Buying in Bet Shemesh: Let the freier beware!

I had to laugh just now, perusing The Jerusalem Post’s Passover Real Estate supplement (passed down to me, JC-style, by my mother).

On page 10 of the magazine, Jerusalem and environs real estate agent Shelly Levine lists a 51-cottage project in Sheinfeld, Bet Shemesh (see Spitters and splitters: what have the charedim ever done for us?) as one of her “five best picks” in and around the capital, giving more than a little credence to my contention – in Be a wise buyer, not a foreign freier: a guide to the world of Israeli real estate – that agents “will sell their own mothers to do a deal.”

But the opinion of Levine, President of “savvy agency” Tivuch Shelly, is seemingly held in high regard. “Not a day passes,” she informs readers, “when real estate buyers or investors don’t ask me, ‘What’s THE best place to buy now in Jerusalem?'”

Bet Shemesh, December 2011: THE best place to buy now, Shelly?

And you will never guess who we discover, a mere 22 pages later, to be conducting “Exclusive sales” of the Bet Shemesh cottages . . . yes, it’s our Shelly!

In describing Sheinfeld as “the internationally acclaimed pace-setting community . . . with full spiritual facilities,” Levine must have had in mind “one-of-a-kind” scenes and neighbours – a mere stone’s throw/spitting distance away from her project – like these, these and these.

Even if you still believe, however, that in Bet Shemesh you will find “top quality of life in a value-driven environment,” I suggest that, when sitting down to talk money, you make the vendor watch one of the following reports: in Hebrew or English.

[In the Rosh Hashanah 5773 edition of Real Estate: Grad deals in Sderot! Only a few homes remaining.]

Stop, hey, look what’s going down on Rothschild

“There’s something happening here, what it is ain’t exactly clear . . .”

The closest I have come to tasting revolution since 1967 – the year in which Stephen Stills sang those words, and the one, too, in which I was born – was witnessing Johny Finn stand up in a crowded Holders Hill Road examination hall and (following, it must be said, no little provocation) cut Rabbi Abrahams, aka “Abie,”  (even further) down to size with the now legendary “You chutzpadik little man.”

That uprising, however, ended there. And, following the exchanged glances of horror (and of respect for our classmate), our heads immediately returned to the University of London exam papers from whence they had risen. Moreover, Armitage Road’s answer to Che Guevara is now a successful (and, what is more unusual in that line of work, well-liked) Jerusalem property developer.

Following some encouraging early signs of rebelliousness, the only type of revolting ever associated with me had nothing whatever to do with changing society for the better (or, indeed, at all). And, at our Shderot Rothschild architect’s office, yesterday afternoon, my partners and I – entirely oblivious to the tent-ridden Boulevard outside – were, somewhat obscenely in the circumstances, arguing the toss about whether we should invest an extra 15% for Schüco (German) windows with a spec befitting a gas chamber (as you can perhaps tell, I was against).

Observing the day-by-day growth of the Rothschild tent protest, however, has left me in no doubt that we are witnessing something truly historic and society-changing here. Something is clearly rotten in the state of Israel: twenty-odd families, effectively, control its economy (Bloomberg article), while insane property prices and high food costs – ludicrously, much Israeli produce costs far more here than abroad – cause significant hardship for most Israelis, whose low salaries are completely out of sync with the cost of living. But it is not in the interests of the vested interests – said families, the Israel Lands Administration, property developers, and corrupt politicians and bureaucrats – to make life more affordable for the ordinary Israeli.

Rothschild Boulevard, yesterday evening

It would, of course, be entirely hypocritical of me to overdo the empathy bit with the tent-dwellers. And, of course, no one likes a protesting student: what exactly have they got to “protest” about? Doing f*ck all for four years?! The movement has also been hijacked, to some extent, by agitators, crusties and downright lazies, many of whom appear to believe that the world owes them a living. I observed one such yesterday – who looked like he regretted ever leaving Goa – appropriate water from a fire hydrant to fill (and to the brim) a large plastic swimming pool. For all of these reasons (and because I am just like that), I have turned a blind eye to Stuey raising his hind leg – walk after walk, and day after day – against tent after tent (see July’s Mensch of the Month). It is, after all, his Boulevard, too.

Nonetheless, it has been quite something witnessing this public awakening and mobilization – and the intensity of debate being conducted – on Rothschild, until only recently the bastion of Tel Aviv superficiality, vacuity and bullshit. And, if you haven’t seen it for yourself, it is well worth a visit.

