Buying Property in Israel?

Have you been sitting on the fence, looking at real estate in Israel but not yet taken the plunge? It could be that your hesitancy is working to your advantage. No guarantees of course. In this business, the real estate landscape can change quickly. But, in a very interesting Globes article interviewing Avi Tiomkin, a consultant on international hedge funds, real estate prices in Israel are declining, and in time, the prices you see on the market will more accurately reflect reality. According to Tiomkin, the prices we see now are a result of the combined efforts of Israeli banks and developers to keep prices higher, but Tiomkin believes this scheme is coming to the end of its life.

Tiomkin points to a number of indicators, such as a significant drop in housing sales, especially in the luxury market, a tremendous slow-down in demand by overseas investors and speculators, and a soon-to-be influx of new housing stock on the market. He paints a potentially gloomy picture too, depending upon the actions or inactions of the Ministry of Finance and the Bank of Israel. I am sure both will do everything they can to keep the real estate market in Israel strong.

Bottom line: we are entering a true buyers’ market. Should you sit it out longer? Maybe, but it could also be that the scenarios Tiomkin paints do not materialize, or are short-lived. It can also be that while you sit it out waiting for prices to fall further, someone else comes along and grabs your dream home. We suggest a little of both. Be careful about checking the market, doing research on comps, getting a second opinion on the true worth of the property and then jump in.

private home in safed, israel

private home in safed, israel

 

Nine Things You Should Know Before You Buy Property in Israel

IMG-20160731-WA0009Great you are ready to buy a home in Israel. You have found the dream house or apartment, negotiated a good price and are ready to sign on the bottom line. The real estate lawyers over at Epstein & Company suggest that before you take this last step, you beware of these nine very important facts. It will save you a lot of headaches and heartache down the road. For their in-depth discussion please go to their website:

  1. Zichron Devarim, or Memorandum of Understanding. If you are in America, a Memorandum of Understanding or Intent to Purchase is a commonly used document that signifies you are serious about purchasing the real estate. In Israel, this is a legally binding document, even though it expresses an intent to prepare a sales contract at a future date. Avoid this. Instead, visit with a competent real estate attorney who will prepare all of the legal documents necessary to conclude the sale, while protecting your interests.
  2. Taxes. In a previous article we discussed some of the common tax consequences involved when purchasing real estate in Israel. Before you sign the sales contract, be sure to consult with a competent authority so that you have a thorough and up-to-date understanding of what your tax obligations will be, and what loopholes, if any, might be available to you.
  3. Heytel Hashbacha or Improvement Tax. This is a tax burden borne by the seller, who must pay for an increase in value between his purchase price and his selling price due to improvements made to the property or assessments by the municipality. Oftentimes this issue will come into play when discussing the price. If you find out in advance what will be his improvement tax, it could be that this can be used in your offer. There are creative ways to work out the sale so that the seller’s tax can be lessened.
  4. Debts at the Municipality. Once the sale is completed, your name will be written in the legal records—Tabu. In order to do this, all outstanding bills must be paid by the seller. Your lawyer is responsible for completing all the necessary documents and checking to ensure that the property is clean of debt. Typically, a portion of the sales proceeds is held by your attorney until he or she receives verification of the property’s debt-free status.
  5. Mortgage. If you are applying for a mashkanta, or mortgage, be sure to do this before you sign a contract of sale. In Israel, the contract is the last step in the process of purchasing a property. Once you sign, you are committed to the sale and to making the payment. If for some reason you should not receive the mortgage or receive less than you thought and you cannot follow through with the purchase, you will find yourself facing penalties for breach of contract.
  6. Nesach Tabu. This is an important document that your attorney should obtain before you even begin discussing prices. The Nesach Tabu will indicate if there are any liens, foreclosures or additional mortgages. It will also confirm that the property was correctly registered to the seller. It is not unusual to find yourself already into the purchase process only to find out that the property was never transferred from a previous owner, sometimes generations ago. This means that the seller does not have the legal right to sell the property to you. It is not difficult to make the changes, but depending upon the circumstances, it can be time-consuming.
  7. Future Plans. If you are buying a home in Israel, especially in a new community, or one where there are lots of empty lots, it is wise to go to the municipal planning office and ask about the future development plans of the neighborhood. Do not take the seller’s or real estate agent’s word for it. They may not actually know what is on the books in the planning office. If you are buying a second hand apartment, that has been renovated and includes additional space, you will want to confirm with the municipality that all construction was done with the necessary permits. This is especially critical if you are using a mortgage to purchase the property.
  8. Visually examine the property. If you are purchasing real estate in Israel from abroad, then in addition to asking for expert photos and a video, do your best to find someone on the ground who can inspect the property for you. In Israel, property is sold as is. Better to know in advance what needs fixing than after you have paid for the home. Further, if you have a list of repairs, it can help you with negotiating a lower price.
  9. Real estate lawyer. All sales of property in Israel require a lawyer. Unlike in other countries, real estate agents cannot conclude a sales contract. We recommend that both parties to the contract utilize their own lawyers, who are competent in real estate law. Your real estate lawyer can sign all the necessary documents for you should you not be here to sign the final purchase contract and other documents.

