When you work with a real estate agent in Israel, their fee, or commission, is how they get paid for their work. Unlike in some countries where the seller pays the entire commission, in Israel it is standard practice for both the buyer and the seller to pay their own agent.

The industry standard commission for a real estate agent is 2% of the final, agreed-upon purchase price.

On top of this 2% fee, you must also pay Value Added Tax, known as VAT or Ma’am in Hebrew. The current VAT rate is 17%. So, the total cost to you will be the 2% commission plus an additional 17% of that commission amount.

For example, on a property that sells for 2,000,000 shekels:

  • The agent’s commission would be 2% of 2,000,000 = 40,000 shekels.

  • The VAT on that commission would be 17% of 40,000 = 6,800 shekels.

  • Your total payment to the agent would be 40,000 + 6,800 = 46,800 shekels.

Is this fee negotiable? Sometimes. In a very high-priced transaction, an agent might be willing to slightly reduce their percentage. Conversely, for a very low-priced property requiring a lot of work, an agent might ask for a higher percentage or a fixed fee. However, 2% + VAT is the benchmark you should expect to pay for a professional, full-service agent.

Remember what this fee covers: Your agent sources properties, arranges viewings, provides market knowledge, advises you on pricing, and, most importantly, negotiates on your behalf to get you the best possible price and terms. A good agent can save you far more than their commission costs by preventing you from overpaying or helping you secure a deal you might have otherwise lost.

Too Long; Didn’t Read

  • The standard real estate agent commission in Israel is 2% of the property’s sale price.

  • Both the buyer and the seller typically pay this commission to their respective agents.

  • You must also pay 17% VAT (Ma’am) on top of the commission fee.

  • So, the total effective cost is 2% plus VAT on that 2%.

Good advice isn’t expensive, it’s priceless. For professional service that earns its commission, DM me at Semerenko Group.

Related articles