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Layout and Content
Important Terminology
Getting a Home Loan Fast
Relevant Links


Israel, by U.S. standards, is small.  It is approximately the size of the state of New Jersey.  The preferred living area is along the coast (the Coastal Plain) and in Jerusalem.  There is a population concentration and perceived limited housing availability.

The result:  the vast majority of Israeli's live in urbanized areas (by U.S. standards) and hi-rise buildings (3-10 stories is the norm) and a limited quantity of suburbs and individual homes.   Housing (to buy) is expensive, however renting is cheaper than the U.S.  Certain areas (settlements & development towns) may have much cheaper housing, more space and significant incentives to buy (offset by being "out-of-the-way").

The layout and contents of homes have some very important differences that affect most American's greatly.  Read carefully!

Layout and Content

The Israeli home (condo, apartment, doesn't matter) has these significant physical differences:

No appliances.
No closets!!!
Smaller bedrooms.
May not have kitchen cabinets.
No bathroom cabinets.
Usually no storage space (basement, storage room, etc.)

No appliances?  Ok, that may not sound so strange, but keep reading.  No refrigerator, no range/oven, no washer/dryer, no air conditioner, no heater (exception, water heater is always included).  It doesn't matter if your renting or buying, no appliances are included, bring or buy your own (don't count on renting appliances, I couldn't find anyone to rent from when I arrived).  {There's always the occasional exception, some homes will have a built-in stove-top and/or oven.}  See the Appliance page for more important information about appliances.

No closets!  THAT'S RIGHT, I SAID NO CLOSETS!   The Israeli home has no built-in closets.  None!  So where do you hang up your clothes, put your shoes and put away the towels?  The Israeli alternative to closets is floor to ceiling cabinets, kitchen style cabinets covering 1 wall in the bedroom.  BUT (big but here), normally they don't come with the home, you buy them yourself.  This presents 2 problems for the American, first they are often sized to the particular bedroom (meaning if you are just renting the ones you buy today may not fit the next home you move into), and second they are expensive.   (Oh, and a third problem, they take up significant space in the room, which can be very problematic if you plan on trying to fit American bedroom furniture in the room as well.)  Some rentals do include cabinets, if you find them consider yourself lucky.

Smaller bedrooms.  Generally speaking the Israeli bedroom is significantly smaller than it's U.S. counterpart.  Add into this the closet issue mentioned above and some rooms have practically no space for anything besides the beds.  Immigrant beware -> your U.S. bedroom set probably won't fit (but bring your beds!  The Israeli concept of a mattress doesn't qualify by U.S. standards.)

May not have kitchen cabinets.  Some homes don't even come with kitchen top cabinets.  (They do always come with countertops and kitchen bottom cabinets.)  Again, you must buy your own and install them (and take them with you when you move).

No bathroom cabinets.  Bathrooms have sinks, bathtubs (or shower stall/place), and a toilet (often in a separate toilet room), nothing else.  No medicine cabinet, mirror, towel racks, or under-sink cabinet.  You are welcome to buy them yourself and put them up.

Usually no storage space.  Most Israeli homes do not have a basement, garage, attic or any other kind of extra storage space.  The available storage space in the average Israeli home is approximately 5% (yes, I said 5%) of an American home.  (Exceptions, I have seen 1 house with a basement, a couple duplexes with attics, and some condo's have an extra storage room, so the sum total space reaches 25% of U.S. norms.)  If you bring the American quantity of "stuff", be prepared to have lots of boxes around your house.

Important Terminology

Terminology is important, as some housing terms have different meanings in Israel.  Note, mostly English words are used in Hebrew for housing.  Here's the significant terms (the terms are spoken in Hebrew as written):

Deera - An apartment / condo in an apartment building.

Duplex - An apartment/condo with 2 levels in an apartment building (stairs inside).

Cottage - An attached house (usually 2 or 4 together) with a small yard.  No garage but driveway/parking.  Sometimes 2 story.

Villa - A stand-alone single-family house with a yard.  May have a garage (or may not).

The last important term is "rooms" (haydarot in Hebrew).  A home is measured in Israel by the square meter and by the "number of rooms".  The number of rooms includes a count of bedrooms plus the living room (usually it's living room / dining area together).   So, a 5 room deera means 4 bedrooms.  A 2 room deera is a 1 bedroom apartment by U.S terms.


