How to buy a property in Panama?

Julio 14 de 2023

How to buy a property in Panama

Panama is a popular destination for investors, retirees and second home owners that are looking to buy property in Central America. With its tropical climate, stunning beaches, and bustling city life, it’s no wonder that Panama is a favorite among real estate buyers. However, buying property in a foreign country can be a complicated process, so here are some tips on how to buy a property in Panama.

Please take into consideration that the buying and selling process in Panama is not as fast as we would like. This process can take from 2 to 3 months once the promise of sale contract is signed by the parties. So be patient because this trip will be worth it.

1- Find a Real Estate Agent

Working with a reliable real estate agent can make the process of buying a property in Panama so much easier. A good real estate agent will not only help you find the right property but also guide you through the buying process. They will have extensive knowledge of the local real estate market, the different neighborhoods  and can help you negotiate the best price for your property.

2- Know the local market

In Panama there are some real estate websites where you can find out how the market is, in terms of sale or rental prices.

You can visit the Panama MLS http:// or you can visit which is a page very similar to Zillow in the United States. You will find new condo projects, new homes and second hand properties. 

Doing this exercise will help you to know the prices and see your purchase budget and what you get for that value.

Another important point is never pay full price, always start by making a slightly lower offer. There is always a little room to negotiate.

If you don't feel very comfortable negotiating, your trusted real estate agent will help you negotiate and specify the best purchase price.

3- Title search

A title search examines public property records to confirm the rightful legal owner of the property. The title search should also reveal if there are any claims or liens on the property that could affect your purchase. A due diligence of the title can be done by a local lawyer or your real estate agent in Panamá. 

It is important to mention that a Private property in Panama is protected by the constitution of the Republic of Panama.  So you will own 100% the title of your property just as a panamanian does. 

So one of the first things to ask the seller is if the property is titled and the finca number to verify that the property is good and has a clean title. A title search will show the size of the property, the owner name, the boundaries and if there are any mortgages, liens or restrictions on it. 

Always make sure that you are talking with the owner of the property or the person who legally represents him or her. 

4- Payments: Reservation, down payment, banking procedures.

Once you have found the right property it is time to reserve it and take it out of the market. You can do that by signing a reservation agreement for 15 days, while you're making the title search. 1% of the sales price will be requested in order to make a reservation. 

In general, property sellers accept payment of minimum 10% of the total property sales price in order to sign the formal next legal document, which is a promissory purchase contract. 

When acquiring your home with a mortgage loan, Panamanian banks finance between  50%-70% percentage of the value of the property and the remaining percentage is the initial payment you have to make to the seller. In this scenario you have to present your income taxes and statement of account, as well as your personal id information in order to apply. 

Banks in Panamá do loan money to foreigners but they request a lot of documents and connections to the country. The loan approval can take 2 months to happen. 

If it seems to be very complicated, don't worry! Your local real estate agent will guide you on the process. 

5- Purchase contract

Now you are ready to sign the promise to buy and sell contract, which is the legal document where the seller agrees to sell the property to the buyer in exchange for a set price. 

At this time, a 10% down payment will be requested at the signature, minus the reservation payment that you already make. 

The real estate purchase contract must contain all the information required for its validity in The Republic of Panamá. Details that should be in the agreement. 

  • Personal data of the buyer and seller.
  • Information on the title of the property.
  • Description of the property.
  • Sale price of the property.
  • Date of closing.
  • Taxes and payments.
  • Penalties.

Once you and the seller signed the promise to buy and sell agreement, the property will be prepared in order to be transferred to the buyer. The Seller should pay 5% taxes of property transfer/capital gains to the Government and get the good standing of property.

At closing both parties will sign the final buy/sell agreement that should be registered in the Public Register of Panamá. 

6- Register

The final contract or public deed must be signed personally at a Notary. If you are not in Panamá you should leave a power of attorney to be represented. 

The buyer is responsible for the cost and expenses of the Notary and the Public Registry. 

Once the document has been signed by both parties, the notary will proceed to "close" the deed, which means that they will review the tax payments, and apply the necessary stamps and seals.

The public deed must be physically delivered to the public registry, in order to make the inscription and transfer of official ownership to the buyer. This process usually takes about 2 weeks.

7- Celebrate

When you get the big news from your lawyer or your real estate agent, it's time to receive the keys and celebrate. If you are looking to buy or rent  in Panamá, do not hesitate to contact us. 


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