How to Buy a Home in Panama

Buying a home in Panama can be an exciting prospect for expats. The country offers a vibrant culture, beautiful landscapes, and a lower cost of living compared to many Western countries. However, the process of buying a home in a foreign country can be complex and requires careful planning and understanding of the local real estate market. This guide aims to provide expats with key information about buying a home in Panama, from finding properties to understanding legal requirements and potential pitfalls.

How Do I Find Houses for Sale in Panama?

There are several ways to find houses for sale in Panama. Online property portals and real estate websites are a good starting point. They provide listings from various regions of the country and cater to different budgets. Local newspapers and real estate magazines also list properties for sale. Working with a local real estate agent can be beneficial as they have in-depth knowledge of the market and can guide you through the buying process. It's also common to find properties by word-of-mouth or simply by exploring neighborhoods of interest.

Are There Restrictions on Foreigners Owning Property in Panama?

Foreigners have the same rights as Panamanian citizens when it comes to buying property in Panama. There are no restrictions on foreign ownership except in cases of properties located less than 10 kilometers from the border. However, foreigners can legally get around this restriction by setting up a Panamanian corporation to purchase the property. It's advisable to consult with a local attorney to understand the legal implications of this approach.

Does Panama Have an MLS Type System?

Panama does not have a Multiple Listing Service (MLS) like in the United States. This means that real estate agents do not share listings with each other. Each agent or agency has its own unique listings, so it's beneficial to work with multiple agents or agencies to get a comprehensive view of available properties.

Do Brokers Have Licenses and How Do I Know if They are Licensed?

Real estate brokers in Panama are required to have a license issued by the Technical Board of Real Estate of Panama (Junta Técnica de Bienes Raíces). You can verify a broker's license by asking for their license number and checking it on the board's website. It's important to work with a licensed broker to ensure that all transactions are conducted legally and ethically.

What Documents are Required When Buying a Home?

When buying a home in Panama, you will need a copy of the seller's deed (Escritura), a certificate of good standing (Paz y Salvo) from the property tax department, and a certificate from the Public Registry confirming that the property is free of liens. If you're buying through a corporation, you'll also need a certificate of good standing for the corporation. All documents should be reviewed by a lawyer before proceeding with the purchase.

Do I Need a Lawyer When Buying a Home in Panama?

Yes, it's highly recommended to hire a lawyer when buying a home in Panama. A lawyer will review all documents, ensure the property is free of liens, and guide you through the legal process of buying a property. The cost of a lawyer can vary, but it's typically around 1% of the purchase price.

Do People Typically Buy a Property with All Cash or Take Out a Mortgage?

Both options are common in Panama. Some buyers choose to pay in cash, especially if they are buying a lower-priced property. Others opt for a mortgage, which can be obtained from a Panamanian bank. Note that getting a mortgage as a foreigner can be more challenging and may require a larger down payment and extensive documentation.

Are There Inspections That Take Place, and If So What is That Process Like?

Home inspections are not as common in Panama as in some other countries, but they are highly recommended. A professional inspector can identify potential issues with the property that may not be apparent to the untrained eye. The process typically involves a thorough examination of the property's structure, systems, and overall condition.

What are Some of the Pitfalls to Avoid When Buying Property in Panama?

Some common pitfalls to avoid include not thoroughly researching the property, not verifying the seller's ownership, not checking for liens, and not understanding the terms of the contract. It's also important to be aware of potential issues with the property, such as land disputes or environmental concerns. Working with a reputable real estate agent and lawyer can help you avoid these pitfalls.

Expats Talk about Real Estate in Panama

"Rent first before you buy. Your paradise today may not be what you will think in 6 months. Brings essentials and sell everything else, you can get it cheaper here," said one expat living in Bocas del Toro.