An interesting difference in Israeli costs is renting.  Relative to the purchase price of a property, the rental price is downright cheap.  Even by U.S. standards, long term rental rates (1 year or more) are reasonable (depending on where in the U.S. you are).

Example, a 3 bedroom apartment in a decent area may run $500 per month.  Note, this price does not include any utilities (you are expected to pay for water, gas, electric, and telephone).

Here's a breakdown of normal rental costs:

  1. Rent via a Real-Estate agent (the norm), pay him 1 months rent.
  2. Sign the contract, pay the Owner's lawyer 1/2 months rent.
  3. Install phone line, pay ~$175 (but only ~$20 to transfer it).
  4. Pay water and electric (no start-up / transfer fee).
  5. Pay gas (if by gas bottle, the norm, rent 2 bottles every ~4-8 months, pay in a lump sum.)
  6. Pay property tax (more info, see Taxes page.)

hottip.gif (7020 bytes)While the utilities will be in your name, the guarantee that the utility companies use for payment is to refuse service to a new resident until any/all old bills are paid.  This means if the previous resident left any bills behind you won't be able to get (water / electric / gas / phone) until someone pays the old bills off.   After you sign a contract it's not the landlord's problem (it's yours).  There are 2 ways to avoid this problem, one is to actually check with the utility companies to make sure the bills are zero before signing the contract (this is the normal procedure) or two to have it written into the rental contract that the landlord is responsible for paying any old bills (or alternatively that you are released from the contract if any outstanding bills are found and not paid immediately by someone else). 

There's a reverse side of this as well, when you move out you must make sure that the landlord signs a paper verifying each of the current utility meter readings (a check-out level) to make sure you don't get stuck with utilities used until the bills are transferred to a new tenants name.


Buying in Israel is significantly different from the U.S.  Land title can often be in dispute.  This is additionally complicated by the fact that there is no escrow process in Israel.  Further, banks only finance up to 70% of a property (and they really don't like going over 50%).

It's very important to employ a very experienced well skilled real-estate lawyer in any purchase transaction.  Money is usually exchanged in a 5 step process (to protect both sides, 5 different stages of paperwork, signings, and movement of money between the parties).  Full detailed research of property ownership is critical (there is no "title" companies, this involves the lawyer and the government land-title office).

An example of this process is below... 

Getting a Home Loan Fast or
"Mortgages for Type A People"

by Ralph Anzarouth, Oct. 31, 1999, posted with permission.

This section will explain how I got a fast mortgage in Israel (definitely not the norm).

A) YMMV. It worked for me, it might not work for you. Israeli bureaucrats (Israeli bankers ARE bureaucrats) can be very inconsistent over time, so whatever happened to me proves nothing, besides the fact that it's worth trying.

B) I was in a hurry to get a mortgage in a week.  Actually I did not need it that fast; I could have asked my current landlord to let me move out a couple of weeks later. It's just that I wanted to do it fast ("A" type, ah?). If you are a "B" type you can take it easier than I did, unless you have time constraints, or are afraid that the dollar goes up, or interest rates, or both.

C) Israelis do not like this method, and you might want to avoid it. Why?  Because instead of visiting the bank every day (which is what bankers want you to do), I kept sending faxes with all the documents they need. Bankers hate it, actually. They want you to loose half a day's work to go and hear from them which document you should have brought and didn't. Hey, they are bureaucrats, and have to justify their existence and their jobs. It's not by chance that in the end I gave the business to a Russian immigrant at Bank Yirushalaim who couldn't care less about whatever negotiating strategy I chose, she just badly wanted my business. She deserved it and I am glad that she got it.

D) In reality, the search for a house is the main thing. Mortgage is only a tool to get there, but you need to keep energies to work it out. People who focus too much on the excitement of buying a new place tend to invest less than they should on the process of how to buy it cheaper. Banks can exploit this and give deals at outrageous rates. One proof of this is that many people I know got cheaper interest rates (even 1% off) negotiating with their bank.

E) This section does not detail important items, like: the buying process, the choice of a lawyer, checking the contract and many others. I focus here on the mortgage, and mention the other items only in relation to the mortgage.

