Working Successfully with Your Tel Aviv Real Estate Agent
CAN I WORK WITH MORE THAN ONE AGENT?
In Israel, unless you’ve hired a real estate agent to sell your home exclusively [read more on the benefits of working exclusively with a real estate agent here], and signed a written agreement with the real estate agent, you have no obligation in working with just one agent alone. As I previously wrote, buyers feel the need to keep their options open and therefore work with several agents in their house hunt. Now, keep in mind that Tel Aviv is a relatively small city and if you’re actively searching for an apartment in a specific area, then know that it is likely you’ll run into the same agent, and the encounter may be a little awkward for you.
As real estate agents often work with one another, chances are you’ll be offered the same apartment by multiple agents. Don’t get discouraged by this, simply understand that real estate agents work with whatever the market has to offer at any given time, and as agents collaborate and share information with each other, this often means that they share new listings to expand their network and reach out to their colleagues for access to listings for their buyers.
Here are some important tips to follow for buyers working with their Tel Aviv real estate agent:
Prior to seeing an apartment with a real estate agent, you’ll be asked you to sign a written agreement (a Buyer-Agent agreement) stating that if and when you pursue the purchase of a specific apartment, you are then committed to paying the agent or agency a fee of 2% + VAT (which is standard commission).
A standard Buyer-Agent agreement specifies details of the apartment and includes details of both the buyer and the agent. This is a standard form and it is required by law, creating a memorandum between the buyer and the agent. This agreement does not bound you to solely work with this particular agent or agency, it does however, bound you to pay the agent or agency their commission, in the event of the purchase of the specific apartment through THAT AGENT or AGENCY. Details of the agent including his license number should be stated on the form as well as relevant details of the apartment, such as full address, price and other key details.
If you’re seeing multiple listings with the same agent or agency, then the agent should add all relevant details of the apartments you’re seeing together. Although a lot of real estate agents have English written forms to make it easier for foreign clients to read and understand, the standard agreement is written in Hebrew. A lot of Foreign clients who are unfamiliar with this system are reluctant to sign the agreement, especially if the form is in Hebrew. Understandably so, however, your agent should be able to give a copy of the agreement should you wish to discuss it with your lawyer first. You should be given a copy of the agreement anyways at the end of every meeting with your agent.
Now, this is probably the most important aspect of thoroughly understanding the Buyer-Agent agreement, and it is especially important for foreign buyers who are dealing with Israeli real estate agents for the first time.
The reason for signing this agreement, stating all details (yours, the agent’s and the apartment’s details) is so in the event that you choose to purchase one of the apartments you saw with a particular agent or agency, you are then obligated to paying a fee. If, and for whatever reason, you chose to see the same apartment with a different agent and move forward with the purchase, then know that this puts you in a very difficult position, as you’re obligated to paying a fee to the first agent you saw the apartment with, and not the second agent.
It is unfortunate that many real estate agents convince buyers into seeing apartments without them knowing the exact location upfront, which is the main cause for such confusion.
Beware of real estate agents who are reluctant on providing you with exact details of the apartment’s location. If you’re actively searching, then you should try to get as much information as possible BEFORE seeing the apartment, and if you suspect that it may sound similar to an apartment you’ve already seen, then ask politely if this is in fact the apartment in question. If it happens to be that you’re seeing the apartment AGAIN with another agent, then make sure to POINT OUT that you have already seen this apartment with another agent.
I’ve heard some pretty nasty stories about how buyers intentionally worked with several agents simply to negotiate on both the sales price and get the best deal on the agent’s commission.
Remember, there’s a code of ethics among real estate agents that should be kept, and as I previously wrote, many real estate agents work together and share information with one another, so honesty and transparency from both sides is key, to keeping things smooth.
Another important reason why you should gather as much information as possible on the apartment prior to seeing it, is to see if it really is worth your while. This is something the agent should encourage, as real estate agents work solely on commission. Being efficient is one of the most important factors to this business, and your agent should avoid creating meetings that turned out to be a complete waste of time for everyone and ideally, your agent should only pick out relevant listings for you to see.
Unlike in other countries, where real estate agents deal with the entire sales transaction from start to finish, real estate agents in Israel do not deal with the actual legal process of the sale. It is within your real estate agent’s responsibility to deal with all aspects relating marketing of your apartment, screening of buyers, handling the negotiating process, but every sales transaction is eventually taken care of by real estate attorneys. Real estate attorneys deal with drafting contracts, checking the deed and going over all legals aspects.
Ideally, everything related to the sale leading up to when the attorneys get involved, is within the real estate agent’s responsibility. It’s within the agent’s responsibility to form a preliminary agreement between the buyer and the seller, which normally consists of four main points: price, payments, date of entry, and furnishings. For example: if an apartment comes turn key (fully renovated and furnished) and is available for immediate entry, then the main points to agree on is price and payments. [Please read more on sales transaction here]
It is important to clarify things with both your agent and attorney ahead, as managing expectations is key to a successful transaction. As a rule, your attorney is responsible for ALL legal aspects relating the sale and with the actual transfer of possession. This also includes the transfer of relating bills such as the Arnona (the municipality tax), Water, Electricity, Gas, etc onto your name.
Your real estate agent’s job does not end here. He should be an effective factor by providing you or your attorney with any additional information on the apartment (documents he has access to from the owner) if he has, he should follow up with you and your attorney regularly and keep protocol throughout the sale transaction.