Tips for Buying Property in Israel

חזית הבית (1)Ready to Buy Real Estate in Israel?

Some Tips to Help You Find Your Perfect Home

Part One: A Brief Overview of Israeli Housing

Nothing can be more exciting than coming home to Israel. B”H, today it is easy, just contact Nefesh b’Nefesh, pack up and get on the plane. Okay, there are some small steps in between, but making Aliyah is nothing like it was in the past, when you had to travel by boat or camel, for months at a time, risking your health and life to arrive in the Holy Land. If you come on an Aliyah flight, you need only settle into your seat, go to sleep and wake up with your teudat zehut in your hand!

Before you make Aliyah you most likely will make a pilot trip to Israel to scope out communities, schools, economic opportunities and get a sense of how it is to live in the Land. The most important decision you will make is where to live. The answer depends upon a number of factors, but this article, the first in a series, iy”H, focuses on the Israeli real estate landscape. In future articles, we hope to give you a brief overview of Israeli cities and communities and important tips for making that very important real estate purchase. So, let’s begin.

Israel is small

All of Israel is only 21,946 square kilometers! This means that no place in Israel is far away. So, if you have friends or family in Yerushalayim, but you want to live in the north, no problem. Commuting is easy!

Geography

The country is divided basically into five areas: North, Center, Jerusalem, South and the Negev.

North: Northern Israel displays gorgeous, rugged terrain and diverse topography climbing up mountain peaks, swooping into valleys, and scaling the rocky coastline. Here you will find the regions of:

  • Upper and Lower Galilee
  • Northern coast
  • Northern valleys (Jezreel, Hula, Beit She’an and Jordan)
  • Zevulan Valley
  • Haifa Bay
  • Golan Heights

The major populations centers are in and around Haifa, Tiberias, Afula, Safed (Tzfat), Acco, Nahariya, Beit She’an, Hadera, Carmiel, Zichron Yaakov and Kiryat Shmona. The northernmost city in Israel is Metulla.

Center: Most Israeli’s live in the Center, which includes Shomron and the Coastal Plain. Here you will find the cities of: Tel Aviv/Yaffo, Petach Tikva, Bnei Brak, Ramat Gan, Netanya, Holon, Herzlia, Hod HaSharon, Ramat HaSharon, Kfar Saba, and Hadera.

The Jerusalem area includes of course our capital city of Jerusalem, plus also its surrounding cities of: Beit Shemesh, Ramat Beit Shemesh, Givat Ze’ev, Ma’aleh Adumim, Modi’in and Kyrat Arba.

South: The south region is home to the southern coastal cities of: Ashkelon, Ashdod, Rishon LeTzion, Gedera, Rohovot, Kiryat Gat, Nes Ziona, and Kiryat Malachi.

Negev: Lots of new residential, commercial and government developments are taking shape in the Negev, a stunning region of deserts, cliffs and seas. The Negev region is home to: Be’er Sheva, the largest city in the Negev, Ofakim, Arad, Yerucham, Netivot, Eilat and Mitzpe Ramon. Within this region is the Dead Sea and Red Sea.

While the majority of Israelis choose the Center or Jerusalem regions, many find the less populated, more affordable and more scenic peripheral areas to be more attractive. If you visit these regions today, you will see a tremendous amount of new growth as more and more communities begin to dot the landscape.

telavivnightAre you city or country?

