What I’m about to say will make some people very, very uncomfortable, especially those people who have purchased property with a real estate broker!
Who hasn’t told a real estate broker, “Tell them I’ll give them up to $1.7 million but really I’ll go up to $1.85?” The numbers might be different in your case, but when a broker asks you what the true maximum price you are willing to pay, you are likely to answer because you feel that the broker is on your team.
Here’s breaking news: He’s not! In order to make the deal happen, and to make the seller happy, it’s more than likely that he will tell the seller, “They say a million seven, but I can get them up to $1.85.” After all, he wants to make a deal happen…because unless it does, he’s working for nothing.
Buying real estate sounds complicated, especially when compared to a relatively “easy” thing to do like getting on a bus from Malchei Yisrael Street to the Kotel, even if you don’t speak a word of Hebrew. However, once you’ve been bitten by the ‘buyer’s bug,’ and you seriously start looking around at what is available, you suddenly become aware of the flood of information and the sheer number of people with whom you’ll need to interact in order to make a transaction happen–people from all walks of life and various backgrounds and cultures.
When buying real estate in a new country, a very important weapon to know about is Buyer’s Brokerage. This is a service which gifts you, the buyer, with power in your arsenal. It is someone whose interests are totally aligned with your own. It means that his earnings are not commission based; that he is not affiliated with the seller, or the lawyer, or the bank. It protects you and guides you. As someone who has completed hundreds, if not thousands, of real estate transactions, a buyer’s broker helps ensure that you stay grounded at all times and don’t get pressured or pushed around by people trying to take advantage of the “greenhorns” who are clueless as to what is and is not traditional and acceptable. And while it may seem expensive to hire one in the $5000-$7000 range, the savings you can ultimately achieve are often several times that amount.
Someone has to keep an eye out for problems in the property and the transaction’s important points. Without someone in control, things can fall between the cracks of the nine (or often even more!) different people involved in a purchase; the buyer, seller, real estate broker(s), mortgage broker, bankers, lawyer(s), architect, inspector, bank(s), and inspection company.
Whether it is the inspection company that needs to undercover the nicely repainted mold problems, or if there is enough water pressure in the apartment to enjoy a normal shower (this depends on the height of the dira and the water table in the area) or many other things buyers fail to think about. There are hundreds of important points that can be skipped over, but they may eventually cause aggravation and headaches.
It’s also important that someone checks on the attorney (a “mashgiach” of sorts) who verifies the apartment belongs to the seller, and that the apartment is in accordance with local zoning; makes sure that the attorney checks the entire apartment to insure that all of it is legally registered–if a portion of it is built on land not properly registered as a legal part of the apartment, it can devalue the apartment, be condemned, and even torn down by the city. There must also be a structured payment schedule according to the needs of the buyer, even to amending the contract to include the things that were discovered by the inspection company.
If a buyer’s broker has done other deals with the same developer, he can also insure that your contract will include the extra goodies negotiated by other buyers–which you’d never know about when going at it alone.
One of the reasons people ask me to represent them is so that there is someone they trust making sure that all the i’s are dotted and all the t’s are crossed–someone who lets them sleep at night because they know they are in good hands.
If you or someone you care about is planning on buying real estate in Israel anytime soon, clip this article out and give it to them. You could easily save them much grief and aggravation by making sure they are on top of the things that so many buyers, sadly, miss and then regret.
Shia Getter is the CEO of the Shia Getter Group, a full-range real estate services firm in Jerusalem catering to the Anglo investor. He is a noted expert, columnist, and author of Everything You Need to Know About Buying Real Estate in Israel. He and his professional team manage many upscale Jerusalem properties and have helped countless people buy, sell, and renovate property in Israel.
By Shia Getter