"No More Information Needed, Just an Answer": AI Tools for Buying an Apartment

Recently, more and more tools based on artificial intelligence are seeking to change the process of buying or selling an apartment. The new platforms allow users to assess whether an apartment is priced correctly, analyze financing capacity, examine the feasibility of a deal, and assist in decision-making throughout the entire life cycle of a property, from purchase to sale or investment.

A Matching Engine

One of the new platforms that has recently come into use is PROPLY, whose starting point is simple: before examining which apartment to buy, one must examine whether the deal fits the buyer's economic capacity. The system is free, anonymous, and based on artificial intelligence. It is capable of analyzing user data and returning a "GO" or "NO GO" answer regarding the purchase, sale, or investment in a property, taking out a mortgage, and refinancing. Alongside this, the user receives an explanation about the risk level, financing capacity, and the boundaries within which the deal may be reasonable.

"Buying an apartment is one of the most significant economic decisions for households, but in most cases, the process starts with the property and not with the capacity. Buyers are exposed to an ad, are impressed by the apartment, perform an initial calculation, and only later check the equity, the possible mortgage amount, the monthly payment, and the impact of interest rate changes," explains Ron Novotny, founder of PROPLY. He is also the CEO of the Anglo Saxon Israel network, but he developed the system separately from the network.

The system produces a summary report, including an analysis of the deal structure: the property price, the required equity, and the loan-to-value (LTV) ratio in relation to Bank of Israel restrictions; an estimate of the expected monthly payment over the life of the mortgage and its comparison to the recommended payment; an examination of the payment-to-income (PTI) ratio; as well as a simulation that examines how interest rate changes might affect the monthly payment amount.

Novotny explains that "most people don't need more information, they need an answer. They need to understand if the deal they are considering is suitable for them, what the meaning of the financing is, and whether the risk is reasonable." He notes that the choice to offer the system for free is part of his concept: "We wanted to allow every person to check themselves without pressure and without commercial interests. Even if later they choose to use a broker or a bank, they will arrive at the process while understanding their situation and the deal's boundaries better."

The Tool That Reflects True Value

Another tool developed recently is Price Vs. Value, created by appraiser Haim Atkin. It is intended to help apartment buyers, investors, and professionals examine whether the price the buyer is about to pay for an apartment is supported by economic value, or whether it relies mainly on credit, leverage, and the expectation of further increases.

The tool is based on the thesis developed by Atkin in his book "Real Estate Bubble," which argues that a transaction price is not necessarily an economic value, and the fact that a nearby apartment was sold at a certain price does not prove that the price is reasonable or supported by income, rent, and cash flow. Atkin explains that the starting point for the tool was a critique of current valuation methods that rely heavily on the Tax Authority's database, which he claims does not necessarily reflect the economic value of the property due to various financing campaigns.

For the purpose of the check, the user enters data about the property, equity, financing terms, income, and expected rent. Based on these data, the system analyzes a series of economic indicators, including the maximum price that can be reasonably financed and the economic value derived from the rent flow. The use of the tool is paid: a focused analysis costs 18 NIS, while a broader analysis costs 49 NIS.