A guide for sellers

What is my apartment worth?

Before setting a price, it is worth knowing where the numbers come from. A short guide to checking for yourself, and to what deserves attention before the property goes to market.

Most sellers arrive at a price in one of two ways: what the neighbour got, or how much money they need for their next home. Neither has anything to do with actual value, and both cost money — the first through a price that is too low, the second through months sitting on the market.

Step one: real transactions, not asking prices

A price in an advertisement is a request. A price in a transaction is a fact. In sought-after areas the gap between them usually runs from a few per cent to ten per cent and more, depending on the market.

Transaction data is open to everyone: the website of the Israel Tax Authority (רשות המסים, Rashut HaMisim) publishes reported property transactions by block, parcel and address (גוש, gush; חלקה, chelka). Search for the street, filter to the past year or two and to residential apartments only — a shop or an office at the same address will distort the price per square metre — and look at three things: price, area, and date.

How to work out the price per square metre

Divide the transaction price by the registered area. Do this for five to seven comparable transactions and you get a range. That is the starting point — not the answer.

What actually moves the price

Two apartments in the same building can differ by hundreds of thousands of shekels. These are the factors that matter:

• Floor and lift — a high floor with no lift is the most expensive drawback of all. With a lift, a high floor is an advantage.
• Parking — in dense areas such as central Gush Dan this is sometimes the largest single gap between two otherwise identical apartments.
• Safe room (ממ״ד, mamad, a residential protected space) — it matters more than used to be assumed, and more so in recent years.
• Orientation and light — hard to quantify, but buyers feel it within a minute.
• Condition of the property — an apartment that needs renovation will always sell for less than the renovation costs. The buyer prices in the trouble, not only the materials.
• Condition of the building — a neglected lobby or a building committee (ועד בית, vaad bayit) that does not function drags down the price of a well-kept apartment.
• Plans for the surrounding area — תמ״א (TAMA, the national outline plan for seismic retrofitting and rebuilding), פינוי־בינוי (pinui-binui, evacuate-and-rebuild) or a light rail line can change the picture entirely, in either direction.

Four mistakes that cost money

1. An opening price that is too high

The idea that you can open high and “come down if you have to” works badly. The first weeks are the window in which a property gets the most attention. If the price is wrong you miss that window — and then you cut the price in front of an audience that has already seen the property and passed it over.

2. Comparing against the wrong area figure

Registered area, built area and area including balconies are three different numbers. Comparing apartments that were measured differently produces a meaningless price per square metre.

3. Ignoring timing

A figure from two years ago, in a market that has changed, is not a figure. It matters to look at transactions from the past few months, even if there are fewer of them.

4. Tying the price to a personal need

How much you need for your next home, how much is left on the mortgage, what you paid at the time — all of these matter to your own planning, and have no effect whatsoever on what a buyer is willing to pay.

When an appraiser is worth it

A broker’s estimate and your own checking give you a range. A real estate appraiser (שמאי מקרקעין, shamai mekarkein) gives you a document. If there is a dispute between heirs, a divorce, a conflict, or a need for a figure to put to the bank, a formal appraisal (שומה, shuma) is worth paying for. For an ordinary sale, a good check of real transactions is usually enough.

The number that really matters is not what the apartment is worth, but the price at which it will sell within the time you are prepared to wait.

In summary

Start from real transactions, adjust for the characteristics of the property, and ask yourself how long you are prepared to wait. The right price is the one that generates interest in the first weeks — everything is easier from there.

The information in this guide is general and does not constitute an appraisal or advice. A valuation requires an individual examination of the property.