Urban living

Within the urban centers, you can find new and resale homes to suit every need and budget. Unlike overseas, apartment-living is the norm here and the average apartment size is much smaller than what you are used to. The typical Israeli apartment is around 120 square meters. Apartments are described by the number of rooms, which includes the total number of bedrooms and the salon, or living room. The kitchen and bathrooms are not included in the total number of rooms. So, if you see an advertisement for a 4-room apartment, this means that it has three bedrooms plus the living room. Most apartments have balconies, called a mirpeset. Some are suitable for your succah. All apartments constructed after 1991 must have a safe room, called a mamad. Do not be surprised by the number of older apartment buildings that have no elevator—the famous “walk-up” is alive and well here. Israel receives a tremendous amount of sunlight and we have learned how to harness that energy to save on utility bills. Most apartment buildings have both solar (called dude shemesh) and boiler-heated water. Some older buildings offer only heating by electricity. Air conditioners are standard, called mazgan, and depending upon where you choose to live, you will find that in the summer it is pretty much impossible to live without one.

Residential buildings are governed by a va’ad ha’bayit, or residents’ management committee. There are some older buildings that do not have a va’ad, and the residents themselves accept responsibility for maintenance and cleaning. However, where there is a va’ad, usually the building is better maintained. Your va’ad fee will cover the cost of cleaning, maintenance of elevators, if they exist, and maintenance of the building and grounds. The newer the building, and the more elaborate the amenities, the higher the va’ad ha’bayit monthly fee.

Golan_Heights_-_Gamla_viewOf course, a city may not be to your liking at all. No problem, Israel also offers a number of rural options: yishuv, moshav, and kibbutz. Each community offers a different kind of communal living experience, ample land, and variety of housing in peaceful and quiet settings. The communities are organized into regional councils that have oversight over education, cultural activities and healthcare. Many rural communities are located near to cities, giving you the best of both worlds.

Moshav: Moshavim began as agricultural communities, where residents earned their income through agricultural activities such as farming or ranching. All residents received land for their home and land for farming. Today the moshav has evolved into more of a bedroom community. Residents earn their livelihoods from a variety of sources, most recently, from tourism, successfully operating very popular zimmers. Very few moshavim are engaged in agricultural businesses. On the moshav, your home and the land upon which it sits belongs to you, but the land of the moshav belongs to the state. If you wish to live on a moshav, you must pass a rigorous interview process by the receiving committee, by the regional council and also pass a state-administered psychological test.

Yishuv: A yishuv is basically a bedroom community. The main focus it to maintain the country-like feel of the setting, with only single family homes, on large lots and the same educational and cultural services you would find in the city. You can purchase land and build your own home (there are community standards) or find many second hand homes of various sizes. There are no entrance requirements or interviews.

Kibbutz: Kibbutzim helped formed the foundation of our modern state of Israel. Today, though, not many kibbutzim still operate as they once did. In general, the kibbutz is a collective, meaning that all residents share in the work of the kibbutz and in the income. There is private and communal living. Kibbutz residents own the homes, public areas and the commerce of the kibbutz. Educational, healthcare and cultural services are provided by the kibbutz. Kibbutzim today primarily make their income from tourism related activities, very few are still engaged in agriculture or manufacturing. Also, due to an aging population and lessening of popularity, many kibbutzim have opened up their membership to include new residential areas that exist somewhat separate from the original kibbutz cooperative. Potential residents must pass an interview process and conform to the norms of the kibbutz, each one having their own character. Where the kibbutz has decided to sell land to developers for the purpose of new homes, these residents are not a part of the kibbutz cooperative and do not need to pass the acceptance committee.

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Hopefully, this brief overview will give you some simple tools for deciding where to buy property in Israel. Future articles, iy”H, will discuss:

  • purchasing land in Israel for building and the steps involved in building your own home in Israel
  • types of property registration
  • the process of purchasing real estate in Israel, from within the country and from abroad
  • renting a home in Israel

To stay up-to-date on future posts, be sure to click the “Follow” button and add your email address.

Please visit our “hot property” pages, like us on Facebook and look us up when you come to Israel to begin your property search.

Dreaming of Living in Israel? Buy This Amazing Private Home in Safed, Israel

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It will be difficult to find a more luxurious, dreamy home than this private villa in the heart of the Old City of Tzfat, near to ancient synagogues, the Artists Quarter, kever of the Holy Ari, plus more of this Holy City’s religious and historic attractions.

