Purchasing a property in Jerusalem is an exciting endeavor, but it’s crucial to be well-informed before diving in.
Here are some essential things you must know before buying real estate in this vibrant city:
Determine Your Affordability
Understand your financial capacity before starting your property search. As an American or foreign resident, the standard maximum borrowing limit is typically 50% LTV (loan-to-value) of the property.
Although some specific circumstances might allow for more, it’s unwise to assume this. To avoid disappointment, never proceed without at least getting pre-approval on your financing.
One significant difference between buying in America and Israel is that there are no contingencies when you sign a contract in Israel.
Once you sign, you’re committed. If you later find out that you cannot qualify or take a mortgage or discover hidden defects, it becomes your responsibility, not the seller’s.
To protect yourself, make sure you have a strong team in place who can guide you; a mortgage broker and lawyer who will give advice on bringing an engineer or inspector and potentially an appraiser to assess the property before signing.
Act Swiftly in a Competitive Market
The Jerusalem property market is highly competitive, especially in prime areas like German Colony, Baka and Rechavia.
Desirable properties attract multiple interested buyers. If you come across a property that checks all your boxes, don’t wait too long to try and move forward, but make sure you do not skip proper due diligence.
Acting quickly and sensibly is key to securing the right opportunity in Jerusalem’s fast-paced market.
Understand Currency and Financial Processes
When making an international purchase, be aware of currency exchange rates and the process involved in transferring funds.
There are qualification processes and anti-money laundering checks that apply, regardless of your financial standing.
Familiarize yourself with the rates, as they can significantly impact your purchasing power.
Avoid Presumptions and Seek Expert Guidance
Never make assumptions about the property you intend to buy.
Conduct thorough research, especially regarding legalities, before legally committing yourself.
Your attorney should engage proper experts to conduct checks and appraisals.
These professionals will ensure the property’s legality, zoning, and planning status, providing you with a clear understanding of your investment and potential risks.
Conclusion: A Positive Experience Requires Consideration And Expert Guidance
In conclusion, buying real estate in Jerusalem can be a very positive experience, but it requires careful consideration and expert guidance.
Engage an experienced realtor familiar with the market, and ensure your attorney specializes in Israeli real estate with the knowledge to protect your interests throughout the process.
With the right team and thorough due diligence, you can make your dream of owning property in Jerusalem a reality.
This article is based on the opinions of CapitIL Real Estate CEO and Co-Founder Ben Levene. Ben Levene is a Jerusalem real estate expert with over 10 years of experience, specializing in helping Anglos purchase real estate in Israel. To start your Israel property search, please contact Ben at +972-53-822-4336 or [email protected].