"My big takeaway for anyone who wants to buy or sell property in Israel is to study realtor price quotes carefully, and not to close a deal before consulting with a real estate appraiser," says Shai Avraham, an appraiser with 13 years experience. "Real estate appraisers are the sole authorities in Israel qualified to assess property values – but more than that, they are the ones who study all additional aspects of a transaction to ensure that it is carried out under the law".
There's more to a deal than pricing
According to Shai, Israeli realtors generally play a more limited role than their American and European counterparts; their responsibilities do not extend beyond connecting buyers with sellers and promoting transactions.
But that isn't enough.
For a transaction to be successful, three main issues have to be examined or verified: proper legal registration, the existence of a building license, and current/ plans for the site. Should a complication arise with one of these parameters, the property is problematic, and its acquisition should be reconsidered.
The only person qualified to conduct this investigation is a real estate appraiser duly licensed by Israel's Ministry of Justice. "A real estate appraiser is obligated to assess properties with complete objectivity and is not motivated by interests of any kind," Shai explains. "He's the person who functions as your eyes, who goes to the property and verifies its status.
Suppose you live abroad but are involved in an Israeli real estate transaction. In that case, he'll vet the property for you, so there'll be no doubt about the deal's legality, feasibility, and appropriate pricing".
Real estate pricing is not a matter for amateurs; it should be done using the professional tools of the appraiser, who knows how to perform an accurate weighing of all of the relevant data and adjust them to the property.
Correct pricing takes the following into account: information about past transactions; market fluctuations and the situation in real-time; property size, type, and location; whether there are additional building rights; and municipal urban renewal/redevelopment policy that could cause the property to appreciate or depreciate.
"When determining prices, it's not enough to make random comparisons between properties that are similar on the surface or to retrieve data from real estate databases," Shai notes. "That's because there are a great many features that can make a major difference in pricing that reasonable people, and even realtors, aren't aware of".
A successful transaction starts with an appraiser consultation
Israel is unique concerning land ownership. Most of the country's land essentially belongs to the state, meaning that the contract and applicable state restrictions must be scrutinized in any real estate transaction.
It is the real estate appraiser who requests all of the relevant legal documents and studies them. The appraiser obtains the building plans from the municipal engineering department and verifies that the records are consistent with the present owner's attestations, Including: current and future building rights, zoning restrictions, the property's physical condition/damage, the existence of demolition or property seizure orders, and more.
"I know of a great many hair-raising cases where real estate transactions were concluded without appraiser consultations, causing tremendous damage to the buyers, estimated in the thousands or even millions of shekels.
For example, someone bought a 100-meter apartment, found to his astonishment that 70 meters had been built without a permit, and had to tear them down", Shai continues. "In another case, someone signed on the purchase of a property that was being used as an apartment, at the market price of an apartment. When he wanted to get a loan from the bank, he found out that the property wasn't registered in Tabu as residential but rather as a storage space, meaning that the deal had been made at a significantly higher price than the property's actual value.
"Not long ago, there were media reports of someone who sold an apartment for 1.6 million NIS, then found he had to pay 3 million shekels in taxes to the municipality, as the property had building rights for a 30-floor residential tower.
All of these people could have avoided the distress and the financial damage by simply having a real estate appraiser perform the appropriate comprehensive assessments before they signed what they probably thought of like the deal of a lifetime".
Don't settle for less than the best
When we want to buy a used car, most of us will take it for a thorough inspection at a certified automotive repair shop. When a real estate transaction is at stake, and when the buyer doesn't live in Israel, having an objective real estate appraiser performed a comprehensive assessment is a must.
Shammai HaBayit [The Home Appraiser], under the direction of real estate appraiser Shai Avraham, specializes in consultations for private and business clients in Israel and abroad. The firm appraises real estate properties, including residential buildings, parcels, industrial buildings, stores, offices, and more.
"An appraiser's assessment is like an insurance for the property. Many people mistakenly think that if the transaction was signed with a lawyer, they're 'covered,' but that's not true. Although a completed transaction is one involving the realtor-lawyer-appraiser trio, the attorney doesn't carry out the assessments or physically visit the property to verify its existence and legal status," Shai says. "Nor do realtors bear any responsibility, and they're motivated by an apparent interest in selling the properties; sometimes their information is mistaken or biased, or based solely on what the property owner told them.
"My years of experience, regular monitoring of legal and regulatory developments and reforms, and the in-service training I pursue both privately and through the Real Estate Appraisers Association in Israel give me a broad systemic perspective".
Shai has all the professional tools needed to help any Israeli or foreign buyer make a real estate deal that's surprise-free, transparent, and worthwhile both in terms of the property itself and in terms of the price while maintaining objectivity throughout the process.
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