What I did:

1) I put 6 banks in competition for my 100 K$ mortgage, and sent many important documents in advance, during my search for a place to buy. Each bank received (well before I bought my house) everything they needed to give me an "Ishur Ikroni", meaning that "in principle" they will agree to fund me (which is by no means a commitment, as they proved later). These documents were: request form (their own document filled), Teudat zehut (Israeli id card), Teudat oleh (certificate of immigration), Teudat zakkaut (certificate of immigrant loan assistance eligibility), 3 last pay stubs, 3 last bank account reports, 3 pay stubs of each guarantor(s). If you do not feel like asking the guarantor(s) his/her/their pay stubs, you can ask him/her/them to fax/send them to all the 6 banks (my friend couldn't care less and gave me the copies of his stubs). I decided to submit also the bank reports of the banks (outside Israel accounts and in Israel) where I kept my savings, to have them salivate a bit.

IMPORTANT NOTE: All these are copies, and never originals. In the whole process of getting a mortgage, you never give any original of your personal documents to any bank (beside one exception, which we shall see later). All these documents are copies, and you can often send the whole thing by fax or snail-mail.

2) Try to get from each bank an "Ishur Ikroni" and a tentative interest rate.  This has only a negotiating value for later use (like you can tell "I built my budget on 6%, you cannot ask for more now"), but this is no commitment.

3) Try to understand at this point which bank really wants the business, and how bad they want it. This is an important information to gain time and bargaining power.

4) Get the original of your Teudat Zakkaut if it is at a bank that you will not consider for a mortgage. If you still consider them, tell them you need to take it away and that they should prepare it. If you do not do this you might waste a couple of days later on.

5) Find a place you want to buy, then negotiate and sign the contract with a good lawyer (this would need a whole FAQ, but I will not go into this now).  Get your original of the contract together with the Nessach (or any official registration the house has). It's your lawyer's job to give you valid documents to present to your bank. NOW THE REAL NEGOTIATION WITH THE BANKS STARTS.

6) As soon as you have signed the purchase, fax or give a copy of the contract and of the registration to all the prospective banks. No originals.  Tell them that a) You want a firm offer on your mortgage conditions (interest rate + duration + amount) and ask for the exact list of documents you will need to bring in.  Interest rates are of various type, be sure you understand what you are offered.

7) Call every day each bank to know where the offer you are waiting stands.  By now you do know who wants your business and who doesn't want to compete.  Get from each bank their checklist and find the items that are required anyway, whatever bank you will pick up in the end. Get the prospective banks (not more than two of them) to talk to your lawyer to make sure that they agree on the documents to submit (there are quite a few and they might be tricky). You can also exploit this waiting time to bring your lawyer a document from Misrad Hapnim {Ministry of the Interior} (yes, you HAVE to go there again) which enables you to pay only 0.5% Mas Rechishah (special house sales tax reduction as a new immigrant). Your lawyer does not always ask you if you are an immigrant, so if it does not show (and even if it does), be sure you tell him.

8) Get the offers and decide. I forced myself to wait a whole week (hey, for an "A" type this is like a century!) to bring them down as much as I could.  B"H, in the end I brought Bank Yirushalaim down from 7.0% to 5.9%, which is a saving of more than 20,000 NIS before inflation over the 10 years of my mortgage. It's worth waiting a week. When I got that offer, I already knew what they wanted, and already had most documents done. Too bad for the other banks, who weren't able to make a decent offer. NOW THE RUSH STARTS!

9) Did I say I wanted to finish in 24 hours? Actually I wanted it in a week, but it took 6 full days until I got an offer! So I had to run now. I went on Monday morning to the bank to get a few documents they couldn't give me before (they need to write the final mortgage amount). I also gave them:

a) The original of the Teudat Zakkaut (the only original I ever gave and which I had recovered from the First International Bank of Israel (FIBI) a few days before).

b) The registration of the mortgage which I did at some other office in Tel Aviv (you give them another paper from the bank and 140 NIS in stamps [document tax]). 

All I had to do now was:

a) Ask FIBI to sign a form authorizing the mortgage bank to be paid monthly.

b) Go to the lawyer to get some other documents (power of attorney, etc.)

c) Get the signature of the seller wherever he is. This can be tricky, because in theory the seller should sign in front of the lawyer. If there are several sellers, as in my case, you have to find them all.

d) Go back to the lawyer to authenticate all this (my lawyer is also a notary).

