So you’re going to buy property in Israel. Wonderful! You are about to enter into a process that will take several months to complete. But what happens in these months? Why does it take so long? What are the steps? What should you look for?
Not every day one buys property. This is a big deal especially in Israel, with implications for the future. Therefore, before running to sign the contract, it is important to act responsibly and wisely this is why you need in Israel a real estate attorney.
The preliminary examination of the property is the first and most important action prior to entering the deal. You should make sure before making the fateful decision that you are not buying a pig in a poke, but well aware of all the relevant variables regarding the designated property. For those who are not experts in the Israeli real estate market hiring a local Israel real estate attorney is not even an option it is a must.
Inspection of the property and surrounding area
Before making a decision about buying real estate in Israel, you should visit at least once or twice to absorb as much information about the apartment and feel the environment and the dynamics of the neighborhood. If you cannot do this yourself then have someone you trust do this for you. This will help you to determine the quality of the property you are considering buying.
After all, we do not want to get excited a property and hurry into a deal it only to later find out that the road is too noisy, the surrounding is dirty, there is a large cellular antenna near the and the like.
Therefore, before signing a contract to purchase the property, have it a well-tested and examined from every angle to check the physical condition of the apartment, as well as its immediate surroundings.
It is always recommended even find out the contractor who built the building and try to get information about his reputation, quality of construction, problems and claims of construction defects, etc. (there will be places that purchases are willing to pay 5% to 10% or more of the normal price for an apartment built by a contractor considered reliable).
Knowing the right price – How much does an apartment in the area really cost?
You can get information on transactions made in the region by block and parcel numbers on the Israel LandTax Authority official website in recent years to get the estimated prices in the neighborhood. Also, you can use the site madlan.co.il which provides much information about the building and the area and the transactions made in the last years. This information can assist you in managing negotiations regarding the price of the transaction. Unfortunately, these websites are in Hebrew so have someone who knows Hebrew assist you with that.
The Land registrar office in Israel (tabu)
A land registration office extract is a valuable document, which serves as a kind of identity card for the property. You can get your hands on one online (again only in Hebrew). The information on the extract is by block and parcel numbers. An exact address can help you find the exact block and parcel numbers online. This can be done for any property registered in the land registration office. This document can tell us the legal status of the property. Of course you should consult a real estate attorney in Israel in this matter because there could be important information about the property that can make or break the deal/
Just as you would not buy a used car without a trial, let alone before buying a home, or any other real estate property, you should examine real estate property with great care. Such screening can save you complications, risks, and give you peace of mind.
Today, you can hire a variety of house inspection services; engineering companies engaged in home inspection and structure audits (cost is negligible compared with the price of the property) who provide a professional opinion and is impartial. Such inspections will assess the physical condition, the facilities and the various systems, flat construction defects, deficiencies in planning, engineering permits, building condition, nuisances (noise pollution, crime, cellular antennas, etc.), and more.
Asset Real Estate Appraisal
It is possible and at times mandatory when taking a mortgage from the bank to hire the services of a qualified real estate appraiser who will evaluate for you (or for the bank) the real value of the property, and assist you in making an informed decision regarding the economic viability of the real estate property. Also, real estate appraisers should make necessary tests required in special cases. Legal and bureaucratic complication can be avoided when you hire the services of an appraiser.
The matter of building violations is a field that appraisers can alert the buyer of. Construction deviation is in fact a criminal offense that local authorities are not forgiving about. The existence of such violations can affect the value of the property, usages, problems in obtaining a mortgage, as well as fines, demolition, additional charges of taxes and betterment levy from the local authority, and a variety of troubles that acquires not want to encounter.
Mortgage loans in Israel
If you plan to finance part of the acquisition of the property with a mortgage loan, it is advisable to conduct preliminary tests of compatibility with the lending bank and obtain a document called a principal advanced approval regarding the obtaining of a mortgage loan, before signing the purchase agreement, in order to avoid surprises and / or further problems on this subject of the mortgage. Problems in financing the deal could easily kill a deal and cause unnecessary costs on both sides.
It is important to know, real estate contracts today usually include a clause whereby the non-receipt of a mortgage and / or delay by you, for whatever reason, do not constitute just cause to cancel the contract. Therefore, in case the bank did not approve the mortgage, you are exposed to a higher risk and may fall into a situation of material breach of the agreement, with a real possibility for payment of an agreed upon financial compensation in favor of the seller under the agreement due to the breach.
If the seller still has a mortgage on the property you can know that by looking at the Land Registry Office extract. It recommended and acceptable to ask the seller for the loan balance and see that indeed the mortgage payment will be settled with the payments. Usually it is customary to ask the seller for a document (an official hard copy) of the bank regarding the approval of the settlement of the mortgage balance that hangs on the property.
This is an important issue, since you will be interested to know when and how the seller intends to remove the mortgage. Will he do so by way of a repayment, or by dragging the mortgage to another property? This may have relevance also for your payment schedule as part of the deal. All these matters should be taken care of by your Israel real estate lawyer.
Before buying an apartment or a house, it is important to examine the sketch located at the Land Registration office (including a sketch of parking spaces, warehouses, etc.). The sketch is actually the design requirements regarding the flat in terms of the area, boundaries, internal division, extras and the like. Inspecting the sketch will help us make sure that the space and attachments are indeed compatible with the proprietary rights recognized in the Land Registry
The local authority and municipality
The engineering department of the local municipality in whose jurisdiction the apartment resides is a useful source to review important information regarding the building. Inspecting the purposes and uses, permits and more gives you a clear view of the property status. If the building does not match the approved building permits in the portfolio, there may be irregularities which could be problematic.
The local authority may also examine the issue of a charge for a betterment levy. In this context, it should be noted that, generally, the levy applies to the seller, but it is important that the buyer be aware of the issue in advance (including a legal mechanism to introduce a suitable contract, which will ensure improvement tax payment by the seller.
These are the main preliminary inspection and precaution one should take when entering a real estate deal in Israel. There are many factors to consider and one should not try to steer theses unfamiliar water alone and without a proper guide.