Israeli real estate developer Av-Gad Holdings has launched what it says is the first “trade-in” program for new apartments in Israel, allowing buyers to hand over their existing home as part of the deal when purchasing a new unit.
Under the new model, customers who buy a new apartment in one of Av-Gad’s 14 urban renewal projects will be able to sell their current home to the company using a pre-agreed mechanism, instead of having to find a buyer on the open market while juggling a move.
Av-Gad CEO Adv. Re'em Ratzon said the initiative was designed to remove one of the biggest barriers for families seeking to upgrade their housing in a sluggish secondhand market.
“We are launching a long-term move that we have been working on behind the scenes for several months, with the aim of changing the way new apartments are bought in Israel, similar to the move that changed the car market about 30 years ago,” Ratzon said.
“We believe this will bring a significant change to the way new apartments are purchased in Israel, give buyers security, certainty, and simplicity, and remove the biggest obstacle in the process. This is real news for the market and for families in Israel that will change how people buy homes and make it easier for them to upgrade their living environment,” he added.
Survey: Selling the existing home is a key obstacle
As part of the launch, Av-Gad commissioned a survey from the New Wave Research Institute among 200 homeowners who are considering buying a new apartment from a contractor.
Nearly half, 49%, cited selling their current home as one of the main challenges in purchasing a new apartment, alongside raising equity and covering ancillary costs.
Forty percent of respondents said they planned to sell their apartment in parallel with buying a new one, a pattern the company says underscores the need for an organized trade-in track. Seventy-one percent said they would consider buying a new home through a trade-in mechanism if it were offered.
Among the advantages they highlighted were a guaranteed sale of the existing apartment, significant time and effort savings, greater certainty in the transition between homes, and avoiding direct dealings with agents and brokers.
How the trade-in model works
The trade-in option will be available to buyers who sign a purchase request for a new apartment in one of Av-Gad’s projects. The value of the traded-in apartment can be up to 70% of the price of the new home.
Buyers opting into the track will receive a list of up to 10 bank-approved appraisers. An independent appraisal of the old apartment will be carried out and provided to the company, and the trade-in price will be based on that valuation, with a 6% deduction. The trade-in price will be agreed before the purchase contract for the new apartment is signed.
Once the new apartment is purchased, Av-Gad will manage the secondhand property as part of its inventory. A licensed marketer appointed by the company will work to sell it quickly on the open market, with Av-Gad covering the marketing costs as a benefit to the customer.
If the apartment is sold for more than the appraised price, the full consideration, including any upside above the valuation, will go to the original homeowner, the company said. If the apartment is not sold by the time the new unit is delivered, Av-Gad may approve an additional discount on the old apartment’s price and commits to compensate the customer for the extra reduction.
Alternatively, the customer can ask Av-Gad to purchase the apartment directly at the appraised price minus 6%, at the company’s discretion.
Urban renewal focus
Av-Gad, founded in 2009 by reserve Col. Michael Ratzon, who serves as chairman, together with CEO Re'em Ratzon, specializes in residential construction and self-execution in the urban renewal sector.
The company is currently marketing around 700 new apartments in 14 projects in 11 cities, including the Bavli neighborhood in Tel Aviv, Ramat Hasharon, Herzliya, Bat Yam, Holon, Ramle, Ra’anana, Hod Hasharon, Kfar Saba, Petah Tikva and Rishon Lezion.
Since its establishment, Av-Gad says it has completed and delivered about 701 housing units in 21 projects across Israel, and today holds a land and project pipeline totaling roughly 26,760 units at various stages, including hundreds already under construction.
The new trade-in program will be promoted in a nationwide campaign across television, radio, outdoor, digital and social media, the company said.