In the meantime, I had asked my guarantor to go to the bank and sign himself a few tons of papers saying that we owe them everything we have now and/or will make in the future. On Tuesday morning I was at Bank Yirushalaim with all the paperwork done 24 hours after I accepted their offer. Well, maybe 26 hours. That felt good. After this, you can call the other banks and tell them the deal is over. Do this very nicely. Regardless.

10) Did I mention the ribit kalkalit? They do not tell you about it. They should. This is very tricky and I am not sure I understand the logic behind it. But I do understand the mechanism. If the mortgage starts at the beginning of the month (1-15), you pay nothing now and start with regular payments at the beginning of the following months. I think that even if you shouldn't owe them a full month of interest, you do pay your regular monthly payment also on the first month. If you start your mortgage after the 15th, you are charged a daily interest rate until the last day of the month. Hey, this is A LOT of money, like 0.04% of the value of the mortgage PER DAY. If you get a 500K NIS mortgage on the 20th, it's 2000 NIS interest for nothing.  When establishing the contract, explain to the lawyer to set up the payments dates so that you do not pay a ribit kalkalit. I admit some resistance to grab the logic of this one (I will have to pay 5 days), but if somebody else has a rational for not trying to avoid it, he's welcome to explain.

11) Did I say the whole thing is not simple? You can make it simpler. If the seller has already placed a mortgage on the house, he has to free it in order to enable you to get a mortgage. In general he plans to free it by using your money. But you can give no money if his mortgage is still running. To avoid a catch-22 situation, his bank writes to your bank that they are ready to give up their mortgage rights over the house in exchange for a check of <SUM>.  This enables you to get your mortgage, though neither you nor the sellers ever get that money, because it's exchanged between the banks. You only get the receipt a week later, which can be a long time if you want to get the house keys fast. Now, here is how you make things simpler: it is MUCH better if both mortgages are at the same bank. I do not know if I would have given up better conditions to do this. B"H, my favorite bank was also my sellers' bank. But that did make things simpler. Also, you can motivate the sellers' bank by telling them "I really want to help you keep this business, just give me the same conditions as Bank Ploni". Try. I did. It worked.

12) Now it's time to honor commitments: the bank must give you all the money they promised at the right conditions, the sellers must bring many documents to prove he has no debts to arnona, vaad bait, electricity and so on, and you have to pay whatever you have to. Once you have the bank's checks (or a receipt stating they are using your money to cancel the sellers' previous mortgage if they had one), it's better to close the deal in front of the lawyer. Get receipts from the seller (make sure he went through the whole checklist from the contract), and make sure a copy of each is kept in the lawyer's file. Pay attention to the time you do it. The official NIS/USD rate is fixed Mon-Thu (I think) at 16:30, but the contract has often a special paragraph specifying how to pick the rate of the day. I just cannot grab the logic of that paragraph, so ask the lawyer to set the meeting at a time when exchange rate is not ambiguous.

13) Be ready for last minute surprises: I got a call from the bank 3 hours before getting the money. They made 3 new requests: a) a stupid one: a paper they had already and found pretty soon. b) a less stupid one: a paper they did not need, but which the contract calls appendix beit, and therefore must be added as an appendix. I think I would have done the same if I were the banker. The lawyer faxed it immediately. c) an outrageous one: "How much did you pay already?" I told them I had already paid an advance of 8000$. Not good. They said I should have paid a minimum 10%, therefore they cannot pay the mortgage until I do. "Why didn't you tell me before?" "Oh, didn't we?" So we settled for paying some more money to the seller at the bank when finally getting the mortgage. Which was 1 hour later…

14) Does the bank make mistakes? Yes, they do. Some of them cost you money. When they tell you they are sorry, transform this into a benefit for you. For instance ask them a discount on the petichat tik (the file opening). Tough guys get it for free (hey, they made a mistake!). Or ask to print the checks with next day's date, so that you get one day off from the ribit kalkalit.  Tough guys get this too.  Of course, it's better to do these meetings when you are free from office obligations. I almost did it. But my last meeting at the bank (with the seller) went on for a while and I had already scheduled to host a conference call to explain to people calling from several continents the content of a speech I am giving next week in Spain. Doing this on my mobile phone while signing a ton of documents (and making sure there are no mistakes) is not something I recommend.


Relevant Links

None yet, I'll add them as I find them.

Last Updated: 22-01-2000
Copyright 1999-2001 by Akiva M
E-mail to akivam .a.t. gmail 'd'o't com with questions/comments.