When you bought through the Israeli market, the local market does not automatically become your market on the day you want to get out.
Noam and Shira called me after eight months on the shelf.
Not in panic. In exhaustion. Shira did the talking, Noam was in the background on speaker, and I could hear him breathing.
“Ilan, the apartment has been on the market for eight months. We've dropped the price twice. No calls. None at all. Three offers in the whole period. All insanely low. The agent says that's the market.”
They are a couple in their late thirties. Both salaried employees, both well organized, the kind who make a spreadsheet before buying a car. The money they invested was nine years of savings, not spare change. It was their first investment outside Israel, and they approached it exactly as you would expect from such a couple. They read, they asked, they didn't rush.
They had gone to a launch event run by an Israeli company. An old building that had been renovated and converted into student residences. The idea was clear and logical, the kind you can explain in two minutes without losing anyone. A university nearby, constant demand, rent signed a year ahead, a management company handling everything. They wouldn't have to do a thing.
They bought. For three years everything worked more or less as promised. The rent arrived. There were expenses they hadn't expected, but nothing out of the ordinary.
Then they decided to buy an apartment in Israel, and that money was supposed to be the down payment.
That is the detail that makes this story painful. They weren't just waiting. They waited while prices in Israel moved, while apartments they had looked at were sold to others, and while they began arguing at home over whether such an investment should have been made at all.
I asked them one question in the first call. How much did you pay, and what does a similar apartment in the building across the street cost?
Silence.
“We don't know,” Shira said. “Does it matter?”
We ran the check. It took a week. The gap was significant, and it was not accidental.
They had bought at a price set in a sales channel aimed at Israelis, with everything that comes with it. The marketing costs, the commissions, the event, the explanations, the service, the hand-holding. It is a completely legitimate price and nobody cheated them. It is simply not the price a local buyer pays for an apartment on the same street.
When I presented them with the numbers at the meeting, Noam stared at the page for a long time.
“So we overpaid.”
“Not necessarily,” I said. “You paid the price of a different product. You bought an apartment with guidance, with an explanation in Hebrew, with someone who answers the phone. That was worth something, and maybe at the time it was worth it to you. The problem is that on the day you sell, you can't sell that. You can only sell the apartment.”
And that is exactly what shut the door on them.
A local buyer who saw the listing did a simple calculation and moved on. A local investor computed the yield at the asking price, got a number that didn't work for him, and never picked up the phone. The apartment was perfectly fine. The tenants were perfectly fine. The price simply didn't speak to anyone who was actually there.
One type of buyer remained. Someone who comes from the same place they came from, and who is willing to pay the same price for the same reasons.
And here is the thing they didn't know, and almost nobody knows. The channel that brought them in did not exist for them on the way out.
Marketing companies live off new inventory. They receive a commission from the developer and sell a project that has a presentation, a story and a delivery date. A second-hand apartment belonging to a private couple is not a product they sell. They have no interest and no mechanism. That isn't malice, it's a business model.
So there was a possible buyer, somewhere in Israel, and there was no organized way to reach him.
We sat down with three options.
The first, to lower the price until a local buyer steps in. We did the math on paper. The number required for the yield to work for a local investor was too low. Noam said, “That's not a loss, it's a punishment.”
The second, to stop trying to sell, keep the apartment rented, and wait. That is a real option and a better one than it sounds. The property produces income. Time works in your favor.
The third, to stop looking for a buyer in a market where he isn't, and start looking where he is. That is, in Israel.
It sounds simple. It isn't. There is no platform for it, no broker, no mechanism. There are groups, there are acquaintances, there are people who already bought in such projects and know others. It is manual, slow work, and a little humbling, because you are selling an apartment you own through people you know.
They chose the third.
It took a few more months. The buyer came through an acquaintance of an acquaintance, an Israeli, exactly the profile that had bought with them at the launch. He asked the questions they themselves hadn't asked three years earlier, and to their credit, they answered him honestly.
They sold at a third price. Not the first and not the second. A price they accepted because they no longer wanted to wait another eight months.
I think about this story a lot, because there is no villain in it. The company didn't cheat them. The apartment exists. The tenants paid. Everything promised at the entry was delivered in full.
Nobody simply talked to them about the exit. And in most of the projects I see, nobody talks about the exit, because at the stage when people are talking, none of those talking has any interest in it.
Noam said something to me at our last meeting.
“We thought we bought an apartment in a market. We bought an apartment in a channel.”
That's exactly it. And a channel is something that runs in one direction.
The question I would ask in your place
- What does a local buyer pay today for a similar apartment on the same street, and who checked that for me?
- On the day I want to sell, who is my buyer, and how exactly will he find me?
- Will whoever is selling to me now still be there when I sell, and if not, who will?
Stories are based on real situations, with identifying details changed. Not legal advice.
Translated from the Hebrew original. עברית