REAL ESTATE PURCHASE PROCEDURE
IN CAESAREA, ISRAEL
Caesarea Estates Realty offers this essay for informational purposes only, and in no way suggests this replace consulting with your legal advisor nor do we accept any responsibility as a result of this document.
Although each deal is unique with regards to contract terms & conditions, the following is a general description of the standard purchase process in Caesarea.
- Once you have located a property you desire, you submit an offer to the seller and negotiations begin. This offer is made up of several parameters to be considered. (Your agent should guide you)
- Be aware, unless otherwise agreed by both parties, Israeli law permits sellers to negotiate other offers up to the contract signing moment. Only signature on contract validates the transaction. There are chances that the home you are negotiating may be sold to a 3rd party while under negotiations with you.
- Payment terms are negotiable and the initial down payment at contract may be significantly higher than you may be accustomed , with balances due as agreed by the parties. Possession dates may be farther off into the future, as well.
- Once the core terms of the deal are agreed, including price in shekel/$, payment schedule & possession dates, contents included in the sale, etc., these details are forwarded to representing legal council. Seller’s attorney normally drafts the initial contract and sends this to buyer’s attorney for comments & approval. The attorneys will discuss legal language and refer to you for any transactional/financial issues. This process normally takes 5-10 business days.
- Althought there are “standard contracts” and “widely utilized terms”, each and every contract may include any term as long as both parties agree on such a term. Unless otherwise agreed, once contract is executed, common practice will not include any contingencies in order for buyer or seller to back out without penalty. (i.e. home inspection report or non-approval for mortgage). There is no “3 day attorney review” . Therefore it is recommended to secure attorney approval on contract language, a home inspection and adequate funds prior to contract execution.
- “Closing day” in Israel is the date of contract execution.
Once the contract is signed and an initial deposit is paid, the buyer’s attorney will be responsible for placing a lien or “warning” in buyers’ interest on the home (usually performed within 24 hours of contract signing) by registering this on the property title at the Israeli Land Authority ( Tabu ) or whichever legal body is considered trustee for this property. This guarantees the seller is unable to financially manipulate the property in any way until this lien is released by buyer, in accordance with the terms of the contract. In return for this lien, the deposit may be paid out to seller rather than held in escrow. If there are title constraints/issues such as mortgages, outside liens or foreclosures, these initial funds may be deposited in escrow and utilized to pay off these obligations prior to paying seller. - In Caesarea, each transfer of ownership will require the physical inspection of the property by the township engineer. This inspection will match the most recently approved blueprints/plans with the current structure to confirm it matches approved square meterage & floor plan. Any deviations from this permit will require attention and remedy prior to transfer of ownership.
- From this point, both sides will perform their obligations according to the terms of the contract.
- Once all funds are paid in full, whether possession is taken or not, the buyer’s attorney will continue the title work in order to complete the transfer of ownership. This may take up to 8 months from contract signing.
- Estimated closing costs: (between 5 -12 % of contract price)
There are several costs that are optional in the purchase such as:
Home inspection (structure, systems, pool, defects, etc) 3000-7000 nis.
Surveyor- confirming plot & building position- approx 1500 nis.
Mortgage appraiser if desired/required by mortgage bank- 4000-8000 nis.
Interior design & architectural/contractor estimates for renovations- varies by vendor
The following are required costs:
Purchase tax charged by Israeli Tax Authority – up to 10% of contract price, payable within 50 days of contract execution. The actual amount is calculated based on contract price, applicable exemptions, buyer’s resident status, etc. Your attorney will provide exact amount to your specifications.
Transfer of Ownership paperwork fees in Caesarea – approx 1200 nis
Real estate agency fee due from buyer (if agency is utilized to close deal) at 2% + vat, payable within 7 days of contract execution.
In Israel the attorney for buyer, in addition to negotiating legal contract issues, acts as the “Title Agency” and is responsible for title search and registering ownership on behalf of buyers. Attorney fees range between 1/2% to 2% + vat- of contract price, depending on complexity of transaction. Payable based on agreed terms with attorney.
We hope this document assists you in navigating the real-estate purchase process here in Caesarea. We are quite sure you will have many more questions and concerns as you progress.
Always at your service
Dror Kaminer
Caesarea Estates Realty.
www.kaminer.co.il