Tomorrow morning, I will once again walk Stuey and Dexxy down Rothschild . . . and will once again confront the harrowing sight of early-20-something Israeli females emerging in their skimpy pyjamas – in this humidity, merely shorts and a vest – into the virgin sunlight from the night’s makeshift erections (their tents, I mean!) And it is not an easy sight to behold, I can tell you.

Though there is nothing to be gained, either, from looking the other way or burying one’s head in the sand . . . so, may the struggle continue!

Photos from Rothschild, the following morning: https://www.facebook.com/media/set/?set=a.10150745740155160.720923.611810159

http://www.justgiving.com/mike-isaacson/

Be a wise buyer, not a foreign freier: a guide to the world of Israeli real estate

melchett mike is about to join that quirky list of institutions (London Irish, Scottish and Welsh rugby clubs spring to mind) whose names no longer accurately describe them. After 12 memorable years, I have decided to cash in on the Tel Aviv property boom and to partially wipe out a loan which, due to rising Israeli interest rates, had started to disturb my sleep even more than the post-midnight Melchett mopeds.

Having purchased and renovated a few properties here, I had considered myself relatively streetwise – and compared to the oleh chadash, fresh off his Nefesh B’Nefesh flight, I probably still am – but the shenanigans of the last month or so have provided an uncomfortable reminder of just how naive I remain as to the shady goings-on in the world of Israeli real estate.

And to invalidate the accusation often levelled at me by certain former teachers at Hasmonean High School for Boys (and even Girls), that I am a good-for-nothing coward who can only ridicule their poor, defenceless (now at least!) ex-colleagues, I thought I would do something for the general good: provide a list of things to beware of/look out for when entering the minefield that is the Israeli property market . . .

Agents. However much they may attempt to appear honest and decent– essentially, by insisting on making ingratiating small talk in crap English – don’t trust a single one of them: they will sell their own mothers to do a deal (though they are no different from most of their UK counterparts in that respect: it was once proposed to me by an agent from a large office in Golders Green that, in exchange for a George Graham envelope, he would “make sure” that I secured a property ahead of a rival bidder).

In spite of insisting that they will not – even cannot – accept any less than their “standard” 2% commission, most Israeli metavchim (agents) will eventually agree to 1.5% for a purchase (and 1% for a sale). Don’t waste your time arguing the 2% when signing their paperwork – most will be inflexible at that stage – but rather wait until you find something that you like, and then tell them that you are not prepared to pay more than 1.5% (for an expensive property – especially if you haven’t had them schlepping around with you for three years! – you may even be able to get them down to 1-1.25%): unless there is another buyer in the wings, or they have long-term exclusivity on the property, they are unlikely to want to risk losing the deal. (Most things in Israel – from fruit and veg in the shuk to interest in the bank – are entirely negotiable: most memorably, I once overheard Avi, a Rothschild kiosk regular, express his bewilderment that a Fifth Avenue (New York) shop assistant would not, after he had purchased a pair of shoes, throw in a pair of socks and/or shoe polish!)

And don’t be a freier after a transaction, either. Following the sale of Melchett, and the agent being handsomely compensated (for what turned out to be a few days’ work), I phoned to thank him. His response? “Don’t you think I deserve a bonus?” “Be’tachat shelcha” (in/on your backside), I replied (perhaps foolhardily, in an area as homo-friendly as central Tel Aviv). There is an extremely prevalent “shitat matzliyach” – have a go/it’s worth a try/if you don’t ask, you don’t get – mentality in Israel. And it is one that is very difficult to come to terms with for those of us who emanate from countries where we were used to dealing with people who had both a sense of personal self-respect and professional pride.

Builders. If you are planning a shiputz (renovation) of your new property, do your homework: meet several kablanim (builders) on direct recommendation, request to see jobs they have done, talk to former customers (not in the kablan’s presence! One recently gave as a reference a woman who told me not to use him!), and obtain quotes based on a detailed architect’s plan of the proposed work. From my experience, discrepancies between quotes (relating to an identical plan) can be huge.

Get the kablan you ultimately select to sign a contract – even a simple one, in English if necessary – setting out your expectations, and payment in stages. Hold back a sizable sum (perhaps as much as a quarter of the total) until he has hung the last picture on your wall (it is remarkable what kablanim will do in order to get their hands on that final cheque!): getting your shiputz completely, and cleanly, finished is the most difficult task of all.

