There is one thing that should not be done: selling an apartment just to plug the hole, without taking care of the person who dug it. If the decision is made to sell, it should be done as part of an economic recovery plan. • Real estate consultant Yaakov Reinitz explains how to conduct business properly
There are meetings where I sit across from a couple who want to sell their apartment, not because the family is growing and they need four rooms instead of three; not because they want to move to a better neighborhood; and not because they received an offer they can't refuse.
They want to sell because they simply can't breathe financially anymore.
The debts have piled up. The monthly repayments are stifling. Each month begins with a new deficit, continues with another loan, and ends with the hope that somehow, next month, it will be a little better.
Then comes the solution that seems the most logical in the world: selling the apartment.
In quite a few of the cases I encounter, when you start to break down the numbers, an interesting picture emerges. The debts that burden the family each month were not created because of the apartment itself. They are not a direct result of the mortgage, but of financial conduct that has become increasingly complicated.
Sometimes, it's true, the starting point was buying the apartment. The mortgage was high, income didn't grow as expected, an unexpected expense came, and then a loan was taken out. And another. And then instant credit.
And so, without anyone planning it in advance, the family enters a path where they pay very large sums every month, just to stay in place.
•
Then the apartment becomes a solution: You sell it. You pay off the mortgage. You repay the loans. You erase the debts. Suddenly, 10, 15, or even more thousand shekels in monthly payments are lifted off your shoulders. For the first time in a long time, you can breathe a sigh of relief.
But this is exactly the moment when you need to stop. Because if the problem was the apartment, great. You sold the apartment and the problem was solved. But if the problem was financial management, selling the apartment didn't solve it. It just gave a break.
The debts have been erased, but the habits remain. The gap between income and expenses remains. The lack of control over the budget remains. And sometimes the mistaken feeling that "we'll manage somehow" also remains.
Then, within a year or two, and sometimes much sooner, the family may find itself in exactly the same place. Only this time there is no apartment to sell.
This is the point I try to make in meetings like this: Not every family in debt should sell their apartment, and not every family in debt should hold on to it at all costs. There is no magic formula here.
There are families where selling the apartment is truly the right move. It can stop deterioration, erase expensive obligations, and create an opportunity for the family to start over. There are cases where it is actually right to wait, explore other options, and build a plan that will allow the family to stay in the apartment.
Each case must be examined on its own merits.
•
But there is one thing you should not do: sell an apartment just to plug the hole, without taking care of the person who dug it. If the decision is made to sell, it should be done as part of a financial recovery plan. Don't sell on Sunday, pay off debts on Monday, and start thinking about what to do with the remaining money on Tuesday.
You need organized financial support, which looks the family in the eye and accompanies them month after month: how much comes in, how much goes out, what debts are being paid off, what the new budget is, what is allowed to be bought and what is not, and most importantly, how to make sure that the family doesn't return to the exact same pit.
Because an apartment is an asset. But sometimes, without noticing, it also becomes the last lifeline of a family that is in financial trouble. And if you sell the lifeline without learning to swim, the next time the water rises, there will be nothing left to save.
Therefore, before selling the apartment to save the family, it is worth stopping and asking: Are we selling the apartment because it is the problem, or because it is the last thing that can cover it?
• Yaakov Reinitz is a real estate consultant and lecturer. To schedule a consultation - Click here