The house covers 350 sq meters, plus a 50 sq meter courtyard, has two balconies/terraces, four jacuzzis, seven to eight bedrooms, depending upon how you utilize the space, spacious living and dining rooms, large, kosher kitchen (plus a second kitchen), radiant heating throughout, marble floors, luxurious interiors and upgrades, and all the special charm of the old houses of Safed. Oh, yes, and the views…awe inspiring! This property is sure to fulfill your every dream about living in the mystical, Holy City of Safed. $3.5M

Israel Real Estate Prices Back on the Rise

Buying property in Israel?

The price lull is over, so now is the time to buy your property in Israel.

Many potential home buyers sat out for a while, waiting for the proposed 0% VAT proposal to become law, but since it failed to materialize, at least for now, properties are once again flying off the market. This means that it is again a seller’s market, prompting savvy home buyers to move forward with their plans to buy an apartment in Israel or any other residential real estate.

According to a February 18, 2015 Globes report, apartment sales increased by 22% in the 4th quarter of 2014, for a total of 8,200 new apartments, the highest amount since 2002. However, this spurt in sales was not experienced in Tel Aviv or Jerusalem, but in periphery locations.

Northern Israel continues to be the best place to plant your capital, whether it be buying a home for living or investment. The prices are going up, as is the case all over Israel, but in the Northern Israel real estate market, you can still find a good deal.

Consider this one:

IMAG1268

 

Private house
140 sq meters
2 gardens
2 terraces
3 bedrooms, 2 full bathrooms
minutes from the Kinneret (Sea of Galilee) and city center
surrounded by synagogues
in one of the most desired neighborhoods of Tiberias

only 900,000 NIS

In the center, this house would be at least three times as much. Contact us today to find out more about this property and other outstanding real estate deals in northern Israel.

Buy Affordable Real Estate in Northern Israel–Beat the Crowd!

Now is the time to purchase your home or investment property while the prices are still affordable. Already in the center of Israel sales are flying like hotcakes and the prices are soaring. You can still find affordable real estate in Israel in the beautiful northern communities such as Tiberias, Safed, Migdal, Yavne’el, Nof Kinneret, and other moshavim in the Galil. But, it will not stay this way for long. Contact us today at weidner.dvorah@gmail.com and let us help you find your new home in Eretz Israel.

Real estate market sources tell “The Wall Street Journal” that a wave of immigration will heat up Israel’s already hot market.

The Jewish Agency estimates that 10,000 French Jews will immigrate to Israel in 2015, after 7,000 reached Israel in 2014 due to growing anti-Semitism. In response, Tel Aviv real estate market sources have told “The Wall Street Journal” that the potential French Jewish immigrants will further heat up Israel’s already buoyant property market where home prices have doubled over the past seven years.

“January and February are not usually very busy periods because of the winter,” said Eric Toubiana, a co-owner of the Comacom Group brokerage based on Tel Aviv’s Ben Yehuda Street. “But ever since the period of Charlie Hebdo, we’ve had a huge amount of work.”

Toubiana told “The Wall Street Journal” that his business partner had flown to France to deal with all the extra business.

“We are seeing prices that have been resilient to the fact that they are way out of sync with incomes in Israel,’’ said Chaim Friedman, the founder of First Israel Mortgage, a mortgage broker. “In part, that’s due to foreign demand.”

“There’s no doubt that the prices here are expensive, according to every measure,’’ IBI-Israel Brokerage & Investments Ltd. economist Shai Azar told “The Wall Street Journal.” “On the other hand, you have a low interest rate, high demand, and everything that is going on in Europe only adds to the demand. I don’t see a change in the trend in the short-term. But nothing rises forever.”

Published by Globes [online], Israel business news – www.globes-online.com – on February 4, 2015

Buy this beautiful Property In Tzfat (Safed)

IMG_4122Here is a great opportunity to buy a spacious home, with the most incredible views you can find anywhere in northern Israel, plus a zimmer to bring you a little extra income, or quite a bit of income, if you decide to run it as a business, or use it as a guest house/place for the in-laws when they come to visit. If you are looking to buy property in Tzfat (or Safed), then this is the place for you! The views in front of the home are incredible, with ABSOLUTELY nothing to block them, not now and not ever. The location feels like you have left the city of Tzfat and gone to the mountains, yet the house is only 10 minutes from the center of the city. Visit our Hot Properties in Tzfat page for details and contact us today to make an appointment to see this house, and other properties in northern Israel. If you are looking to buy property in Israel– in northern Israel–then we are your one-stop source for all kinds of properties. We look forward to working with you.