Private Assessor VS Bank Assessor
May 02, 2019
There is a difference between using a private assessor when valuing a property or apartment in Israel than an assessor that is doing the report for the bank for a mortgage. In the latter case, the bank will provide you with a list of assessors that they work with, and then you will choose from the list.
The first difference is the price. When taking a private assessor, the price range for an ordinary apartment will be between NIS 2,000 – 3,000. When taking a bank assessor for a mortgage it will cost significantly less, between NIS 600 – 800. A reason for the large difference in price is that the assessment for the bank is short and brief, where as a private assessment will be long and detailed.
Furthermore, an assessor from the bank will usually value the property lower than market value to satisfy the bank. Banks want the price to be lower in the case of a foreclosure and a quick sale, there won't be a problem selling the property, and the mortgage will still be covered.
What a private assessor might take into consideration when valuing the property, such as: potential building plans, potential zoning in the surrounding area, and public transportation changes, a bank assessor, will not equate this into their final value. This is only included once these processes have already begun.
When using an assessor from the bank it's important to note that they hold the interests of the bank first. Meaning, for them to remain on the list of assessors from the bank, they need to abide by the bank's guidelines.
When you are about to close on an apartment in Israel, and your capital is limited, its important to bring the assessor before closing so that the buyer will be prepared with the amount of money to pay. In addition, in case the bank assessment will be lower than the price you have agreed to pay, it doesn’t necessarily mean that you over paid.
Here at Alon Central we guide you throughout the negotiating process and walk you through all the steps of closing on an apartment in Israel, and we are happy to suggest and recommend additional professionals in other fields as well.