• Amira Solow Advocate

Buying a Home in Israel? Wait Did You Think About these Preliminary Steps?

Updated: Dec 2, 2018

Buying a Home in Israel? Wait Did You Think About these Preliminary Steps?

By: Amira Solow Adv. & Notary

Whether you are buying your first home in Israel, upgrading to a larger home or downsizing based on your family’s needs, there are preliminary steps you should take before even making an offer. This will help you ensure that the purchase is executed in the most cost-efficient way taking into account many crucial factors.

1. When choosing your home, you must evaluate the price vis a via your budget, but you also need to take into account many variables such as location, community, schools, shuls and commercial areas. The “market value” of a home can fluctuate heavily based on very subjective factors that are important to individual buyers. A highly experienced broker can assist with relevant information to help you make a calculated decision.

2. Financing your home is probably the most crucial aspect of the purchasing process. Prior to agreeing on a price, sit down with a mortgage broker or a financial consultant and figure out both the capital you have as a down payment, and the mortgage you will be able to afford on a monthly basis, while taking into account your family’s monthly budget. If you do plan on taking a mortgage it is imperative you receive an initial approval from a mortgage bank “Ishur Ekroni”. If the transaction is not right for you- walk away!

3. Once your offer is accepted, it is advisable to hire an engineer to survey and inspect the property. Every house has it’s issues! However, it is always preferable to know what issues your house has (both major and minor) before spending your life’s savings on a home.

4. Proper legal assistance will provide you with clarity, guidance and peace of mind while protecting your interests. You should ascertain that the seller holds legal title of the property and see whether there are any existing mortgages or liens. Your lawyer will ensure that the seller does not receive the initial down payment until your rights in the house have been properly protected.

5. In addition, it is essential to perform an in-depth review of the legal state of the property. Many owners build additions to their house or have other construction done without obtaining the proper legal permits. This can be extremely problematic for buyers on two levels: Firstly, when taking a mortgage, an appraiser from the bank evaluates the property, however, only the legal areas are taken into account, which can cause the appraisal to be lower than the sale price, resulting in the bank offering a lower mortgage to the buyer. The second problem is that it may tamper the registration of the property in the buyer’s name. When obtaining a certificate from the municipality proving that all municipal taxes have been fully paid by the seller, the municipal inspector will note all additions and other construction that do not have the proper legal permits. Such irregularities will cause difficulties when trying to register the property in the buyer’s name. Addressing this issue in advance will be beneficial for both parties.

6. It is essential to do tax planning as early as possible. Israeli residents who are buying their first or only home are entitled to a discount on their purchase tax. New olim are also entitled to an “Oleh discount” when purchasing a home. There are other purchase tax discounts for a person with a disability or family of terror victims. Buyers may purchase a property for investment in addition to a residential home. Proper tax planning and determining the order of executing each transaction, can be extremely beneficial from a financial standpoint and will avoid having significant unexpected costs in the process.

And here’s one more bonus tip. The home you picked is in a great location but does it meet your family’s needs? Consulting with an architect or an interior designer who reviews the plans and technical specifications before purchase, can provide you with a number of alternative ideas to maximize the potential of the home and have it fit best to your needs.

Even if you don’t do all of the work initially you can plan to do it at a later stage.

In conclusion, performing basic inspections and receiving proper advice will save you time and money and more importantly will help you minimize the risks when entering into such an important and significant transaction.


Disclaimer: The information provided is of a general nature and should not be construed as legal advice. For additional information contact Adv. Amira Solow directly by email amira@solowlaw.co.il or phone 050-7435193

Amira Solow is a bilingual attorney with over 13 years of experience specializing in real estate and inheritance law in Israel. After graduating from the Law Faculty of Bar Ilan University, Amira worked in the field of real estate and inheritance law runs her own firm- Solow Law offices.