to them. Q: I have been letting out a flat in Jerusalem for the last two years at rental price of $840 per month. Any idea what this a fair rental price should be for the next two years? A: You are lucky. Jerusalem rental fees in the past two years have skyrocketed, in general. I suggest you ask around amongst real estate agents in the neighborhood of the flat what typical rental prices are. If the present tenants are good, pay their rent on time, and so on, I suggest it might be wise to stick with them and take only a modest increase. Sometimes security outweighs a slightly higher return on investment. Q: I am a 64 year old man. I am single. Relatively good health I also am semi-retired. I would like to entertain and inform myself in renting or buying. Your assistance will be sincerely appreciated. I am NOT looking for government assistance. A: It's a wonderful idea, but many of the key facts are missing. What part of the country appeal to you? What sort of neighborhood? What is your budget? Do you like the sea, do you like Jerusalem? Please feel free to provide further details, and I will gladly respond in kind. * * * Vol XXVIII Q: My uncle's sister passed away a year ago leaving no one to attend to her house in Tel Aviv. My uncle is an elderly man and really can't go to Israel for an extended period of time to handle all the paperwork of selling it. Is there a way to hire an honorable and trustworthy proxy or broker to handle all of this from the USA? A: I am sorry for your loss. The first thing to do, before finding an agent, is to find a good lawyer. He or she will explain to you all the laws governing such a situation. The definition of who is the beneficiary of the property might be different than it is in the US. The lawyer needs to file the appropriate paperwork and might have his own real estate agent to recommend to you. The most your uncle may have to do physically is to pay one visit to the nearest Israel Consulate to sign some forms. Good luck. Q: My husband and I have just returned from a wonderful vacation in Israel. We are very interested in investing in real estate with an eye to eventual retirement there within the next ten years. We would prefer new construction, close or relatively close to the coast, and within 30 minutes or so from Tel Aviv and because this will be a second home, around $500k. I have tried Internet searches to get an idea of areas that are within our price range and preferences but often, prices aren't listed. We aren't yet in a position to buy so I would feel guilty bothering an agent and wanted to look myself, but I am at a loss as to how to proceed. Any suggestions? A: There are many great options to meet your needs. My gut feeling would be to tell you to check out the Buchman neighborhood in Modi'in, 20 minutes from Tel Aviv with a new direct train line and lots of value for your money and people who suit you demographically. For that budget, you could readily afford to buy a villa, penthouse or large cottage. Your dollar will stretch far further here than, let's say, Raanana which is a similar distance but going north. If you prefer a smaller residence, there are many new luxury apartments in north Tel Aviv that are springing up today, all very special. Your budget would enable you to buy a 3- or 3-bedroom residence. Feel free to contact me for specific details if you'd care to, Q: Hi, all the apartments in my building have individual storage rooms on the ground floor. The last month I have not had any lighting in my storeroom. I have checked the globe and the electrical wires where the cables enter my storage area and there is no electricity supply. Despite numerous requests to the rosh va'ad to investigate and if necessary call in an electrician my pleas have been ignored. I am certain the power to all the storerooms comes from the foyer area making it a "common area". Besides withholding my monthly va'ad payment what can you suggest? Thank you A: This sounds like a pretty simple problem. Why not call in a private electrician and simply deduct the cost of the visit from your va'ad bayit dues? It will save time and you are legally within your rights. Q: If I sell my house: 1- What percentage of the sale will I owe in taxes? 2- Is the $15,000 Manach that we received on building this house transferable to a smaller house that we would build down the block in the same Yishuv? 3- I am legally 45% handicapped now (my leg). This is one of the reasons we need to rebuild. Is this something that the government would help us with financially? A: There are no taxes on selling (only when you buy). Usually there is no problem in transferring the grant ('manak'), because the new place is in the same area as the original one. Sometimes such grants are given to purchasers in specific areas to encourage people to move there. But if you're staying there, I can't think of any problem. On the handicap issue, you must visit your local Bituach Leumi office and inquire as to any specific rights or entitlements. These issues are pretty clearly spelled out. Good luck. Q: My family and I are considering returning to live in Israel. We are interested in buying a new property in kfar tavor. Are there any websites that we can check out? Thanks. A: Get in touch with the Municipality of Kfar Tavor as your first point of information. They will happily refer you to other knowledgeable sources. Every town and moshav in Israel knows what is being built in their area. We hope to have you back in Israel soon…good luck. * * * Cafe Oleh experts have been chosen for their knowledge and reputation. Cafe Oleh does not take responsibility for any advice they offer. Click here to send us your questions for Shelly, please include your name, city and country.

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