The Significance of Doing Your Due Diligence Correctly
So, you've been on the lookout for an apartment in Jerusalem for quite some time, and finally, you believe you've found the perfect one. You're eager to proceed with the process, but at the same time, you want to exercise caution and ensure your own protection.
Which experts should you involve, and what roles do they play in the process?
First and foremost, it's important to do all your due diligence thoroughly. However, while conducting your due diligence, you must bear in mind that the seller may not be willing to wait indefinitely.
The typical timeframe for the due diligence period ranges from 2.5 to 3.5 weeks from the moment you reach a preliminary agreement. Consequently, it becomes crucial to ensure that different aspects of the process progress simultaneously rather than consecutively.
The primary expert you should engage is a lawyer. Your lawyer will thoroughly examine all contracts and agreements, ensuring that all legal obligations are documented in writing, thereby enabling the smooth progression toward closing the deal.
They will also coordinate with other experts involved in the process. For instance, if you have specific concerns about the balcony, such as ensuring an unobstructed view, your lawyer is the one who would suggest the right professionals and recommend the involvement of specific experts.
This underlines the significance of your lawyer since they will play a pivotal role in determining which additional experts are required. They will inform you about the commitments outlined in the agreement and those that are not.
As a broker, I'm more than happy to provide multiple lawyer recommendations, as it is ultimately the client's decision to consult with these professionals and select the one whose approach aligns best with their needs. Seeking recommendations from friends and family is also advisable. It's crucial to engage a lawyer who specializes in real estate.
If you intend to borrow money from a bank and are concerned about securing the necessary funds, it is vital to enlist the services of a mortgage broker.
They will assist you in obtaining pre-approval and a property valuation. Remember, once you sign the purchase contract, there are no contingencies, so ensuring your ability to make the payments is essential.
One person whom both I and your lawyer should recommend involving is a property inspector.
In the case of newly constructed properties, you may also consider hiring an architect/expert to review the specifications and plans. Understanding any issues with the apartment you would like to purchase is crucial before you are locked into the deal.
Another major consideration is how you plan to convert your money into Israeli shekels. Whether you choose to use your bank or an intermediary currency transfer company is up to you, however, the latter option should offer additional assistance with navigating bureaucratic processes and lower transaction rates.
It's important to arrange this from day one, as any delays in payment can be problematic. It is crucial to understand how and when payments will be due before purchasing.
There is one expert whose involvement may be required depending on the situation, and it's a decision you should discuss with your lawyer at the beginning of your due diligence.
A planning expert can provide valuable assistance with permits, assessing the legality of existing structures, forecasting future construction in the area, and determining whether your desired views may be obstructed.
If preserving a specific view is crucial to your purchasing decision, the expertise of a planning expert becomes essential, as they are uniquely equipped to provide you with the necessary assurance.
They will examine zoning regulations, prepare comprehensive reports, and offer a crucial understanding of the current and potential developments in the vicinity, including any legal intricacies associated with the specific property you intend to purchase.
These are the main experts I highly recommend involving in the due diligence process. There are certainly other roles to consider, and as mentioned earlier, your lawyer will provide specific recommendations based on your circumstances.
Remember, once you sign the purchase agreement, there are no contingencies. Your attorney should effectively manage this process and ensure that you involve all the necessary experts and fully comprehend every aspect.
Your broker should collaborate with your lawyer to coordinate the schedules of all the experts involved, ensuring that they are working within a reasonable timeframe to maintain the smooth progress of the deal.
If a serious issue arises during the due diligence process or if the seller exerts an unreasonable amount of pressure that hampers your ability to conduct necessary checks, don't hesitate to step away from the deal.
When your attorney informs you that your contract is complete, be sure to obtain a synopsis or direct translation in English so that you can read and understand the document thoroughly. If you have any questions, don't hesitate to ask!
All queries should be addressed before signing because raising concerns afterward may be too late if there are aspects that don't align with your preferences. The most important takeaway from this is to seek guidance and trust in your experts to ensure the process is handled correctly.
(This article is not data-based but rather based on Ben Levene's personal market experience and opinions. No decisions should be made without thorough due diligence and professional financial advice.)