Buying a New Apartment in Israel – Signing a Contract

Ohad Shpak Law Office
Ohad Shpak Law Office

Buying a New Apartment in Israel – Signing a Contract 


A few weeks ago, I posted a guide to what you should do before signing the contract to purchase an apartment in Israel.


The guide explained the need to: examine the residential complex and surrounding area; ensure that the seller is the actual owner of the land; examine the contractor assigned to the project; ask the contractor to present a valid building permit; and of course – carefully examine the apartment itself.


The guide also explained the need for a skilled lawyer, specializing in real estate in Israel, to carefully examine all those aspects.


When you decide to start the purchase process of a real estate property in Israel, you can begin negotiations with the seller on various terms of the contract such as price, order of payments, linking payments to the index of construction costs, technical specifications and the cost of upgrades or changes.




You can bargain with the seller on the price of the property, and when the price is agreed upon, remember to ensure that the contract includes the final price after discount (if given) including development expenses and VAT.


The contract should also detail additional payments that the buyer will have to make such as a connection fee for utilities such as water, gas and electricity, legal expenses, etc.


Order of payments 


It is important to negotiate a payment arrangement that is convenient for you. Of course, the monthly installments depend on the mortgage you take, but try to adjust the initial payments according to your comfort level.


While payments are usually linked to the Construction Costs Index, which is generally higher than the Consumer Price Index (CPI), it is possible to request that payments be linked to the CPI.


It is possible too, in an agreement between you and the seller, to make some of the payments earlier than agreed upon, thus avoiding a big rise in the index, leading to a rise in the final price as well.


Do not hesitate to negotiate the order of payments with the seller, and you can ask your lawyer to do so on your behalf, as part of the negotiation over the terms of the contract.  




Be sure to specify possible changes and additions to the apartment in the contract, as well as the costs and credits for accessories that are waived on them. It is possible to request that by the time the flooring is set, the buyers are entitled to ask for changes in the interior design of the apartment at no extra charge.


For example, it is possible to move walls or electricity and water points, or to plan additional air conditioning openings at no additional charge. As part of the negotiations before signing a contract, ask the contractor for the addition of electricity points, light or telephone at no additional cost.


Technical Specifications 


Make sure that all agreements and guarantees that the seller gives you are noted in the contract. Try to adjust technical specifications for the interior design of the apartment; it is worth bargaining over the cost of upgrades.


Contrary to conventional wisdom, a skilled lawyer can help you achieve significant changes in the contract with your contractor/seller. Keep in mind that a long contract sent by the contractor is not a fait accompli (final version), and changes in favor of buyers can always be introduced.


Therefore, it is important to hire a lawyer who is a real estate specialist and knows how the system works. Israeli real estate law and accepted local business practices are not always the same – an experienced real estate lawyer who is familiar with the business climate in Israel can assist you in the negotiations with the seller on various terms of the contract.

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The Firm specializes in real estate and property tax, as well as commercial litigation and labor law. The Firm represents commercial entities, contractors, entrepreneurs, hedge funds, importers and exporters, associations / non-profits, cooperatives, tenants of urban renewal projects & private clients.

Our offices are located:
Tel Aviv – 13 Yehuda and Noah Mozes St.
Jerusalem – 34 Keren Hayesod St. 9214913

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