Mitzpeh K’ramim | Ramat HaRoeh Ramat Bet Shemesh
Answers to Frequently Asked Questions March 2014
Q1: Where is Ramat HaRoeh?
A1: Ramat HaRoeh is the eastern flank of Ramat Beit Shemesh Aleph which is located to the south of “old” Beit Shemesh. It is a 35 minute drive to Jerusalem.
Q2: What will be built in Ramat HaRoeh?
A2: The neighborhood will include a total of 469 residential units, 372 apartments and 97 units in single and two family homes. In addition, the neighborhood plan calls for numerous public buildings.
Q3: What about the infrastructure?
A3: The Ministry of Housing is responsible for the infrastructure including roads, sidewalks, parks, underground sewage and water lines etc.
Q4: What is the time frame for the neighborhood?
A4: Work on the infrastructure began in July, 2013 and will continue well into 2014. Construction of residential units will begin by July, 2014. The first units will be ready for occupancy 24 months after the beginning of construction.
Q5: Why buy now?
A5: In every Chazon & Galili project built for the religious community over the last three decades (!!!), the prices of units have risen dramatically over the course of construction and especially at completion and after occupancy. In certain cases, the “after completion” price of units has been 50% higher than the “on paper” price. This was true for the units in Ramat K’ramim, our flagship project in RBS Aleph -units which sold for 2,000,000 NS were re-sold 24 months after contract for as much as 3,000,000 NS. In Yad Binyamin, units which sold on paper for $250,000 were resold three years later for over $600,000. Units which were sold in RBS G-1 for 800,000 NS three years ago are now being resold for 1,200,000 NS.
In addition, early purchase means a better choice of units and greater flexibility in ordering changes and additions. Another advantage of early purchase is the opportunity to spread the payments over an extended period.
Q6: What is Chazon & Galili building?
A6: They are building five buildings of 18 units each-a total of 90 units. The project is called מצפה כרמים ברמת הרוא”ה, Mitzpeh K’ramim in Ramat HaRoeh.
Q7: What are the advantages of Mitzpeh K’ramim?
A7: There are several important advantages:
- Mitzpeh K’ramim is centered around a public park which is accessed from the buildings. The projects located below Mitzpeh K’ramim are all one or two family units which will not block the view. This also means lower density housing, quality neighbors and higher property values.
- The project faces the open view towards the green valley and beyond towards the Judean Hills surrounding Jerusalem. As a result, almost all of the units in the front of the buildings unit will have an unobstructed breathtaking view. Those in the back of the building face onto the landscaped park.
- The project is located in close proximity to the site envisioned for the Yeshiva/Community Center.
Q8: What kinds of units are being offered?
A8: Please refer to the property listings here which lists the units by floor, gives the number of rooms in each unit and details any special characteristics such as private gardens and/or large mirpesot / balconies.
Q9: What is the size of each unit?
A9: What do you mean by size? Whoops, that was a question and not an answer. The size of a unit is measured by law according to its exterior measurements-i.e. external walls and internal walls are included in the area. In addition, the area of the balconies is listed separately. The size of the various units is listed in the attached chart.
Q10: How much do the units cost?
A10: View current prices here.
Q11: Are these US Dollar prices?
A11: Absolutely not. The prices are quoted in shekels and are in no way linked to the dollar-shekel exchange rate. We understand that this may cause some uncertainty for buyers will dollar assets and income. However, the Israeli real estate market abandoned the dollar many years ago, and there are no signs at all of a return.
Q12: What is included in the price and what is not?
A12: The price includes 18% Value Added Tax. If VAT goes up or down, the unpaid balance is automatically adjusted accordingly. The price includes all the items in the standard specs as detailed in the attached “Highlights of Technical Specifications”. The price does not include 1.5% legal fees.
Q13: What other costs will I pay?
A13: There are several additional costs:
- All purchasers of real estate in Israel are required to pay “Mas Rechisha”, real estate purchase tax. At present, first time Israeli buyers enjoy an exemption on the first 1,470,560 NS of the purchase price and pay 3.5% of the amount above this up to 1,744,270 NS. Other Israeli buyers are required to pay 3.5% on the first 1,089,350 NS and 5% on the amount above this sum. Non Israeli buyers pay 6% of the cost of the unit.
- Your own attorney’s fees.
- Deposits on utility meters (water, gas and electric): This amount should not exceed 2,000 NS.
- Real estate agent’s fees of 1.5% of the cost of the unit.
- Fee for costs involved in the registration of the unit in your name in the Land Registry (“tabu”)-approximately 2,500 NS
Q14: What other expenses will I incur?
