Firstly it is important to know that foreigners, whether residents or non-residents, enjoy the same rights and privileges when purchasing and selling real estate as do Panamanian citizens.

Secondly buying property in Panama is so safe that major U.S. Title Insurance companies provide policies in Panama.

Thirdly it is important to understand real estate a bit so that you can go into it eyes wide open (rather than a lamb to slaughter!). For some reason when people buy abroad they often throw caution to the wind and make all sorts of mistakes they would never dream of making back home.

The following advice is a bit dry but I hope it helps!

1. Make your ‘want’ list before you start looking

a.Do you want to be in a town or in the country?

b.Do you want to be in the mountains (cooler and dryer) or warmer and close to the beach? Find out about the different areas, visit there and talk to as many people who live there as possible. Consider renting for a while before you decide what is right for you.

c.Do you want to live on a shared compex (condo) with facilities, services, security and possibly annoying neighbours and rules or do you want a private home?

d. Do you want space for a family (gardner/cook/cleaner) to live on site with you?

e.How close do you want to be to facilities like supermarkets, restaurants, cinemas, hospitals, clinics etc?

f.What do you want to be able to do there? fishing, scuba diving, bird watching, sailing (do you need a berth for your boat?)

g.What is your maximum budget? Include purchase taxes (2%), moving there, refurbishment, furnishing etc. Remember you can not get a mortgage in Panama until you have a residency permit and have built up a credit rating over time.

h.Do you want to be able to rent out your property sometimes?

i.Do you want your fantasy home or something that can be sold again easily or something that will accrue value most quickly?

j.Do you need internet connection and mobile phone connection?

k.Give this information to your real estate agent so they don’t waste your time (or theirs) showing you property that is unsuitable)

2. Don’t be in a hurry to buy real estate

a. Don’t be pressured into a quick sale by anyone, Remember there are lots and lots of properties for sale – it is a buyer’s market. b. Don’t put a deposit down in that excitable moment whan you fall in love with the property. Keep cool, wait and compare.c. Check out the place in the rainy reason and the dry. Could feel very different under two feet of water! d. Talk to neighbours and see what they have to say about the property and the area.

3. Understand the difference between titled and right of possession property.

A titled property means you own the property. Right of Possession means you own the right to occupy the property. Basically as a foreigner don’t buy ROP unless you really know what you are doing.ROP real estate can not be used as collateral, you can not get a mortgage on it and does not qualify you for a residency visa. You are also open to squatters and even to losing it completely! By the way, if you see any sign that anyone else is living on the property (even a tent) apart from the owner, steer well away.

4. Understand Real Estate Agents

Some are good and some are bad, like anywhere, but on the whole the business is pretty unregulated and with the big windfalls being made in real estate there are sharks everywhere. Buyer beware!

a. Get an honest, reliable English speaking real estate agent, preferably a referal.

b. Real estate agents rarely work together so make sure you check a lot of lisitngs to get a true picture of what is available. Check websites of different agents to understand the prices.

c. Look at La Prensa classified ads for property in Panama city and pick up a copy of Espacios magazine from a news stand.

d. Don’t pay any money directly to a real estate agent. Let the lawyer do that at the right time.

e. Know that larger commissions are paid to agents selling condos than for private houses so they will often try and push you in this direction.

f. There is no multiple listing service in Panama which means you can find the same property listed at a variety of prices on different real estate agent’s websites.

g. There is often a system in place where the seller will give his last price to the real estate agent who will then add on what ever he likes, sometimes this can be huge! – another reason for really looking around so that you can judge if the price is fair or not. Ask to speak directly to the seller if you can when it comes to discussing price if you think this may be the case.

5. Buying in a planned community & off plan

a. Check the developers finances carefully before buying something off-plan.

b. Don’t buy anything before reading the covenants, contitions and restrictions. If they say they have not been written, wait! Find out what the monthly maintenance charges will be.

c. Don’t rely on the promised ammeneties on site, like bars, restaurants, marinas, shops etc. ever being built.

d. Don’t buy something without transferable deeds eg. shares in a corporation building a condo or what ever.

e. Don’t buy off-plan with stage payments as the development gets built. You risk the developer going bust and losing your money. Pay on completion.

f. Find out what will be included in the price (usually nothing but the bare property).

g. Find out what else could be built that may obstruct your view!

6. Buying Condos for investment

It has happened everywhere and will no doubt happen in Panama. The condo bubble will burst! Be very careful whn buying a condo with the hope of flipping it for a profit on completion. All the investors buy off plan with the hope of selling it to a person who will live in it later. But what if no one wants to live in it later? What if the complex is empty of people and badly looked after and no on wants to move in. Who will you sell it to? Be warned. The location is crucial as is timing……

7. Buying real estate by the sea

Panama is the place where that dream house on the beach can become reality. There are some things you should know about it however. Ocean front land is subject to setbacks for public access which is different for the islands than for mainland property. The popular consensus is that there is a 20 metre setback from the high water line, for public access. In Panama, as in most countries, all water and beaches are public and cannot be bought or sold. Under the law, you need a “concession” to build within this setback zone.

In the Bocas Del Toro area, concessions have typicallytaken years to obtain but building permits are routinely given out while the concession is pending. (Note that most locals do not even apply for them, but you definitely should.) If you are planning to buy island property that requires a dock, or you are planning to build a house on stilts over the water, you will need to talk to your lawyer about this issue. If a concession has already been granted, that makes the property more valuable. Beware of buying any property that has structures on it that require a concession but the seller hasnot applied for one

8. Always use a lawyer (I mean always!)

a. Use a lawyer for everything to do with real estate purchasing, including the deposit, doing searches, signing contracts, setting up an escrow account, doing the transaction, paying commissions.

b. Hire a lawer that comes recommended by someone else who has bought there. Check yahoo groups for more info.

http://groups.yahoo.com/group/viviendo_en_panama/ andhttp://groups.yahoo.com/group/AmericansinPanama/. Andhttp://groups.yahoo.com/group/Panama_laws_for_expats/ has a FILEfolder with attorney recommendations and also one for attorney ads and resumes.

c. Do not use a lawyer who has any connection to the seller (or even the agent unless you know them well).

d. Get a price for handling the transaction before you work with a lawyer, including the “due diligence” that your lawyer must do to protect you against title defect and prior possession rights or squatter claims. If you need or want a Panamanian corporation to own your property, the quote should include the initial costs and yearly fees for this.

e. If you want to use the property to qualify for a residency visa discuss this with the lawyer first.

f. The lawyer will draw up a preliminary promise contract to be signed by both you and the seller. It will be in Spanish and you should have it translated. It will contain all contingencies and agreements such as date of completion, being free from squatter’s rights etc. This will be sealed by a non-refundable deposit of around 5-10%.

g. There are escrow companies and banks that act in the same way. Money should be released once deeds have been recorded in your name. Never pay the seller a cheque directly.

h. If you are buying land have it surveyed first to make sure you know exactly what you are buying! The borders may not be what you have been told.

9. Property tax exemptions

There are currently tax exemptions for new construction. If you are buying titled land and planning to build a property talk to your attorney about this. If you are buying property for a tourism business, you may be eligible to apply for a “Law 8″ exemption from all taxes. Talk to your attorney about this also, and you can, in preparation, read Law 8 in its entirety, in the file folder on business laws at:

http://groups.yahoo.com/group/panama_laws_for_expats