Buying an Apartment – A Step-by-Step Guide

The decision to buy an apartment in Jerusalem is not a decision taken lightly.There are many good reasons to buy an apartment however real estate is costly in Jerusalem and the fees and taxes can reach 8% of the cost of the property.So getting it right is important.
Here is a general guide on how to go about finding and buying the right property.

Deciding on location:

  1. Look to be close to your contemporaries – different peer groups tend to cluster in certain areas. The services in these areas will cater to your needs – and your friends will probably live close by.
  2. If you have difficulty getting about then avoid property at the bottom of the hill.
  3. Check out shopping, buses, schools, parks & synagogues.

Type of property:

To save time make a checklist of absolutely crucial features you require and communicate with your estate agent / broker – give him your list.Important matters include: maximum number of steps, shabbat elevator, balcony (succah), garden, whether you are prepared to renovate, if traffic noise really bothers you, parking, storeroom.

Once you have decided on the type, size & location it’s time to talk to the agent and ask about prices, mortgages and costs – take into account that fees and taxes will add about 8% to the price of the property. The agent should prepare a short list of property that matches your requirements. If after viewing ten properties you have not located a property in your price range then we suggest you review your requirements and compromise on one of those important features or find a way to increase your budget.

After a Decision:

Having decided on a property the first stage is to ask your agent to enquire about the legal standing of the property – there are occasionally problems, which the agent should be able to identify and qualify.

Be careful with property that is held leasehold directly from one of the churches -reject leases with less than 80 years remaining unless they are priced attractively.
The agent or your lawyer should check that the owner is the registered owner and that
parking spaces and storerooms are indeed attached to the property.

If there is an empty lot or a single story house close by ask your agent to check what the city master plan allows to be built there. Before starting negotiations obtain an estimate from a builder/decorator or interior designer as to the cost of any renovation you may require.


Usually negotiations are completed in a single meeting. A good agent/broker can usually break any impasse. Remember the agent/broker often represents both sides and must be evenhanded in his dealings.

Often we act as a go-between when negotiations proceed without the parties meeting.
We recommend that the negotiations progress in this order:

  1. Determine what is being sold. Property in Israel is sold with just the bare walls unless otherwise agreed. Appliances, light fittings, even fitted wardrobes and kitchen cupboards are sometimes removed. The agent must make an agreed list at the beginning of the negotiations.
  2. Determine when the property will be vacated. This is always after the final payment is made and can be any time from 2 months to 2 years according to the needs of the parties.
  3. Determine how payments are to be made and in what currency. In Israel deposits are not put down – we go immediately to a binding contract that contains penalties for non -performance. The usual first payment is between 30% -50%. The amount depends on any taxation due or whether mortgages or liens are registered on the property. The remainder is not usually paid until the seller has presented a certificate from the tax authorities that no taxes are due so that the title can be transferred. Some 15% to 20% is usually left to be paid when the property is physically transferred to the buyer. The number of payments generally relates to the amount of time between the signing of the contract and the date of occupancy.
  4. Determine the amount to be paid. We have noted that in most cases the seller expects to give a reduction of around 5% to 7%. When the market is buoyant this changes. Offer about 10% to 12% under than the asking price. Less than this and you are not considered “serious”. We would add that in this very “hot” market this rule of sum does not always apply with prospective buyers sometimes bidding against one another with occasionally a successful buyer paying above the asking price.
  5. Once having agreed on a price the matter is now passed to the Lawyers – needless to say do not sign anything without consulting with a Lawyer.

The Legal Stage:

This can be the most frustrating stage. Many lawyers are over worked and we advise contacting your lawyer every other day to check on progress and push things forward. A transaction can be completed in two or three days but often needlessly takes a month or more.


On signing the contract you must be ready to make a first payment and your lawyer and agent will present their bills. The agent’s job is finished however we at Capital believe in after sales service – we will be there with advice for you. Remember that there is Mas Rechisha (purchase tax) to be paid within 50 days of signing the contract

The process of buying from a builder /developer is somewhat more complicated however sometimes with a shortage of good apartments there is sometimes no alternative. Proceed with care and advice from a good lawyer, architect and always employ a supervisor to check the builder as the building process progresses. Be very careful fixing the technical specifications (take advice from your architect/interior designer) the builders can really take advantage costing any change or addition.

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