Examine yourself: What is the real price of your apartment?

Prices just keep going up, but appraisers sometimes overestimate the property, making it difficult for buyers to get a mortgage.

The professionals reveal how you will know what the value of the apartment you want to buy or sell really is

Ruthie having a good name, guest column

08/12/2021

Wednesday, 08 December 2021, 12:23 Updated: 12:56

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Prices are rising and an apartment that 5 years ago we could have bought for NIS 1.6 million is worth 2.8 million today - and that too is temporary.

So how and why can the appraisers not catch up when it comes to valuing the apartment?

And how does this affect us when we come to buy or sell an apartment?

It all stems from the comparison approach.

In this approach we compare the property in question to properties as similar as possible in its immediate vicinity, but it has limitations.

For example, it can only be done if there are enough similar real estate properties sold in the vicinity of the property in question that meet the conditions.

So why do many appraisers still prefer the comparison approach? The convenience and simplicity, both in their work and for the client and his understanding. Over 20 years of experience and following my appraisal studies from the past year, less connects to the comparison approach, mainly because it is difficult to compare asset to asset.

I believe that in homes, like people, one should not look at the jar but at what is inside.

More on Walla!

And if it's a real estate bubble at all? Experts: "The explosion will be in a few years ahead"

To the full article

There are a lot of deals in crowded areas, but what about places where it is difficult to estimate a price? (Photo: Reuven Castro)

The gap between the months of the year

A few months ago we sold a penthouse in an area of ​​about 200 square meters built with a 300 square meter balcony that includes a pool - 500 square meters in the city of Modi'in. With finishes of the highest quality, and a luxurious architectural design.

Then the appraiser came to evaluate the property, but since he could not compare, he would price it much lower and the buyers did not get the mortgage they needed from the bank, but a lower mortgage so the deal exploded. Shortly afterwards to a lovely family.

The data published by the Tax Authority and the Real Estate Agency, for example, are published four to six months after the date of the transaction. During this period of time, the real estate market often changes. In 2021, we saw how much it is rising soon. The prices of the beginning of 2021 are much lower than the prices of the end of that year. In such a situation, the appraiser of November can not expect the change and changes of the market - and certainly can not estimate the real price of the apartment as of the current period, so the appraisal value of the apartment in November, is much lower than the purchase price.

Another point is the matter of supply and demand.

The closures and the corona did their thing, and people have spent less money in the last two years on leisure and abroad, and decided to invest the money in upgrading the existing house and apartment, moving to houses with balconies, gardens, etc. At the same time, there were no new construction starts. Apartments in major cities and relatively few future plans have been approved - so we are currently in a bottleneck of supply and demand.People want to buy, are willing to pay but have nothing to buy, which leads to rising apartment prices.

Rises, rises and will continue to rise.

Real Estate in Gush Dan (Photo: Reuven Castro)

So what can be done

The combination of low inventory and high demand + a gap of 4 to 6 months in the purchase updates at the Tax Authority and the Madlan website, causes prices to rise exponentially - and unfortunately more will rise. So what can be done? Talk, consult, hear, ask those who know and know the prices Whether you are buying an apartment or want to sell it, you should consult with your local real estate consultants in the city where you are buying / selling the property.

True, there is a brokerage fee (and between us, you can bargain for it), but this fee is kind of zero compared to the amounts you can earn / lose (depending on which side you are in the equation) when you buy / sell real estate.

Wish us to return to reasonable prices, New just as you are looking for.

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