Why deals in Herzliya Pituach sometimes fall apart
Let us understand why deals sometimes explode after the main issues – price, terms of payment and occupancy date – were agreed upon (thanks god). The parties are now find themselves in a very fragile situation: the buyer is under the impression he has paid too much. The seller is under the impression he got too little. Now is the time for the lawyers of both parties to exchange contract drafts and to make an appointment for signing the final contract.
This is exactly the time that some problems may pop out. Most of the issues that may put the signing in a risk (misunderstandings, misinformation) come as a surprise while none of the parties were aware of them. A surprise causes fear or uncertainty which causes pressure which causes lack of flexibility which is the main reason that cause the termination of a deal by one of the parties.
Here are some of the reasons for a good deal to fall apart. Most of them could be solved if dealt in the negotiation phase or if properly dealt by both lawyers:
Illegal additions to the house
Illegalities exist in most of the houses in Herzliya Pituach. There are some that can become legal by paying a betterment tax to the municipality. There are lawyers that will recommend their client to avoid buying any kind of property with an illegality. In this case the client will not be able to buy something at all. There are professional lawyers who know how to coop with such problems and will put the necessary paragraphs into the contract to protect their buyers. There are illegalities which were known to the seller and he did not mention them to the buyer either because he thought it will not be revealed or because he thought they are insignificant. There are illegalities of which the seller was not aware of, either because in the past it was not considered as illegality or because he bought the house with them and none of the lawyers or the municipality authorities considered them as a problem. Clients from the U.S.A. and England tend to be very cautious about illegalities and it is the responsibility of the broker to inform the clients about them.
Rate of exchange
The rate of exchange of the bank of Israel is usually the common way to express the money value that should be paid. A dispute can come out about the date in which the rate of exchange should be calculated – the date of the agreement on the price, the date of the signing of the contract or the date of the actual payments. In Israel such discussion may involve considerable sum of money.
What is included in the house one buys ?
After a tiring negotiation about the price and the terms of payments there left only a little patience to discuss in details each unit of the equipment, furniture, gadgets etc. that remain or are being taken by the seller. A dispute about it towards the last minute before the contract signing can cause an explosive situation. I have witnessed an unpleasant discussions over a bench in the garden or a small electric appliance.
A situation in which the buyer reveals during the signing process that he has to wait for the bank confirmation because he asked for a mortgage, might cause a crisis in the last moment. On the other hand, a problem may arise when the lawyer of the buyer reveals that the property is mortgaged by a considerable sum of money which is higher than the sum which was agreed as the first payment. Without covering this sum by the buyer it may cause a major complication towards the completion of the deal. The detailed preparation of the broker concerning the initial financial terms of the agreement between the buyer and the seller will prevent such problems.
More than one seller
In case more than one seller are involved ( few inheritors, divorced couple, children) the agreement should be verified by all the sellers in order to prevent a last objection from one of the parties concerning a matter which was not discussed with him/her.
There are many other reasons for a deal collapse so the agreement conditions that are conveyed to the lawyers for preparing the contract should be very well prepared by the broker.