"Come and visit several areas before making the move. We have snakes, though I haven't seen one yet. We do not have mosquitos. If you select an International Mover, avoid Move Management. They are very efficient on the US side, but they use PIR on the Panama side. PIR can't create a ACH to withdraw funds from your checking account, nor can they swipe a debit or credit card. As Manny Rojas in Miami,says, you can always pay in cash. (his relatives in Panama City run PIR) If you do not have two thousand in cash it may take you nine days to get the cash from an ATM, meanwhile, port charges, at $50 per day, keep mounting. I was withdrawing from 2 different banks in the US banks on a daily basis. BTW, every ATM here spits out $20.00 bills. You may have to fight with your US bank to make them understand that there is no Foreign Exchange issue in Panama. Mastercard charged as much as $12 foreign transaction. They have since reduced those fees to $5 or $6. Visa charges $4. If you don't have a place for your goods to be delivered, PIR charges $500 per month or any portion thereof, even one extra day will cost you $500.00. One more thing, if you send them a wire transfer, their bank charges PIR $90, which they will gleefully pass on to you. Bring buckets of cash or avoid Move Management. Your local US contact will drop you like a hot potato as soon as your goods are on the water. There is a storage place on the way to Boquete called Chiriqui Storage run by Hellmut and Linda Pederson. One good sized locker is $100/mo. A 20 ft. container would take two lockers," wrote a member in Alto Boquete.

"Travel as light as you can. Open yourself to the experience of daily life where you land. Don't choose a permanent base-of-operations until you have considered EVERYTHING that is important to you, and that you've been to other areas of Panama. It's a small country with amazing diversity. Give yourself the opportunity to experience the banquet!!!," commented one expat who made the move to Panama City.

"Definitely rent. When you find a short-term rental you really like and you demonstrate to the owner that you can be trusted they will probably let you reserve it a year in advance. That’s what we do, but we are considering the possibility of looking for a yearly lease which might cost about the same as 4-6 months short term. It would have to be a place where the owner lives nearby and can keep an eye on things. The advantage would be that you can furnish it the way you want and keep your stuff there when you are away. As far as I can see that would be cheaper and more convenient than buying," remarked one expat living in Panama.

"DO your due diligence, engage a realtor who A - speaks English, B-is responsive and pro-active, where EVER you are calling them from. KNOW what you are looking for (we made a LIST of 'must haves' and 'must NOT haves'! We found our DREAM here," mentioned one expat living in Panama.

"Use only a well known reputable realtor and have an attorney. If you hire professionals listen to their advice. We bought prior to moving here 2 1/2 years ago, and we bought sight unseen as it was an unusual opportunity. The process went smoothly, no issues. We couldn't be happier with our property and in retrospect we really got a great deal on a great property," said an expat in Panama.

"When purchasing property anywhere in Panama, it is best to use a knowledgeable real estate company and/or attorney to walk you through the process. If you work with an expat in Panama, make sure they are working here legally! Ask to see their work permit. If you work with an illegal (even if they are from your hometown!), you will have no recourse if something goes wrong. Also, understand the difference between the two types of property ownership in Panama, TITLED and R.O.P. (Right of Possession)," remarked one expat in Panama.

"Yes, foreigners are allowed to own property in Panama with few restrictions. Foreigners have the same rights as Panamanian citizens to acquire property, whether for personal use or as an investment,"

"Some years ago the government passed laws limiting "visitor" stays to maximum of 3 months. Property owners apply for and can be granted residency status which may take some time and $$$$, but is a must if the property here will be your primary home," said an expat in Panama.

"Foreigners have the same property rights as Panamanians, with one exception. Foreigners are not allowed to own property in their own name within 10 kilometers of the border of Costa Rica. Of course, there are still legal ways to have your dream beach house! ROP properties are not included in this rule, since they are not technically "owned" and Titled properties can be held in a Panamanian Corporation or Foundation that is set up properly for this. Another reason to hire a competent attorney," remarked one expat in Panama.

"I would recommend using a reputable agent! Highly recommend Lauretta Bonfiglio with Boquete Land and Realty and also affiliated with Casa Solution. Highly knowledgeable," commented one expat living in Boquete, Panama.

"There is a website used by many real estate people and individuals that put their house/condo etc. up for sale and rent. The site is https://www.encuentra24.com/panama-es/clasificados . It covers all of Panama so it is best to know where it is you are interested in buying. It took us 3 years of traveling throughout Panama to find where we wanted to settle. Good luck with your search," mentioned one expat living in Panama.

"Keller Williams Realty Panama is one of the best countrywide real estate companies in Panama and they are aactive listing on the MLS, called ACOBIR in Panama. Debbie Fishell is an active Keller Williams associate who works primarily in the Chiriqui province [email protected]. There is a good site on the up and coming area of Puerto Armuelles called visitPuertoArmuelles.com, which has a classified section with some for sale by owner properties," said an expat in Panama.

"Inside Panama Real Estate has the most versatile listings AND property management services. Many others can be easily found online. Some specialize in farm or ranch properties, some in high rise condos in Panama City," remarked one expat in Panama.