Foreigners are often afraid when purchasing real estate in foreign countries. Afraid of being cheated, buying properties for more than what they are really worth, paying excess fees, and getting scammed by people pretending to be the owners who aren’t.
Here are some useful tips for reducing the risks of buying real estate in Panama.
Sometimes the best prices can be obtained by using a local middleman. Many Panamanians still believe foreigners will pay more than the local price. Panamanian sellers getting contacted by buyers speaking a foreign language usually raise the asking price. Find a trustworthy local who can do all of the looking and talking to negotiate a better price.
Some Panama real estate agents mark up the selling price to include their commission. The better way to counter this is to offer 75% of the marked up price and ask for a counter offer. Typical real estate commissions are 5% in the cities and up to 10% for farmland and rural properties.
Research the person or business on the internet by typing in “scam” after the name in Google. Then do a search without the “scam” to learn more about the person or business. Compare at least two real estate companies and agents before deciding which one to work with. Hire a local to act as a translator in order to meet with sellers and inspect properties.
Investing in Developments outside the cities can also be challenging. Many developers owning stunning land make lots of promises regarding the infrastructure and when it will be finished. They have a beautiful looking computerized master plan with lots of amenities. Many foreign developers have never developed in Panama and could have misjudged the time and actual costs to develop here. This results in many foreign developers going bankrupt or encountering legal or political problems.
Find a Panamanian developer with an established track record for completing projects for fewer risks as they are familiar with local politics and the way things get done here.
The biggest risk is when a development is in its early stages. Try to reduce the amount of deposit until the infrastructures are completed. Try to get the developer to agree to set up an account with an escrow company to hold the deposit until certain stages of construction are completed.
Finally, hire a competent Panama real estate law firm which speaks English to obtain reliable advice regarding the laws.