Things You MUST KNOW Before Buying an Off-Plan Apartment

Things You MUST KNOW Before

Buying Off-Plan Apartments

(These are the thoughts of Ben Levene, CEO and Director of Sales at CapitIL Real Estate)

There are a few crucial things that you should be aware of when buying an apartment off-plan. This is not all you must know, but some of the important points.

We will follow this up with a second blog soon of other considerations. I am happy to discuss this in great detail with anyone considering buying off-plan.

Importance of a Project Manager/Designer

When you buy off-plan, you do not receive the keys to a gorgeous brand new apartment without caring about the process. There is an entire middle stage of the process that people tend to forget. This is why it is crucial to hire a project manager or designer.

Here are some of the ways a project manager/designer will help you:

• Work with the builder throughout the project so everything is planned out properly

• Working on the apartment plans including the electric, AC, and lighting plans

• Check up on the builders throughout the process

• Explain specifications before signing and discussing upgrades you should or should not take

• Communication throughout the process to ensure everything is to your liking

Without hiring a project manager or designer, the likelihood of receiving what you thought you were paying for is very slim.

It is especially important for foreign buyers to have someone in Israel to make sure everything is running smoothly. 

Due Diligence Before Purchasing

Doing your due diligence is crucial when buying any apartment, but even more so when buying off-plan.

Make sure you use a specialist real estate attorney to help you through the process and negotiate the contract for you. Before signing the contract, the attorney should go through the major things you must know when buying off-plan (for example what guarantees and protections you will or will not have). The lawyer's role here is crucial!

Here are some things to check before buying off-plan:

• Make sure you understand the location

• If they say it comes with parking/storage, make sure your lawyer confirms it is in the contract and where the parking/storage is located in relation to the apartment

• Make sure your lawyer explains to you about the building index.

There have been significant improvements to protect buyers in terms of the building index so make sure you are up to date with the new laws.

Payment Plans

With off-plan purchases, payment plans have a significant impact on the deal as your budget may change based on the payment structure.

If you know you have 24 months to pay 50% of the property, that can be crucial to your decision whether to purchase or not.

Your lawyer has to explain if there is inflation linked to the payment plan and how that will work, but having the ability to make flexible payments (this is something your broker and lawyer will negotiate before signing) can be a dealbreaker.

Conclusion

There are no contingencies when purchasing off-market properties.

Once you have signed the contract, there are no outs. If you cannot come up with the financing or if you decide it is not the apartment for you, you still are contractually bound.  That is why you must do proper due diligence before signing the contract.

Please make sure to consult your team of professionals to ensure you make the right decision for you. This blog is to explain the importance of doing proper due diligence.

Contact CapitIL Real Estate Agency.

See available Jerusalem real estate here and new development projects here.