A CRUCIAL DIFFERENCE
When Buying in Israel VS America
(These are the thoughts of CapitIL Real Estate Agency Sales Director Ben Levene.)
There are many differences between purchasing real estate in Israel and in America.
One of the most crucial and often unknown facts about the process of buying in Israel is that there are nearly always no contingencies upon signing.
In America, from my basic understanding, contingencies regularly exist based on factors such as inspection and finance (presuming the contingencies are in writing).
In Israel, once the contract is signed, you are contractually bound, and in nearly all situations no contingencies exist.
Let’s look at how this affects you and the steps you must take to ensure a successful signing.
How This Affects You
There are two main factors that need to be dealt with before signing a contract in Israel: Bringing in an inspector and organizing your finances.
The role of the inspector in Israel is to ensure that there is no significant damage to the property that would stop you from buying it. For general issues, the seller generally will not drop the price even if the inspector makes a report.
If you only bring the inspector after signing the contract, you will not have an option to pull out of the signed contract. As you can see it is essential to inspect before you sign a contract. It is also important to speak to the inspector to understand if the issues can be easily resolved or not.
The other crucial factor that must be dealt with before signing is your finances. All your finances should be in order and your mortgage must be approved (if you plan on taking out a mortgage) before you sign.
No one checks up on you, but if you cannot come up with the funding you will in most cases be in fundamental breach.
Therefore, it would be highly ill-advised to sign the contract and be stuck trying to figure out your finances after signing.
The two keywords to remember when purchasing Israeli real estate are NO CONTINGENCIES.
The system in Israel is very different from the system in America. This is not something to be worried about, but rather something to be aware of.
You must deal with it properly, do your due diligence, and hire the right people to help you get the job done properly before you sign the contract.