12 TIPS on BUYING ISLAND REAL ESTATE IN PANAMA
Living on the Pacific Panama Island of Taboga, I speak from our own experience with our Bed and Breakfast Cerrito Tropical and that of our neighbors.
When buying Island Real Estate in Panama – or real estate in any Latin American Country, the buyer must be extremely careful. You can find great deals, fair deals and rip offs.
1. If you are going to look at real estate, first, find yourself a good lawyer – experienced in real estate issues – recommended by someone or an organization you trust in the country. The best are not always the most expensive. If you are English speaking make sure that your lawyer speaks English very well.
2. Use a reputable real estate agent.
3. Do not pay any money down until your lawyer has researched the property in question and written a binding contract. If you can, keep the deposit money in escrow.
4. You may be advised to have a survey done of the property and check with the municipality regarding the property of your future neighbors – if their property lines match yours or if they have any problems. There are cases of problems where surveys were not originally done correctly and where property has been sold twice to different owners at the same time. Have the lines checked.
5. Some island property cannot be titled or have problems with the titles (Caribbean and Pacific islands). Check this out.
6. Check on the legal distance from the high water mark and how that affects the property you are investigating.
7. Ask about taxes you will be liable for.
8. Calculate the 10% earnest deposit and have it available – but never in cash.
9. Don’t expect to get a mortgage; if you do apply and qualify it will not be easy in Panama.
10. Ask other foreigners-expats living in the area, what have they heard (then take it with a grain of salt – sometimes unscrupulous realtors from North America can be found in Panama as well). Word of mouth in Panama is a very powerful indicator about the market and the latest developments. Ask, listen then sift through it. By consulting various people you should uncover the truth.
11. All this research will take time, so allow for it. Don’t submit to pressure until your research is done.
12. If you are traveling to Panama with the intention to buy real estate, and deal with banks, bring all your documents with you to Panama. Recommendation letters from banks, lawyers and accountants in North America, passport and ID copies, tax returns for the last few years, plus all this documentation for your wife/spouse as well. There are some new laws in place now regarding banking for those who are not residents; check this with your lawyer.
A few tips from our Taboga Island experience which may help in your Panama adventure. Hope you find them helpful.
