Standard down payments can be broken into three payments: one third at the signing, one third three months later and one third upon receiving the key.





Standing on a busy Tel Aviv sidewalk, I didn’t need a phone to hear the yelling of a client calling from New York, asking: “What do you mean I have to pay twenty to thirty percent of the cost of the apartment four months before I take possession of it? Are you telling me the seller is going to get $100,000 of my money to use for his own benefit and I still don’t get anything? Unheard of!”



 There are many differences between buying a property in Israel and abroad. One of the more difficult differences to accept is the issue of down payments. Unlike in most countries where you pay for the house and receive a key on the spot, in Israel you pay for the house and may not move in until later--much later.



A major reason for the delay is that properties are sold even while they are inhabited. The resident of the property, often the seller, usually needs time to move. He may have not even purchased another home and may need to find one--a process that takes time. Receiving the key can take between three to six months and sometimes longer, even up to a year.



Some foreign buyers don’t mind the wait and actually use it for their benefit, like when they don’t yet have all the funds or are not ready to move. However, most don’t like paying a substanial down payment that does not even go into an escrow account but into the pocket of the seller. 



Standard down payments can be broken into three payments: one third at the signing, one third three months later and one third upon receiving the key. Alternately, they can be broken into four payments: twenty percent at the signing, thirty percent two months later, thirty percent two months after that and the rest on receiving the key. Of course all payment schedules are a matter of negotiations.



Buyers need not worry about risking the down payment as long as they conduct the deal with a lawyer. The buyer’s lawyer ensures the property transfer by filing a “warning notice” (he-erat azhara in Hebrew) with the land authority. This will immediately register the buyer’s name on the property deed so that the owner cannot back out of the deal or sell the property to someone else.



So while some buyers are taken aback by the issue of down payment, they should know that they are protected legaly and can rest assured that the down payment is going towards a very valuable investment in Israel.

Baruch Finkelstein is an owner/broker of Remax Center in Jerusalem. The office is in the shopping center of Ramot and Baruch has agents that service all of Jerusalem.

cell: 972-545-251-219

office: 972-2-586-9980

[email protected]

www.remax-israel.com/center