Grouped Purchase
Grouped purchase
There are many options for buying a home in Israel. You can buy a home that is already built but new, or a home that is already built but already inhabited. You can buy a home off-plan, meaning that it will be built over a certain period of time. The advantage of this method is that the developer has already purchased the land and has the building permits. The price will therefore be definitively established from the start. It is also possible to have your home built through a developer, but this is much more expensive.
However, there is another possibility to have your apartment built for less. This way is to be part of a buying group ( kvoutsat Rekhisha ). This is a group of individuals who join together to buy a piece of land and build a building on it. The fact that it is a group of people allows them to avoid the costs of a real estate developer. On the other hand, it is clear that the buyers will have less influence on the decisions since there are several of them.
What is a purchasing group?
Group buying means that everything is done by the buyers independently. They will buy a plot of land and build a building with housing for the group participants. They will have to check all the legal details of buying a home as well as its construction. In short, they will have to do as a group everything that a single buyer does before buying their property.
Once the legal status of the property purchase has been verified, it will then be necessary to plan the implementation of the project. This is done using a cooperation contract signed by all parties. This includes the terms and conditions of their alliance. This is also when they appoint a management committee. This can be one of the group elected by the entire group, or a management company. Their role will be to represent the purchasing group and make decisions for them.
In the case of a management company, its role will be to help the group and its members to carry out the project. It will also be responsible for finding the bank financing for the project. Once this is done, it will have to launch calls for tenders in order to find a builder. With the help of the latter, it will look for a site manager who will monitor the work. A law firm and an accountant will be added to this group to resolve legal and financial issues.
The advantages of a group purchase
There are many advantages to buying real estate together. Each member of the group will be able to give his or her opinion, which will be considered by all. The final decision on all issues will be made by a vote. But the main advantage is actually financial.
- The price of housing will be 20-30% cheaper than for a single buyer.
- No additional cost from developers.
- The contractor is commissioned by the buyers, in the event of delay he is notified or substituted.
- The law firm is there to defend the interests of the group and resolve legal issues. It will also be responsible for negotiating contracts and registering the co-owned property in the land registry (taboo).
- The bank offers them advantages on rates.
- The acquisition tax is only paid on the land.
- VAT and permit taxes are reduced.
- There are no risks for the group members, as the budget is guaranteed even before the start of the work. As there is no promoter, the risk of the promoter going bankrupt is eliminated.
Buyers will therefore benefit from a home to their liking, at a lower price and without risks. This is the reason why more and more people are looking for the possibility of a group purchase. This can be acquaintances, friends, family, or even an already established community.
In the case of foreigners, it is absolutely necessary to check their situation and background. This may possibly avoid problems later on.
