Brit’s guide to house-hunting in Israel
O WE V E R M A N Y T I MES y o u have bought and sold a home in the UK, purchasing a property i n Israel for the first time will i nvolve unchartered territory, as the whole real-estate, mortgage and banking scene operate very differently.
When you start looking for properties to buy, the biggest difference you will encounter is that the estate agent works for you — or, more accurately, for both you and the seller. While in Britain the seller engages the agent and pays the commission, in Israel both sides of the deal pay the agent. Often the same agent serves both buyer and seller.
This dual interest on the part of the agent makes it harder to choose the right person — a challenge that Sandi Ryker knows well. An estate agent herself until recently, she now runs My Israel Property, an independent consultancy which walks foreign buyers through the process of purchasing — and she often finds herself helping clients to ensure they are signing with a reputable agency. “When choosing an estate agent, look for someone with local knowledge and connections and make sure they have a licence,” she says. “You should feel comfortable with them and that they are honest and looking out for your best interests. You will need them to help you through the whole process, so a connection is important. How do you find them? The best way is to get recommendations from someone you trust.”
As well as selecting your estate agent carefully, “it is important to use other reputable professionals,” says Ms Ryker, “such as lawyers, inspectors and property managers who can help you manoeuvre your way through the process.
“They will make sure the property is built according to regulations and that the contract and registration are in order.” With Israel’s strict planning laws, this is important, to avoid problems in the future.
When it comes to looking for a mortgage in Israel, you will find that lenders tend to be more conservative than most Brits are accustomed to — this can be frustrating but their stringency helped Israel to weather the global economic crisis well.
Navigating the mortgage market as a new immigrant foreign buyer without a grasp of Hebrew can be difficult, so some househunters turn to mortgage brokers, who take a fee and do all the legwork.
This has its advantages but is not absolutely necessary, if buyers are prepared to learn a new mortgage system, find a bank branch that offers service in English and have the patience for the veritable scavenger hunt that banks call the tofes tiyulim — assembling the long list of documents needed to process an application.
“The banks in Israel are strict in their process of granting mortgages, requiring proof that you can finance the repayments,” says Ms Ryker.
“Foreign residents can approach a bank directly or with the services of a mortgage broker and make a request for the mortgage they need. There are different types of mortgages and there are branches that specialise in providing services to foreign residents, so you can shop around to find the best plan for you, based on your financial and personal situation.”
Foreign residents should find out about foreign-currency-linked mortgages — if their income is in sterling, it can be advantageous to have a mortgage that is tied to the rate of this currency, to hedge against fluctuations in the rate.
Standard Israeli mortgages have monthly repayments set in shekels, tied to the Bank of Israel’s lending rate or to the government’s cost-of-living index. Fixed-rate loans are far less common than in the UK but banks are starting to offer them — sometimes for the full amount of the loan and sometimes for part.
New immigrants to Israel have to set up a local bank account; foreign residents do not have to — but will experience complications if they do not.
Israel’s banking culture is very different from that of the UK — free banking is an unfamiliar concept and banks charge their customers for almost all services, at the counter, by phone or online. Credit-card services are less developed than in the UK, as are facilities for sending and receiving international transfers — so even people who are moving to Israel for good tend to maintain a foreign bank account in addition to their Israeli one.