The Value of the Apartment for Collateral Purposes

Since our book is intended for practical purposes, we will focus on the subject of value Residential apartments for collateral purposes. Mortgage banks, which lend money to most homebuyers, will agree to give a loan backed by a mortgage only if the apartment meets a number of characteristics.

The value of the apartment for a collateral purpose will be conservatively defined. For example, when it comes to uncertain characteristics, such as building rights, these will be defined as “value for collateral purposes”; “the value obtained by a conservative method of analysis after deducting from the market value all components of speculative nature, physical and planning value (a value component resulting from the existence of an approval of a particular improvement plan which is in the planning or deposit stages), and based on existing property rights, cannot be used as collateral, as well as deducting the value of the parts in the property that the appraiser did not visit.”

Also, the appraiser will not include value resulting from illegal construction. Finally, the appraiser will deduct from the assessment amounts that will be required for the sale of the property in a quick and forced procedure, as well as all tax payments without taking into account the various exemptions.

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Apartments in Israel
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Average price for a 4 room apartment in Tel Aviv
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Rise in the price index of input in residential construction from the year 1956 to 2021
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