Some Pros and Cons of Buying on Paper

In Israel, people often buy a home on paper, i.e. a house not yet built. There are many advantages and disadvantages to buying in a new project.

Pros

• Apartments are cheaper in a new project, especially if it’s in a new unbuilt area – such as Ramat Bet Shemesh D. Once it’s built it is suddenly the same price as an older home

• You do not make the main bulk of payment for the home until it’s in its final stages of completion

• You can design make changes to the layout of the home, the living room, kitchen, bathrooms etc (within limitations, of course), the way you’ve always dreamed your house to be

• The price of the house almost always goes up during each stage of building. You can almost always sell your house at different stages of the building and make a nice profit. For an investor, this can be an attractive proposition

• The kablan will usually send one his workers to fix problems that often arise

• There’s something really special about building a home

Cons

• Your home won’t be ready for some time. Investors won’t be able to charge rent for some time.

• Kabalanim are much better than they used to be. Yet, some are notoriously late and can be substandard. Check out the kablan’s history

• Kablanim can go bankrupt – your money should be protected (make sure you have a good lawyer), but it will delay construction

• Designing your own home can be pain in the neck. You’ve got so many different types of cupboard handles to choose from, do you really know where to stick the pug sockets? I didn’t know there were so many different types of toilet bowls and sinks!

• Designing can also be expensive, choosing an upgraded kitchen, fancier bathrooms, extra electric sockets, moving a wall etc

• The final price of the house adjusts, normally quite marginally, with the builder’s price index.

• Often you have to add items such as air-conditioning, and you hadn’t factored that into the cost

On the other hand, a second home may also need a whole long list of renovations.

There are so many issues to consider when buying a new home. Contact us at Israel Properties and we’ll talk them through with you to help you make the best decision for you.