News about Purchasing Groups

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Purchasing Groups

Purchasing Groups – Big Savings Because You Are Part of a Group

Who hasn’t heard of purchasing groups? Nowadays Real-estate purchasing groups are widely advertised in Israeli media, and the concept is very well known. Group purchasing is a cost effective measure in many fields, and can extend to real estate as well, where the group purchasing power can provide for significant discounts.

Purchasing groups are an association of private persons who jointly purchase a plot and build on it – eliminating the contractors’ profits and other middlemen’s fees in order to cut costs, and build houses that cost less than the market price.

Our experience is your gain

We have extensive experience in this form of real-estate enterprises – and it is all for your benefit. We have many years of experience in managing purchasing groups from the initial stage of organizing the group through purchasing the property to the building and the occupancy stages. We offer our clients our professional abilities in the following issues

☑ Locating suitable properties for a group project at great prices in appealing locations. ☑ Good working relations with municipal and other government authorities so that we can receive the required permits swiftly. ☑ Constant contact and coordination with the group members. We are always accessible to our clients, while explaining every detail of the construction process and keeping them involved every step of the way. This provides for more satisfactory results that meet the group members’ desires and wishes. This also proves for more efficient results, and allows us to complete projects in record time. ☑ Our cumulative experience in property improvement can help you raise the value of your plot. Press here to read more about property improvement. ☑ Lowering costs of this procedure by smart tax planning, which provides for minimum tax payments and minimum fees to the government from the members of the group. ☑ Assistance throughout the process by our architects, engineers and building inspectors. This eliminates various risks and provides for quality construction. ☑ Our experience allows the group members to save costs and receive better results when compared with “conventional” building.

What are the advantages of purchasing groups?

  • The rights in the property purchased by the group are registered in your name at the initial phase – not after the construction is completed as is common in “standard” apartment purchases. This grants the members of the group a financial safety net and additional assurances.
  • Purchasing groups can use their joint members’ power as leverage for receiving discounts from various suppliers, including from banks, who provide loans to the group members in order to compete the building(s). This also provides for reduced costs for the building procedures.
  • Another advantage for purchasing groups is the ability to choose your own neighbors. In a purchasing group you know in advance who your neighbors are and you can add friends or choose people with a similar background to join you in the group.
  • During the project construction, payments to the various construction and service providers are made only after a certain building stage is completed, subject to the approval by the banks, and our inspectors. This is superior to the situation in “standard” building projects, where the buyer has to pay the full price to the contractor at predetermined intervals not based on performance. This ensures that any sum that is paid by the group members has already received adequate return. It also allows for easy revision of plans at little cost.
  • You can save tens of thousands of shekels by joining a purchase group:
  1. By eliminating the contactor’s profits, which are usually 20% of the purchase value of an apartment at a “standard” purchase, since the purchase group is not for profit (just for buying an apartment at costs).
  2. By eliminating the marketing expenses, since the group is organized and does not need to market the apartments it builds.
  3. By significantly lowering the costs of architectural or planning changes. Purchasing groups are much more flexible when compared to “standard” purchases and changes can be done with comparative ease.

What are the stages of organizing and managing a real estate purchasing group?

  • Locating the Property: Finding a parcel suitable for the anticipated project, conducting extensive inspections on the property conditions and thereafter conducting negotiations with the selected property’s owner for the property’s purchase terms.
  • Marketing and sales: selling the projected apartments, that will be built on the purchased property, to the group members. The sale price is determined by experienced assessors. At the same time we work to have the building plans approved by the municipality. Once we have the approval – the group members sign a joint tenancy agreement
  • Purchasing the property: The group members jointly purchase the property from the land owner. The members of the purchasing group are then registered at the land registration offices as joint owners of the newly purchased property. At this stage the group members select a committee that will represent them through the construction process.
  • The next phase is the detailed planning of the project and receiving a building permit from the authorities.
  • At the same time the group contacts a bank and a contractor that will provide funding (the bank) and build the project (the contractor). The contractor and the bank will sign an agreement that fully guarantees the contractor’s obligations and the return for the group members’ payments.
  • The construction stage is preformed in accordance with the pre-approved plans by the group that were drawn up by the architects and the other planners and received the building permit. As indicated above, the contractor is paid upon the completion of each building phase after the bank and our building inspectors approve of the results.

Completing this procedure requires a lot of time, money and experience. In order to ensure an efficient building process, there is a need for an experienced manger to oversee the process. We have the necessary experience and we are looking forward to sharing it with you. You are more than welcome to contact us. Our phone number is 03-6961010, and we will be happy to explain how we can assist you in finding a