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The Way to Buy Real Estate in Israel

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The process of purchasing the property is more or less the same in most of the countrieas. You need to understand why you need a foreign realty, decide the type, look for a particular option and check everything before making any payments. But the devil is always in the details. Do you need to sign a presale contract? Do you need lawyer's help or you can seal the deal on your own? How many payments do you need to make? Find the answers below.

Step 1. Reserving and checking the property

You have chosen a property you like and agreed on the price with a seller. It is time to reserve it, so that nobody else can buy it before you. To do so, you have to sign an agreement (הצעת מחיר בלתי חוזרת לרכישת נכס) and pay a deposit in a size of 1-10% from the total price. 

Lawyers have mixed feelings about this document. The main issue is that you sign it before making a check of a property. Therefore, it has to contain details of canceling the deal. For instance, if you are not sure in the conditions of a mortgage loan, then you need to add it to the document as aт argument for cancellation. It is not easy to make an exhaustive list of possible grounds, and this agreement is legally binding for the court.

Besides, after the signing the required period for reporting your real estate transaction to the Tax Department begins to count. And if you signed it top early, you might not have enough time for checking of the deal. 

That is why we do  recommend to sign any documents only at the presence of your lawyer. Knowing the details of the transaction, they can offer better ways to secure the property and save the deposit. 

It is necessary to conduct a detailed check of the legal purity of the property before signing the main contract of sale, whether it is the rights of the owner to dispose of the property, any debts on the property, owners of the land and other important circumstances.

Step 2. Concluding the contract of sale

The contract is usually concluded at the office of the seller’s lawyer. Only the seller and the buyer supposed to sign it. According to the Israeli law, you do not need to notarize it, because a notary in Israel can apostille a sign, but not the validity of the contract. 

Both sides can hire one lawyer. If the deal isn’t conducted between close relatives, then it is safer to hire a lawyer to each side of the contract. 

The contract contains legal details, such as ownership rights and their transfer, payment schedule, fines for cancellation, the condition of the property and the date of transaction. 

After the signing, both sides also make a document, that allows buyer to send a “warning note” to the Registry. This note guarantees that nobody can make any operations with the property until the process of selling is finished. Banks especially demand it, when the mortgage is involved. 

After signing the contract it is customary to make the first payment in the amount of 10-30% of the real estate value, depending on the agreements between the parties.

Also read: Buying Property in Germany: How Does It Work?

Step 3. Making a payment 

Banks in Israel have tightened their requirements in recent years. A foreigner can open an account in an Israeli Bank and transfer money to it for subsequent payment of the transaction. The second option is to transfer money from your account in your home country to the trust account of a lawyer, who, after complying with the terms of the contract, will send it to the seller. In any case, the Bank may require confirmation of the source of origin of funds or, for example, a certificate from the Russian tax service stating that there are no debts.

The terms and stages of depositing funds are specified in the purchase and sale agreement. Payment is made in Israeli shekels, so you need to take into account the currency rate.

You must also pay all taxes on the purchase, after which the new owner can be registered.

Haifa, Israel

Step 4. Registering ownership

After the final payment you receive the keys and can use the property, but that’s not the end of the transaction yet.

The lawyer must register the new owner in all state registers. This process is not fast, it can take up to 9 months. But the you need to make sure that the lawyer completes the case.

To ensure correct registration of your property, you can split the lawyer's fee into several parts and transfer the main payment after receiving an extract from the register.

Can I seal the deal remotely?

Remote purchase of realty in Israel is possible. However, some documents must be issued directly in Israel. For example, a lawyer must be issued a notarized power of attorney, which gives them the right to perform all necessary legal actions and sign documents.

Quoting conditions of Prian materials

Tags: Israel, Buying procedure, Market Analysis, Real Estate

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The Way to Buy Real Estate in Israel
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