Did you know there’s a real estate hack right under your nose in Israel that could save you thousands of shekels? It’s completely legal, widely practiced among real estate agents, yet surprisingly, most home buyers don’t even know it exists. Curious yet? Let’s dive in!
What Are Real Estate Commissions Anyway?
First things first—what exactly is a commission? Imagine you want to buy a home in Tel Aviv. Typically, a real estate agent helps you find the property, negotiates prices, and assists you with the paperwork. For this service, the agent earns a commission, which in Israel usually ranges around 2% of the property price.
That means if you’re buying an apartment for 2,000,000 shekels, your agent earns around 40,000 shekels. That’s quite a chunk, right?
But here’s the surprising part: agents regularly share these commissions with each other. Yes, you heard that right—real estate agents split their commissions all the time!
The Hidden World of Referral Fees
Here’s how it usually works:
Let’s say you’re moving from Haifa to Jerusalem. Your agent in Haifa can refer you to another agent in Jerusalem to help you find your dream home. When your Jerusalem agent successfully helps you buy a property, they’ll often pay a referral fee back to your Haifa agent, usually around 20-30% of their own commission.
Here’s a quick breakdown:
- Jerusalem agent earns a 40,000 shekel commission.
- Haifa agent gets roughly 10,000 shekels (25%) as a referral bonus.
- Jerusalem agent keeps 30,000 shekels.
It’s a win-win for agents, but guess who’s left out of this sweet deal? You, the home buyer!
But there’s a smarter way to play this game.
How YOU Can Benefit (and Save Big!)
What if you could receive that referral bonus instead of it going to another agent? Sounds good, doesn’t it? Here’s how:
If you’re planning to buy property, and you know a licensed real estate agent personally—maybe a friend, relative, or even just an acquaintance—you can ask them to officially refer you to another agent in the city you’re moving to.
Let’s say you’re leaving Netanya and looking to buy in Herzliya. Your friend, who holds a valid real estate license but might not even actively work in real estate, refers you to a great agent in Herzliya. When the Herzliya agent closes the deal, your friend gets that referral fee, say around 25% of the commission. Your friend could then pass that savings directly back to you.
Instead of paying 40,000 shekels in commission, you effectively cut your expense down to around 30,000 shekels, saving yourself 10,000 shekels effortlessly.
How to Easily Take Advantage of This Hack
Here’s your step-by-step guide to benefiting from real estate referral commissions in Israel:
- Find a licensed real estate agent you trust—ideally someone close to you who doesn’t mind doing you a favor.
- Ask them to officially refer you to a reliable agent in the city you want to buy property in.
- Make sure to clearly agree that the referral fee (around 20-30%) will come back to you once the deal closes.
- Buy your property as you normally would—the rest is business as usual.
Quick Tips to Remember:
- Always make sure the referral arrangement is clearly documented to avoid misunderstandings later.
- Check that the agent referring you holds a valid real estate license in Israel.
- Negotiate the referral percentage in advance (20-30% is standard).
Too Long; Didn’t Read (TL;DR):
- Real estate agents in Israel commonly split commissions through referral fees (20-30%).
- You can use a licensed friend or acquaintance to refer you, earning the referral money yourself.
- It can easily save you thousands of shekels on your real estate transaction.
- Always document clearly and agree on the referral fee in advance.
Next time you’re buying a property in Israel, give this hack a shot—your wallet will thank you!
