The Purchase Contract — A Fully Binding Legal Document
The purchase contract is the legal foundation of the entire transaction. From the moment you sign it, you are bound by everything it contains — whether you read it or not. Therefore, you must read and understand every clause before signing, and use an experienced lawyer who represents your interests.
What Must Be in the Contract?
Parties' details: Names, identity numbers, and addresses of sellers and buyers.
Property details: Exact address, block and parcel number, size, and description of what is included (furniture? appliances?).
Price and payment schedule: Total amount, staged payments, dates, and payment methods (cheque, bank transfer).
Handover date: When the property will be transferred to you, and in what condition.
Security: Bank guarantee on funds paid before registration.
Breach mechanism: What happens if either party fails to meet their obligations — penalties, cancellation.
The Payment Stages — How It Typically Works
In Israeli real estate transactions, payment is usually split: 10%–20% on signing the contract (as "initial payment"), 70%–80% subsequently (typically upon completion of the mortgage arrangement and registration of the caveat), and 10% on handover of the property.
Money transferred before Tabu registration is usually secured by a bank guarantee issued by the seller's bank — so that if the sale falls through, you get your money back.
Caveat Registration — What Is It and Why Does It Matter?
A caveat is a registration in the Tabu that signals a contract has been signed on the property. It protects you as the buyer — it prevents the seller from selling the property to another person, mortgaging it again, or taking other actions. Your lawyer will register the caveat immediately after the contract is signed.
What to Check on Handover Day
On the day of handover, come with your lawyer. Check: the property is in the agreed condition (no damage since the last visit), everything agreed to stay has stayed (appliances, furniture, air conditioning units), the water and electricity meters have been transferred to your name, and you have received all the keys.