How to Buy a Home in Israel

Buying a home in a foreign country can be a daunting task, especially when you're not familiar with the local real estate market and regulations. This guide aims to provide expats with essential information about buying a home in Israel. From finding houses for sale to understanding the legal requirements, we'll walk you through the process to help you make an informed decision.

How do I find houses for sale in Israel?

There are several ways to find houses for sale in Israel. Online property portals and real estate agencies are the most common sources. Websites like Yad2 and Madlan provide listings for properties all over the country. You can also hire a real estate agent who specializes in helping foreigners buy property in Israel. They can guide you through the process and help you find a property that suits your needs and budget.

Are there restrictions on foreigners owning property in Israel?

Foreigners can buy property in Israel without any major restrictions. However, properties in certain areas, especially those owned by the Israel Land Authority, may have some restrictions. In such cases, foreigners can still buy property through a company registered in Israel. It's also important to note that Israel has a leasehold system, where the state owns the land and leases it for a period of 49 or 98 years. Therefore, you're essentially buying the lease, not the land itself.

Does Israel have an MLS type system?

Israel does not have a Multiple Listing Service (MLS) like in the United States. Each real estate agency has its own listings, and there's no central database where all properties are listed. This makes the process of finding a property a bit more challenging, but a good real estate agent can help you navigate this.

Do brokers have licenses and how do I know if they are licensed?

Yes, real estate brokers in Israel are required to have a license. You can verify a broker's license by checking with the Ministry of Justice's Real Estate Appraisers Department. It's important to ensure that you're dealing with a licensed broker to protect your interests.

What documents are required when buying a home?

When buying a home in Israel, you'll need several documents. These include your passport, proof of address, tax returns, and bank statements. If you're taking out a mortgage, you'll also need a pre-approval letter from your bank. Once you've agreed to buy a property, you'll need to sign a contract of sale, which should be reviewed by a lawyer before you sign it.

Do I need a lawyer when buying a home in Israel?

Yes, it's highly recommended to hire a lawyer when buying a home in Israel. A lawyer can review the contract of sale, conduct a title search to ensure the property is free from liens, and guide you through the legal process. The cost of a lawyer can vary, but it's typically around 1% of the purchase price.

Do people typically buy a property with all cash or take out a mortgage?

Both options are common in Israel. Some people buy property with all cash, while others take out a mortgage. If you choose to take out a mortgage, keep in mind that Israeli banks typically require a down payment of at least 30% of the purchase price.

Are there inspections that take place, and if so what is that process like?

Yes, inspections are a common part of the home buying process in Israel. A professional inspector will examine the property to identify any potential issues, such as structural problems or necessary repairs. The cost of an inspection varies, but it's generally a few thousand shekels.

What are some of the pitfalls to avoid when buying property in Israel?

One of the main pitfalls to avoid is not thoroughly researching the property and the area. Make sure you understand the local real estate market and the value of properties in the area. Also, be aware of the leasehold system and the implications of buying a lease rather than the land itself. Finally, always hire a lawyer to review the contract of sale and conduct a title search.