Before going to market
One of the most common mistakes is to start advertising before you understand the full picture.
What is the property worth? What deals have been done nearby? Which properties will you compete against? Is there capital gains tax (mas shevach) or a betterment levy? Do the property documents match the actual state of the property?
Checking the facts early lets you go to market better prepared, set a price on an informed basis and reduce surprises later in the sale.
1. What is your property worth?
The right asking price is not set only by what is being asked for other homes on the listing sites.
Look at deals actually completed around the property, at properties competing for the same buyers, and at features such as floor area, floor, parking and balcony.
Alongside the data there are also things an automated system finds hard to value — the standard of renovation, an open view, how quiet it is, orientation, internal layout and the condition of the building.
The goal: To understand the realistic value range and the right price to go to market at.
2. Are the property documents in order?
Even before a serious buyer arrives, make sure you know exactly what is registered and what exists in the property documents.
Among other things, check the Tabu extract (land registry), the building permit, the plans and other relevant documents.
That way you can spot gaps between the actual state and the registration in advance and deal with them if needed — instead of discovering them when the buyer is already in the process.
The goal: To arrive at the sale prepared and reduce surprises and delays later on.
3. Are there any building violations?
An enclosed balcony, an extension, a change to the floor area or another addition made over the years does not always match the building permit.
Gaps like these can surface during the checks by the buyer’s lawyer, appraiser or bank and affect the progress of the deal.
So it is worth checking in advance and understanding the state of the property before negotiations begin.
The goal: To know in advance what you are selling and prevent a problem surfacing just before signing.
4. Is capital gains tax expected?
The sale price is not necessarily the amount that will be left in your hands.
In some cases selling a property may involve capital gains tax (mas shevach), depending on the circumstances of the purchase and sale, the rights in the property and the exemptions or reliefs that apply in the specific case.
Before setting a price and making decisions about the next property, get a professional check of the expected tax liability.
The goal: To understand in advance the expected net from the sale, not only the deal price.
5. Is there exposure to a betterment levy?
In addition to capital gains tax, in some cases a betterment levy (hetel hashbacha) may arise following a plan or building rights. The sums can be significant, so check in advance rather than discovering the liability only during the deal.
The goal: To get a better picture of the possible costs involved in the sale.
6. How much of the mortgage is left, and what will you really be left with?
If there is a mortgage on the property, check the outstanding balance and the terms for repaying it.
When you put the mortgage balance together with the possible costs and taxes, you get a clearer idea of how much money is likely to remain in your hands once the sale is complete.
The goal: To know the real sum you will have available for buying the next home, or for any other purpose.
What the preparation process at Leaders includes
- An up-to-date market valuation — analysis of completed deals, competing properties and the property’s features, to understand the value range and the right asking price.
- A legal and planning check — examining ownership, conformity with the building permit, violations and relevant documents.
- Gathering the property documents — Tabu extract (land registry), plans and building permits, previous agreements and other documents needed ahead of a sale.
- A consultation with a lawyer specialising in real estate taxation — at our expense — for an initial review of issues such as capital gains tax, betterment levy and legal matters that may affect the sale.
- A consultation with a mortgage adviser — at our expense — to check the mortgage balance, options for repaying or porting it, and initial financial planning towards the next property.
Questions worth asking yourself
How will you recognise a serious buyer?
Not everyone interested in a property is at the same stage on the way to buying. A skilled agent knows which questions to ask, and checks the buyer’s seriousness, financial capacity, timetable and fit with the property.
Should you choose an agent only by the size of the commission?
The commission is only part of the picture. Look at local experience, the marketing plan, digital exposure, the pool of buyers, negotiating ability and the level of support you will receive throughout the deal.
Summary
If you are planning to sell — start with the right preparation. Understand the property’s value, check the documents, know the taxation and the costs ahead, and know how much money is likely to remain in your hands after the sale.
At Leaders we put the picture together for you — including an initial consultation with a lawyer specialising in real estate taxation and a mortgage adviser, at our expense and with no obligation.
The information here is provided as a service and does not constitute legal, valuation, planning, tax or financial advice. Consult the relevant professionals before making a decision.
