The Israeli property market is evolving rapidly. But for many Israelis, the word “luxury” doesn’t quite mean the same as it does to Americans and Europeans. That’s why realtors urge home buyers to shop carefully and seek professional advice.
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“Israelis think of luxury as apartments that are a little bit nicer – an open kitchen with an island and real hardwood floors – they get very excited about this,” says Matthew Bortnick, from the Maki Group of real estate brokers. “For people coming from the United States or Canada, hardwood floors are definitely not a luxury amenity. Electric blinds are par for the course.”
Israel lacks American-style title insurance that guarantees a prospective buyer against a purchase going sour. “If someone says he is selling you 200 square meters, and it turns out it is only 150 square meters, you have protection,” says Shia Getter, who has written a book explaining the ins-and-outs of buying a home in Israel, “Everything You Need to Know About Buying Real Estate in Israel.”
In Israel, Getter says, you (or your lawyer) have to check the land registry (tabo) yourself.
He also warns about price increases when you buy a home that’s still under construction or in planning. Because prices are linked to the consumer price index, buyers should be prepared to pay more on future installments than the original price. Buyers are expected to cover the contractors’ legal fees, although recent changes to the law have capped this at 5,000 shekels, he says.
There are also cultural differences foreign buyers have to adjust to. “In Israel, everything is negotiable,” says Getter. “People who aren’t used to the open market aren’t used to this type of negotiation.”
Buyers should also pay close attention to the exchange rate if they’re bringing money from their home countries. Bortnick says he’s had clients who conditioned a contract written in shekels on the exchange rate hitting a certain level. “People try to lock in rates, especially those paying from dollars or sterling,” he says.