It is quite common for Americans (with more bucks than sense) to hand over the keys to their new holiday homes to kablanim, to disappear back to the US, and to merely – without even employing an architect – require a finished product upon their return to Israel. As a result, there are many kablanim, in Jerusalem especially, who, upon hearing a foreign accent, will pick a global price for your shiputz out of thin air, i.e., without seeing a plan – indeed, they will often tell you that “You don’t need an architect” – or even understanding what it is that you want to achieve. Should you encounter such a kablan, run a mile! Otherwise, you will end up paying a lot more for your shiputz, and not even know what it is that you have received for your money.

But it is not just agents and builders that one has to be wary of here . . .

Architects. When your nice, obliging Israeli architect – or, seeing as this has turned into a Hebrew lesson, adrichal – does what he or she has contracted to do, i.e., takes you shopping for flooring and sanitary ware, etc, don’t forget that, almost without doubt, he will be receiving a healthy percentage of your total bill as an incentive for him to bring more clients to the store. If you ask him about this, he will either deny receiving anything or spin you some yarn about how his  percentage is paid by the shop owner out of a special account, which means that you, the client, loses nothing. This is a crock of shit. Whatever sum is received by your architect could – indeed, should– be knocked off your bill instead. And, if you are paying your architect a fee, you might well (like me) ask yourself why he should be profiting further – and without any transparency – at your expense.

The solution? After your architect has taken you to his favoured retailer – often the most expensive in town (what does he care? Anyway he is spending your money, and the larger your bill, the larger his kickback!) – and you have obtained a written quote, find a store with better prices (your kablan might help you with this) and insist that your architect accompanies you there. He cannot refuse. Of course there is nothing to stop him (as I recently discovered, fortunately in time) taking the owner to one side and demanding a percentage (10% in my case), and threatening that, if he doesn’t get it, he will instruct you not to buy there. Though, if you lay down the ground rules with the store owner from the outset – letting them know that you are wise to what goes on here, and that you are the one who should be receiving any available discount – you minimize the danger of getting ripped off.

Lawyers. From my experience, no more more trustworthy necessarily than agents. A Jerusalem ‘lawyer’ last week demanded “a few thousand shekels” from me for another lawyer, “with connections” (unspecified), to put straight a significant oversight in services for which I had already paid. The fact that said ‘lawyer’ unashamedly informed me that he “only takes cash” (and that he was recommended by an ex-Hasmo!) should, perhaps, have been sufficient warning (to quote the great Ivan Marks, “It is always the frum ones”). My Tel Aviv lawyer is now resolving the problem, gratis.

You should not have to pay a lawyer any more than 0.5% on a purchase or sale (though, again, for a pricey property – perhaps in the region of 3 million shekels plus – you may be able to get them down to 0.3% . . . especially if you make it known to them that you have other options!)

And an important rider to all of the above: even if you think that you have absorbed it all, or knew it already, bear in mind that there could always be some “combina” (“arrangement,” usually shady) that you are totally unaware of. Be wary of everyone in the world of Israeli real estate: most of them are “at it.” In fact, the more someone attempts to reassure you that he is not looking to profit at your expense – or, at least, any more than you have already contracted for him to – the more suspicious you should be!

Finally, do your homework, and don’t be shy to ask questions of several competitors in the same field: from my experience, being a nudnik (nuisance) is the only hope that you have of discovering what is really going on here.

And yes, this is all, of course, terribly disappointing for the oleh who moved here out of a sense of idealism. But the sooner you accept the reality of life in Israel, the sooner you will feel at home here (even if you never wish to become one of them!) Be’hatzlacha.

[See also Israelis, agents of our own demise? I will be more than happy to provide details of professionals and/or stores with whom I have been satisfied (relatively, at least!) to anyone who may be interested (and without receiving anything in return, from you . . . or them!) Just comment below, leaving your e-mail address (viewable only by me) if you prefer the correspondence to be in confidence. And please comment, too, if you happen to hear of a Tel Aviv apartment for rent – I have to be out of Melchett by August 20th – to help me avoid becoming an unwilling volunteer in addressing Anglo underrepresentation in the tents . . . and this blog becoming rothschild mike!]

http://www.justgiving.com/mike-isaacson/

Israelis, agents of our own demise?

It is extremely seldom that any aspect of the Rotter-in Chief‘s religious education interferes with his relatively secular equilibrium. But Biblical lessons and warnings about the existential dangers to the People of Israel from certain of its own behaviours are starting to appear to me worryingly relevant for the modern State of Israel.

