7 Steps to Buying Your Dream Home in Israel

Making Aliyah to Israel is the realization of a dream that’s existed for some 2,000 years. But in today’s world, what does that dream actually look like? For some of us, it could mean a life of spiritual immersion in the mystical city of Tzfat. For others, it could be year-round snorkeling in Eilat. From raising Sabra children who will serve in the IDF to a retirement spent at the theater and cafes in Tel Aviv, our Aliyah dreams and aspirations are as diverse as we are. 

But no matter how you imagine your ideal post-Aliyah life, there’s something that all of us need in order to make it happen: a home in Israel. In this guide, we’ll break down the steps you should take in order to secure your dream residence in Israel and feel at home in the Promised Land.

1. Calculate your budget and mortgage 

The first step to buying a home in Israel starts with you taking a hard look at your finances. Are you planning to sell your home in your country of origin? Liquidate your savings accounts? Or weighing whether to use cash or take out a mortgage to secure your new home? It’s important to understand what resources you have available, and what you’re willing to sacrifice or change to free up funds. 

Before you start shopping, it’s critical that you have an accurate idea of how much money you have on hand for the purchase of a home. If you’re planning on getting a mortgage, how much can you afford to spend each month on payments? A budget, which factors in your monthly expenses based on the cost of living in Israel (which may be dramatically different from your country of origin!) is crucial here.

These Nefesh B’Nefesh sample budgets can help you gain a rough estimate of your monthly expenses in Israel. Again, there are likely major differences between your current budget and your Israel budget. For example, cell phone bills in Israel are typically lower than in the US and Europe, while gas is usually more expensive.

2. Find communities that are a good fit

One of the most important aspects of integration, once you arrive in Israel, is living in a community that matches your values and lifestyle. You should look at communities based on a number of factors, such as your marital and familial status (single vs. a family with children) and level of religious observance. 

For example, if you’re secular and want to dine out on Saturday morning, many communities in Israel won’t offer that option. On the other hand, if you’re religiously observant and the sanctity of Shabbat is important to you, Tel Aviv likely won’t provide you with that experience. 

Physical location is also a critical factor in choosing a community that’s the right fit for you. If you’re planning to commute to the office on a daily basis, you may need to find a home in an urban area that’s close to a train station, highways, or popular bus lines. If you work from home and crave space, a house in Israel’s peripheral regions, such as the Galilee or southern Negev desert, may be the perfect solution for you.

Nefesh B’Nefesh offers a helpful guide to Israel communities, which includes pertinent information such as the number of local English speakers, general level of religious observance, municipal incentives for Olim, and more.

You can also ask questions in local English-speaking Facebook groups for communities you’re considering and virtually explore on your own by using Google Maps to check out local businesses, parks, attractions, and synagogues.

3. Retain an honest, trustworthy realtor

Ensuring that you have a real estate agent who is on your side and looking out for your best interests is key when entering the wild world of Israeli home buying. At this stage, it’s extremely important that you work with a realtor who is professional and ethical. 

You also have to be sure that your realtor has experience helping people from abroad and Anglos already living in Israel. Just because a real estate professional speaks English, there’s no guarantee that they understand the mindset of a non-Israeli, nor is there any assurance that they understand non-Israelis’ expectations around customer service.

Because a good cultural fit is so important when it comes to finding the right person to help you find your home, we highly recommend that you work with a real estate professional who has been recommended by someone you personally know or affiliated with an organization that will keep them accountable. Olim Advisors can introduce you to trustworthy realtors that we’ve hand-picked, based on our real-life positive experiences of working with them. 

4. Negotiate with your lender

Now that you’ve decided on the community where you want to live, have a trusted real estate professional on your side, and established your budget, it’s time to approach banks and other lenders for your mortgage (if you’re buying your home without a mortgage, you can skip this step!) 

Notably, the average down payment in Israel is significantly higher than in the US and other countries. The minimum down payment is 25% of the home’s purchase price, and many banks and financial institutions will require you to put down a staggering 40%.

We highly recommend that you work with a bank or financial institution that has experience working with Olim and can offer you services in English. You may also want to consult with an Israeli financial advisor regarding which lenders can offer you the best deal for your unique needs.

5. Contact the seller and discuss terms

After you’ve found a home that fits your criteria, including location, community atmosphere, and the actual features of the house (such as square footage/meters and number of rooms) it’s time to hash things out with the seller. 

Negotiation is the name of the game in Israel, and flexibility on both the buyer and seller’s side is par for the course. At this stage in the process, your realtor should be engaging with the seller (or their representative) in order to advocate on your behalf. 

Important considerations such as the date you can take possession of the home, whether or not furniture is included, and the terms of payment, should be agreed upon during this time. While it might seem tedious, ensuring that you discuss all the minor details, down to when utilities will be transferred to your name, can save you a headache later on.

6. Dive into due diligence

Although you may be eager to lock in your seller and secure your new home, it is extremely important that you complete in-depth, comprehensive due diligence regarding the property. It might seem obvious, but these checks can be a make-or-break factor as to whether you’re happy with your new purchase or end up in a less-than-ideal situation.

You need to check basic details, such as whether the seller actually holds the title or property rights, if there are any ongoing litigation or disputes regarding ownership of the home, and whether the house is in compliance with local zoning laws. 

This is also the stage in which you need to inspect the actual physical condition of the property. We highly recommend that you use a professional property inspector to gauge whether the home is sound and to detect and identify any potential issues with the house before you move in. You may consider requiring the seller to fix these problems before you sign a purchase agreement, or ask for the cost of the repairs to be deducted from the sale price.

7. Close on your new home!

Mazel tov! Now that you’ve found your dream home, agreed upon the terms for purchase, and secured a mortgage, it’s time to officially transfer ownership of the home into your name. For this process, you should use a real estate attorney, agent, or other trusted professional to ensure that all the bureaucracy is managed correctly.

For more on the Israeli home buying process, you can contact Olim Advisors here. We’ll guide you, step-by-step, through the entire home-buying process. We’ll also introduce you to our network of vetted real estate agents, so you can enjoy the peace of mind and reassurance that comes with retaining a realtor that’s already been screened for their trustworthiness and professionalism.

To access and download our 29 Tips for Buying a New Home, click here (and scroll to the bottom of the page).