Real Estate – To the House of My Dreams

### Real estate transactions: buying or selling apartments and houses Real estate transactions, buying or selling apartments and houses, are usually the most significant transactions a person makes in their lifetime, both in terms of the financial amount of the transaction and in terms of the importance of the property. Our goal here is to provide you with basic information about what is involved in buying an apartment: – Highlighting important points in negotiations when purchasing an apartment. – Knowledge of basic concepts in the world of real estate. During the explanations in the chapter, we will mainly refer to buying a new apartment, because the pitfalls in this case are more complex: more sophisticated sellers, long construction and approval processes, etc. – but we will also deal with buying a used apartment, and in the event of differences between the cases, we will indicate what is relevant to each of them. **Linguistic note:** Throughout each chapter, we will refer to an apartment that is not new – a second-hand apartment, but the words are true, of course, for any used apartment from any hand. In addition, throughout the chapter, for convenience, we have used the word apartment, referring to any immovable property intended for residence – including a private home. It is important for us to emphasize that buying an apartment has many legal implications, and therefore the entire process must be accompanied by a lawyer on your behalf. ### Good morning: Buying an apartment! The first rule that is important to memorize before purchasing a real estate property is: **Caution!** – In a real estate transaction, significantly larger sums are at stake than in any other transaction. – The technical details, professional specifications related to construction specifications to various tax laws, are things that are not so familiar to us from everyday life. – Above all: the heartache and sadness in cases of failure or problems are greater than those that would arise if we were screwed when purchasing a television, for example. This means not saving time, not saving money where necessary, not accepting things as they are, not believing the contractor and certainly not the sales representatives on his behalf, most of whom work on sales commissions, so their knowledge of marketing is greater than their knowledge of real estate. ### Who do you buy from? A new apartment seller can be a developer company (building itself or through a subcontractor), a private builder, or a broker. In recent years, apartments can also be purchased as part of an urban renewal program (known as TAMA 38 or evacuation/construction), and also through purchasing group organizers. These two topics will be explained in a separate chapter. A developer construction company can be public, government, or private – very large or small. So many entities try to sell us apartments, and the identity of the seller is of great importance. When we buy an apartment that is still in the construction process and in fact begin to transfer payments to the seller even before we fully enter the property, we always take on a certain amount of risk: Will the contractor manage to finish the project? And if he succeeds, will he fulfill all his commitments? And what about the quality of execution? Therefore, factors such as the reliability, experience, and reputation of the building contractor are extremely important. Cheap and tempting deals offered by small, unknown parties in the industry should be examined with great suspicion and caution: It is possible that all the savings on paper in the cost of the property will be caught up in serious problems as the project progresses, from non-completion to serious defects in construction. Companies or even private, but long-established and well-known contractors also have an advantage in terms of financing. A real estate project always involves a very high cost on the part of the developer and the operator. Most construction companies use bank financing for the project. This is usually a closed framework that guarantees financing from the bank even if the building contractor runs into difficulties. The bank examines the contractor’s financial capacity and pledges the initial funds generated by the project in its favor. In such a case, the bank provides the buyers with a sales law guarantee that guarantees that in the event that the contractor does not complete the construction, the bank will do so in their place. A sales law guarantee is enshrined in law, and therefore it is important to make sure that “our” contractor is protected by such an option.

There are other things we must check: First of all, is the building company also the seller? This is not always the case, and then the two factors must be checked separately. In any case, one should always find out whether the building contractor is legally registered in the Contractors’ Registry, and if in doubt, one should demand a certificate from him showing such a company approval. It is advisable to contact the Israel Builders Association separately and check the contractor’s past: what is his seniority in the industry, whether there have been complaints against him from buyers in the past, and so on. It is also recommended not to be lazy and check buildings and projects that the contractor has carried out in the past, and ask the tenants in them questions about the nature of the contractor, the quality of the work, the timeliness, and the service provided after the property is delivered. ### In conclusion, a little advice: We are about to do an injustice to many honest contractors who have left behind thousands of satisfied customers, but…. Always remember: contractors, salespeople, and brokers are, after all, **traders.** Sometimes, due to the familiarity that is created with the contractor or salesperson during the relatively long accompaniment of the project, and due to the friendliness of the latter, a false sense of friendship is created. Make no mistake – they are not your friends. They are real estate traders, and there is nothing wrong with that, and in essence they are no different from salespeople in any other field. Take this into account.