A14: Obviously, the cost of furnishing the unit is an “additional” cost you will incur. This includes the cost of major appliances (fridge, washer, dryer, stove top, oven etc.) and wall closets which are not included in the specs. If you decide to upgrade the kitchen cabinetry and work surfaces, you will incur extra costs. Air conditioning is not included in the specs and will incur extra cost. The estimated costs of the above for a 4 room unit are as follows:
- Appliances: 20,000 NS
- Wall closets 15,000 NS
- A/C: 15,000 NS
Q15: The price is “linked to the cost of building index”. What does this mean?
A15: The Government Statistics Bureau publishes a monthly index of residential construction costs known as “madad hab’niyah” (BCI=Building Cost Index). This index reflects the increase and/or decrease in the actual costs of residential construction based on a wide variety of factors including the costs of materials, labor, taxes etc. Almost all developers in Israel link their contracts with purchasers to this index to protect them against increasing cost of construction. Practically, this means that each payment you make is adjusted according to the changes in the index from contract signing to the date of payment. If, for example, a payment is due in the amount of 200,000 NS, and the index has risen 2% from contract signing, then the actual payment due is 204,000 NS.
Q16: How much more will the unit cost due to the above linkage?
A16: Only a prophet can tell you how much the index will go up (or down) over the life of your contract. What we do know is that during the course of the last 12 months, the index went up by less than 2%. The average “life” of the contract is 18 months. Based on these figures, you can expect the linkage to add about 3% to the cost of the unit (if the unit costs 1,300,000 NS, the linkage will add some 39,000 NS). Again, this is based on past performance and no one can predict what will happen in the future.
Q17: What is the procedure for purchasing a unit?
A17: The first step is to choose the unit you want, based on the plans and the prices. The next step is to sign a “request to purchase” form (an example is attached) which details the unit, its cost and the standard payment plan. The unit is officially reserved when a 1.5% non refundable deposit is received with the signed request to purchase form.
Q18: What comes next?
A18: We will submit a draft contract to your attorney (see the next question), who will negotiate with our attorney regarding changes and additions that he/she requests. When the final draft is ready, a date will be set for signing.
Q19: What else does my attorney do?
A19: This depends on your agreement with the attorney. If you are purchasing from abroad, you will need to appoint someone to sign the contract for you and assign him/her a Power of Attorney. If you are in Israel, the POA can be notarized by any notary here. If you are abroad, there are other options available and your attorney can guide you on this matter. If you are obtaining mortgage financing for the purchase (see a Q on this below), and you are abroad, your attorney can assist in this procedure too. Obviously the attorney’s fee is a function of the services provided.
Q20: What is the standard payment plan?
A20: At contract signing, 15% of the price is payable. This is “set in stone” since the bank which is financing the project and providing the guarantees (see Q on this below) will not approve a sale unless 15% is paid at contract. An additional 25% is due within 30 days of contract. 55% is divided into several payments (typically 5 or 6) which are defined by both a date and a stage of construction-whichever comes later, so that payments do not accrue unless construction continues at site. The final payment is 5% at completion. There is some flexibility in regard to the payments.
Q21: Are my payments guaranteed?
A21: Yes, of course. Each payment is deposited directly by the purchaser into the special project account administered by the bank financing the project (Bank of Jerusalem). Upon receipt of each payment, the bank instructs the insurance company backing the project to issue a policy guaranteeing the payments in the case of insolvency or bankruptcy of the developer (חס וחלילה).
Q22: What about mortgage financing?
A22: The mortgage market in Israel is sophisticated and responsible (no “subprime” mortgages here). Typically, the mortgage banks will loan Israelis up to 60% or even 70% of the value of the unit in a long term mortgage (20-30 years, depending on the age of the borrower). There are a variety of mortgage rates available-fixed rates, linked rates, etc. All this holds true for Israeli residents. Typically, foreign purchasers prefer dollar linked mortgages in which case the interest rates are based on LIBOR. You should follow up on this by turning to several banks and comparing their offers. Many of our buyers in the past have used mortgage brokers who do the “shopping” for them (and obviously charge for their services). Keep in mind that the latest Bank of Israel instructions to the banks limit the amount of mortgage financing for foreign buyers to 50% of the price of the unit.
Q23: What about changes and additions to the unit?
A23: Although we would be happy if all our purchasers stayed with the standard plans and specs, we try to accommodate their requests for changes and additions. There are no “set in stone” rules in this regard, but some of the limitations are as follows:
- Changes and additions which require an updated building permit will not be implemented.
- Changes and additions which may delay the completion of other units in the project will not be implemented
- Changes and additions which violate the building code in Israel (for example, too narrow a room, or non-ventilated bathroom, etc.) will not be implemented.
- In general, changes and additions incur additional cost. Implementation of the changes and additions depends on full payment of the appropriate bill.
- In general, changes and additions delay the completion of the unit.