Guest Author – Aaron Krasner is the owner of Anglo Mortgages, a mortgage brokerage company specializing in Israeli loans for Anglo borrowers.
Introduction: Navigating the Dynamics of Israeli Real Estate Negotiation
In the fast-paced world of Israeli real estate, negotiation isn’t just a skill; it’s a necessity. Every deal, every transaction, is a delicate dance of give and take. And for one 69-year-old client who could not secure life insurance, the stakes couldn’t have been higher. Little did he know, his journey would become a testament to the power of negotiation and a refusal to take ‘no’ for an answer.
Meet Mr. Cohen: Challenges in Israeli Real Estate and Life Insurance
Meet the client, Mr. Cohen. A 69-year-old facing hurdles in securing a mortgage without life insurance in the Israeli real estate landscape.
Mr. Cohen had spent a lifetime building a comfortable nest egg for retirement. But when the time came to secure a mortgage, he found himself facing unexpected hurdles. With impaired health preventing him from securing life insurance, and no option to add children as a co-signer, conventional lenders were hesitant to offer favorable terms.
Enter the first mortgage broker with a proposal: a1.2m nis reverse mortgage loan on a 6.7% variable interest rate. Mr. Cohen would only pay interest on the debt, with the full capital balance due in one balloon payment in 15 years. While it seemed like a lifeline at first, Mr. Cohen sensed that better options might be out there, so he called us for a second opinion.
Advocacy in Action: Negotiating Creatively in the Israeli Real Estate Market
Armed with expertise and a relentless drive, our team stepped in to advocate for Mr. Cohen’s best interests with other lenders. With a deep understanding of the Israeli real estate market and a knack for finding creative solutions, we set out to secure a deal that would defy expectations.
Negotiation isn’t just about haggling over numbers; it’s about thinking outside the box, building relationships, and finding common ground. And that’s exactly what we did. Through countless phone calls, meetings, and negotiations, we worked tirelessly to find a lender willing to offer fundamentally better terms. And against all odds, we succeeded.
The new bank offered a 1.65m nis loan (450k nis more than the first offer), at a fixed and semi fixed rate of 4.75%, with a 21-year amortization.
- In other words, they were offering him a loan that would run to the age of 90 with a full life insurance waiver.
- This would reduce the interest cost of the loan by around 500k nis.
- And also means that the full loan amount will be returned to the lender in small monthly installments.
- No balloon payment at the end of the term.
Amidst the whirlwind of negotiations and paperwork, there was a ticking clock that added an extra layer of urgency to Mr. Cohen’s story.
When we noticed a temporary drop in interest rates costs, we knew we had to act fast in order to lock in the lower rates for Mr. Cohen. With focus and round-the-clock dedication, we streamlined the process. What might have taken 4-8 weeks was accomplished in three, securing a further 0.25% reduction in the interest rate. For Mr. Cohen, it wasn’t just about securing a favorable mortgage; it was about seizing an opportunity before it slipped away.
Victory Achieved: A Secure Mortgage
And so, after weeks of negotiation and hard work, the deal was done. Mr. Cohen had secured a mortgage that would allow him to enjoy his retirement with peace of mind in the unique realm of Israeli real estate. It was a victory not just for him, but for the power of negotiation itself.
Conclusion: The Negotiability of Everything in Israeli Real Estate
The story of Mr. Cohen is a reminder that in the world of Israeli real estate, everything is negotiable. With the right strategy and determination, even the most daunting challenges can be overcome.
—-Aaron Krasner is the owner of Anglo Mortgages, a mortgage brokerage company specializing in Israeli loans for Anglo borrowers.
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