What is the cost of a real-estate lawyer in an apartment purchase in Israel?

We all know that real-estate transactions are complex and that the cost of such transactions may reach tens of thousands of shekels that must be paid for a lawyer, a mortgage broker, an appraiser, preliminary checks, and other expenses, as needed. This article discusses the cost of a real-estate lawyer in Israel —the basic fees, the formulation of a contract, and professional advice—probably the most essential cost among all the professionals that must be hired when purchasing an apartment.

You should know at the outset that there is no uniform price for hiring a real-estate lawyer. Each transaction is different, and each type of transaction has its own pricing. Another factor affecting the price is the type of lawyer that you hire. A very experienced lawyer from the Central District will cost you more than a beginning lawyer from social periphery areas in Israel. But the price gap is not necessarily worth the risk of being represented by a lawyer with no experience, even if the lawyer lives at walking distance from you.

RECOMMENDED PRICE TABLE BY THE ISRAEL BAR ASSOCIATION (IBA):

The IBA, which is the bar association for all Israeli lawyers, has published a tariff table with the recommended lawyer fees for second-hand apartment sale and purchase transactions.

Percentage Fee to Lawyers	Apartment Price
2%	First 82,509 ILS
1.5%	At least 245,435 ILS
1.25%	At least 333,021 ILS
1%	At least 1,322,011 ILS
0.75%	At least 1,982,976 ILS

Note that this is the tariff recommended by the IBA, but individual lawyers may choose their own tariffs, and customers have the choice of which lawyer to hire based on the lawyers’ prices.

THE COMMONLY USED TARIFF:

In practice, almost all lawyers create their own tariff table, which ranges between 0.5% and 1.5% + VAT depending on the complexity of the transaction.

For example, in a 2,000,000 ILS apartment transaction, the common tariff is 0.75%, which amounts to 15,000 ILS. As stated above, there are lawyers who charge less than this, as well as lawyers who charge more.

BUYING AN APARTMENT FROM A CONTRACTOR:

The IBA has set a minimal tariff for representation in an apartment purchase transaction when buying a new flat from a contractor. The tariff is constant and is set to 0.25% of the apartment value as stated in the contract. This tariff is lower than in a second-hand apartment transaction since less work is required of the lawyer.

The current common price is similar to, but does not exactly follow, the prices in the table published by the IBA. The common price charged for representation by a lawyer in an apartment purchase from a contractor is 6,000 ILS + VAT, in total.

WHEN DO YOU PAY THE LAWYER?

As a general rule, it’s accepted that the person hiring the lawyer (the buyer or seller) pays the lawyer when signing the contract, despite the fact that the lawyer has already begun their work beforehand by preparing the contract and sometimes also conducting preliminary checks.

In any case, the parties have the choice to decide together when to pay the lawyer and whether to pay all at once or in two or three instalments as the transaction proceeds.

Cost of a real-estate lawyer in Israel – a summary

The issue of the cost of a lawyer is important but not acute. The gaps in the prices between the various lawyers in the market usually only amount to several thousand Israeli shekels, while the difference in the service provided by an experienced lawyer as opposed to a beginning lawyer is much more significant. A small mistake in the contract may sometimes cause a loss of tens and even hundreds of thousands of Israeli shekels.

If you are planning to purchase an apartment, contact us today and get a quote from an experienced professional real-estate lawyer.