Last month, a real estate agent in Jaffa offered to bring me in on a deal, which was about to close, if I agreed to increase his commission from two to three percent (no little chutzpah in itself). In the end, no details of the property were revealed, but, last week, I was introduced to the seller by chance in the local supermarket. The deal had hit a hitch, and he brought me to the apartment to take a look.

The following day, the agent – who had somehow heard about this opportunistic meeting – called to inform me that, if I were to purchase the apartment, I would still owe him the commission. “Ata yechol likfotz” (literally “You can jump”) I advised him in my most fluent Hebrew (i.e., that of abuse!), warning him to never call me again. (I am seriously considering obtaining an agent’s license, in the – perhaps naive – belief that an honest practitioner will soon attract clients.)

In Golders Green a few years ago, a not particularly bright (and soon to become unemployed) agent, who knew I was a solicitor, offered to reveal to me the competing bids for a house in return for an envelope stuffed with cash. While such behaviour should not, therefore, be surprising for Israel’s real estate agents – to whom Woody Allen’s assessment of politicians, “a notch below child molesters”, could equally be applied – it is for its lawyers, so many of whom seem more concerned not to miss out on a piece of this country’s economic pie than to represent the best interests of their clients.

Introducing me to a deal in Tel Aviv a couple of years ago, my former lawyer quoted me a price which I knew to be around $300,000 above the asking one (which I discovered had not been increased). A short while later, the lawyer informed me that the property had already been sold. Smelling a rat, I called the seller to confirm. It was still on the market. But my lawyer probably had a better combina – surely the most important word in Hebrew slang, referring to a non-transparent and usually far from kosher commercial “arrangement” – with another client.

Israel’s real estate lawyers are also renowned for tipping each other off about deals and carving up between themselves, at lower than market values, properties that should be going to auction (following bankruptcies and liquidations). Of course, there are corrupt lawyers in the UK too. But they are very much the exception. Here, dodgy lawyers – especially in the field of real estate and based in Tel Aviv – often appear to be the rule . . . so much so that discovering a straight one sometimes feels like winning the Lotto.

Finding a property here, especially an older one with character, without some major encumbrance – usually not apparent on first inspection or revealed (and sometimes even concealed) – is also the exception. I have come across many with entire rooms appropriated from communal space, and one in Jaffa where virtually the entire living room floor turned out to have been built without a permit. The Israeli real estate market can be a minefield, and it helps to be naturally suspicious, a yekke, and to have an extremely thorough lawyer.

And the surprises don’t always end with the signing of the contract. When I received the keys to my current apartment, on Melchett, back in 1999, I walked in to find that a kitchen cupboard – a “fixture” in legal terms – had been removed. Leaving their homes for the very last time, Israelis are notorious for taking every last light bulb with them.

The shortage of affordable real estate in Tel Aviv is blamed, naturally, on the French ‘invasion’ – a commendable focus for resentment by any standards – but word on the rechov (street) also has it that large investment companies are snapping-up properties before they even hit the market (this in a country where over a third of the primary income is reported to already be controlled by a mere 19 families).

Even when you think that you have found a property, and offered the asking price, the boom in prices here over the past five years has caused many Israeli vendors to greedily wait for an even better offer.

My diagnosis of our sickness is simple (if a little racist, and without obvious cure): there are just too many Jews here.

And they are not deterred, as many Diaspora Jews are, if not by moral or religious considerations, then at least by concerns about incurring Jewish communal opprobrium and/or provoking anti-Semitism (“What will the goyim say?”) In a country where questionable ethics and corruption run from the Prime Minister down – and Ehud Olmert is only the most recent example – very few people have any such compunction. It is very much the law of the jungle.

Perhaps most depressingly, whenever I express disappointment at such behaviour, the reaction from my fellow Israelis is usually one of resignation: “Why are you even surprised?” There is also the oft-heard justification that “If everyone is at it (i.e., even our leaders), then why should I be the only freier (sucker) to miss out?!”

The People of Israel would appear, once again, to have lost its moral compass. Let us just pray that that poisonous Persian dwarf is not God’s instrument of correcting us.

[If any overseas readers of melchett mike are interested in investing in real estate here – especially in Tel Aviv or Jaffa, something I would highly recommend – I will be happy to share the benefits of my experience and findings . . . free of charge!]