Buying a new property is a major financial decision. In Israel, some payment options offer increased security and flexibility for buyers. One of the most advantageous formulas is to pay 15% of the total amount upon contract signing and settle the remaining balance on delivery, without indexation. Here’s why this payment method can be beneficial.
1. Reduced Initial Financial Burden
Paying only 15% at contract signing reduces the immediate financial strain. This means the buyer does not need a large mortgage upfront, making it easier to secure better financing terms.
2. Protection Against Inflation and Price Increases
In Israel, many real estate contracts include indexation based on construction price indices. Opting for a non-indexed payment ensures that the property price remains fixed, avoiding unexpected cost increases that could affect the final investment.
3. More Time to Arrange Financing
With the balance payable upon delivery, the buyer has extra time to prepare financing. This allows for better cash flow management, comparison of loan offers, and selection of the most suitable financial strategy.
4. Protection from Market Fluctuations
Paying most of the amount upon delivery means the buyer is not exposed to real estate market fluctuations during construction. In case of delays or developer issues, the investment remains protected.
5. Limited Risk in Case of Developer Issues
By paying only 15% at signing, the buyer limits financial exposure in case of delivery delays or compliance issues. This provides stronger leverage in negotiations if disputes arise with the developer.
6. A Strategic Advantage for Investors
This payment method is particularly attractive to investors. It allows them to commit fewer funds upfront while keeping their capital available for other financial opportunities until the property is delivered.
7. Optimized Budget Planning
By planning the purchase with this payment structure, the buyer can better anticipate expenses and prepare for costs associated with moving in or renting out the property.
Conclusion
Choosing a 15% payment at contract signing and the balance on delivery, without indexation, provides financial predictability, enhanced security, and improved budget management. This option is a smart strategy for buyers and investors looking to optimize their capital and minimize risks.
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