Each person has a different list of priorities when searching for their Jerusalem home. Sometimes, however, it seems like a client has found the perfect home that fits all their criteria, and yet they seemingly find every reason not to buy that apartment.
Let me explain what I mean by this.
Let’s pretend you are a client looking for an investment opportunity. You have been looking for an apartment for a while, and are aware that there is not much available on the market. Finally, you come across a listing that you like. It ticks all boxes—sukkah balcony, parking, storage, elevator, no need for any work, comes with furniture, has tenants, approaching a 3% return and next year it will be even higher—why would you not buy this apartment? What stops people from pulling the trigger and jumping in on a great opportunity?
Make sure that you have a lawyer as you start your property search. Speak to your broker, family and friends for recommendations, and talk with each lawyer to see who is the most suitable for you. A lawyer is vital at the very beginning of your search since you may need advice along the way. Subsequently, figuring out how you will be signing the contract is crucial. Are you flying in a few days before to sign in person? Are you getting a family member or your lawyer to sign on your behalf? If you are planning to use the power of attorney, getting this done in the beginning is crucial to ensure that you can jump on any opportunity that presents itself. If you delay, you can lose out on the apartment you would like to purchase. If you are planning on taking a mortgage from the bank, get pre-approval early in the process to guarantee that there are no holdups in the deal due to getting approval. Pre-approval on a mortgage can also help you understand a better framework for what your budget should be.
Sellers are rarely going to negotiate significantly on price. Why? Because the sellers believe that if you do not buy their apartment, someone else will. There is no shortage in demand and there is so little supply. Some people bring a valuer to properties they are trying to buy. A valuer is someone from the bank who confirms that the property is worth what you say it is to receive your mortgage. Some people, even if intending to pay in cash, bring a valuer to the property because they think if the bank values the property at a lower than the asking price, they can negotiate with the seller into dropping the price. Bringing in a valuer is important in regards to obtaining a mortgage and checking permits. It is something that I definitely think is valuable, especially if you are taking financing, however, do not expect that it will have any real effect on the ability to negotiate the purchase price.
Some people manage to find lots of little things that are wrong with an apartment. For example, the balcony only seats eight people and they want to be able to host 10. However, they are unwilling to expand their budget. You will never find a perfect apartment. You can find perfectly nice apartments that tick most boxes. The Jerusalem real estate market is not about winning and losing. Finding the right apartment for you is about balance and being realistic with your expectations. The sooner you buy into the market, the lower the prices will be. The longer you wait, the higher the prices will be. Do not try to beat the system.
Do not rush into signing on an apartment, but if you see a good opportunity, after consideration, jump on it, negotiate in good faith and complete the proper due diligence and legal work. The biggest piece of advice I can give is to not have unrealistic expectations when it comes to negotiating prices and finding the “perfect deal.”
By Ben Levene
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]