Building a Budget
So, now that you’ve figured out where you want to buy, you need to figure out how to make that possible – and that all boils down to your budget. For that, you’ll need both dollars and lots of sense; after all, budgeting is not just about the apartment’s ticket price, it’s also about calculating for the other expenses involved, from realtors’ and lawyers’ fees to upgrades, renovations, mortgage rates, inflation, and more. Pre-sold apartments, purchased prior to construction, can sometimes be costlier than anticipated, due to building-material price increases, delays, and other factors.
To avoid unexpected budgetary developments, plan to spend 17-19 percent more than the apartment’s ticket price. Go ahead, say “ouch” now, and then breathe a sigh of relief, recognizing that working this into your budget will help you in the end. With a solid number in your head, you can start searching for an apartment you can actually afford, both now and later on, even if “surprises” pop up. Keep in mind that having a realistic, firm budget can make you into a stronger, savvier negotiator when presenting an offer on an apartment. Realtors and sellers will quickly realize that you can’t be pressured to raise your numbers.
A common pitfall buyers often run into in Eretz Yisrael involves the problem of mortgages and bank appraisals. Buyers apply for a mortgage based on the seller’s asking price, but when the bank appraises the apartment, the buyer may learn that according to “official” calculations, the bank considers the apartment to be worth significantly less than the market does. This leaves the buyer in a lurch – seeking a mortgage that’s actually much higher than the appraiser determines they need. Hopefully, if the buyer budgeted higher for “hidden” expenses, this won’t be a major issue if it arises. Mortgage brokers are also of tremendous assistance in negotiating the best and most competitive rates.
A Done Deal
Once a buyer reaches the point of coming to contract, we must hire a lawyer, as a thorough, carefully worded agreement makes all the difference. The Getter Group has seen countless examples over the years of how unique points can be incorporated into a contract to protect the buyer and prevent unpleasant surprises. Building on such experiences, The Getter Group has created a contract appendix, which inventories exactly what is included in the deal – from fixtures to appliances and more. Additionally, The Getter Group has drafted a number of unique clauses and other safeguards that can be added to a contract to protect the buyer as needed.
Another, often overlooked, aspect of contracts is making sure that all the technical details, like the physical address, property size, and so on, listed in the document are consistent with the information registered in the municipality. Unbelievably, an apartment’s address might not even correspond to the address listed in municipal records! We’ve seen firsthand how recording this kind of information in a contract shields the buyer from objectionable occurrences down the line.
The experts at Getter also advise buyers to update any payment schedule according to the actual date of signing. We’ve seen too many unfortunate examples of signings getting delayed but fee timetables remaining unrevised – meaning a buyer may need to remit payments within a week or two of signing, even though he anticipated having two or three months to begin sending the fees. Once it’s signed, it’s signed. We can’t emphasize enough the importance of a tight contract.
Buying a home is among the biggest – and most exciting – purchases a person makes in his lifetime. Some people would add that it’s also among the most stressful. Indeed, acquiring land in Eretz Yisrael is a huge mitzvah – and Chazal describe it as one of the three things that are obtained with suffering (niknim b’yissurim). Nevertheless, there are things that you can do to reduce the difficulties involved.
Engaging the assistance of a brokerage firm like Getter can change the whole experience. With careful planning and thorough review – and some help from a knowledgeable, trustworthy buyers’ brokerage advocacy service – the process can be a smooth and even pleasant one. Then you can start making that perfect location into a warm and happy home.
Mr. Shia Getter is an authority in real estate and buyer protection in Israel. He founded The Getter Group to help homebuyers secure their interests and avoid pitfalls when buying in Israel. Enlist the experts. Contact The Getter Group today at 718-473-3950 or via e-mail at email@example.com. Mr. Getter will be visiting New York and New Jersey from January 13-16. Be in touch to arrange an appointment.
This article is intended for informational purposes only and is not meant to provide legal opinions, or to serve as a substitute for professional advice. The author does not guarantee that the information contained herein is complete or accurate and does not assume any liability for any loss or damage caused by errors, inaccuracies, or omissions contained in this article.