Chapter 7: A guide to investigating an apartment
Do not be wary of investing resources and time into investigation of an apartment, even if you are outside of Israel. In financial terms, the expenses will be minuscule in proportion to the value a successful transaction, and in practical terms, the value you can obtain through assurance that the apartment in question is worth purchasing, is priceless. Although there are many ways to approach and investigate an apartment, we recommend implementing a three-tiered approach, which can be accomplished either remotely or in person.
Step 1: Assessing the environment:
Ask your real estate agent the right questions about the neighbourhood, for example, as pertaining to “fit.” Can you live with the neighbourhood’s residents in terms of age demographics, culture, family orientations, religious affiliation, ethnicity, language, and politics? Some Israeli neighbourhoods, for instance, can be more accommodating to non-Hebrew speakers than others. Others are heavily populated with immigrants from certain parts of the world. In our experience, the significance of “fit” cannot be overestimated.
Further questions relating to environment can relate to the socioeconomic condition of the neighbourhood, for example: if you have children, will the neighbourhood be a healthy environment for them? Will it be, for you? It is recommended to ask a knowledgeable source about the neighbourhood’s ambiance both during daytime, and at night.
Other relevant questions can pertain to “quality of life.” Quality of air, roads, water, and municipal and local services such as educational institutions (if relevant) should be investigated. Additionally, proximity of schools, public transport, religious institutions, parks, workspace, retail shops, groceries, medical facilities, and restaurants can play a huge role in your quality of life.
Step 2: Assessing the building
Don’t forget that you will be physically living in the building just as much as the apartment itself. Therefore, you should devote close attention to the building’s maintenance levels. Investigate the continuity of fees paid for its upkeep by residents, and the motivation and commitment of the other tenants to keep the building in high maintenance.
If possible, it is strongly recommended to ask a representative of the shared building (va’ad ha bayit) or a current resident or renter within the building, about relations between neighbors in the apartment building. Also check the condition of the courtyard, elevator, other open spaces, garbage disposal room, stairwell, and other areas.
Step 3: Assessing the apartment itself
Besides for general impression, wetness, noise, plumbing, general maintenance, air flow, and electrical systems should be checked by a qualified professional before a contract is signed. If a renter currently inhabits the premises, you should request to view the renter’s contract.
Chapter 8: Financing your purchase as a foreigner
A foreign citizen has the right to open an account in any Israeli bank, and subject to specific procedure, there are no substantial restrictions on opening such accounts currently. Holdups however may arise in the next stage, that of transferring funds to the local Israeli account from abroad. The account holder will have to explain their relation to the account abroad from which the transfer is made.
Sometimes, the owner of the account from which a transfer is made is a company, whereas the account holder in Israel is an individual. There are a number of possible explanations for the money transfer from a company account to an individual’s personal bank account in Israel:
• If the physical person in Israel is one of the founders of the company abroad, then the person will need to provide the bank the certified constituent documents of the company.
• In the case the physical person in Israel is an employee or adviser of the foreign company and the amounts that are transferred are their salary or consultation fees, the bank may require a contract or other appropriate documents proving the authenticity of this relationship.
• If the physical person has received credit from the foreign company, the bank will require a loan agreement.
Another option for a foreign resident who wishes to purchase property in Israel is to open a trust account in Israel. This is relatively similar to opening a personal bank account (described above) with the distinction that the trustee will manage the account on behalf of the beneficiary, pay the seller directly, and the trustee will have to explain to the Israeli bank the nature of the relationship with the source of transferred funds. Your lawyer
An even more convenient way to transfer the funds for the purchase of real estate in Israel is to arrange that money from abroad be transferred directly to the seller`s Israeli account. Such a bank transfer is useful in order to avoid need for declaration and explanation of the relationship between the source of the funds and the your Israeli account (in the case of opening an Israeli bank account as described above). In such a case, the seller’s bank will usually be satisfied by the very existence of a purchase contract and will not require any additional explanations concerning the nature of the relationship between you and the person transferring the money.