You can buy real estate in Panama directly to the owner or through a broker. With the real estate boom you have a while range of real estate companies selling all kind of lands, houses, condominiums. Check out also us real estate classifieds.

Steps for buying Real Estate in Panama

Before handing over any money, make sure you consult with a professional and do a proper due diligence investigation over the property to ensure you aren't buying a big problem! It is important to understand the rules and process your property transaction correctly. The process of purchasing a house or department is one of the most important steps that a person gives in the consolidation of their patrimony. Generally during this process the whole family interferes when deciding the perfect zone to lived, the characteristics it should have, the style and distribution of the house, etc. The acquisition of a house or department requires several steps and documents which can be complex and become a burden, nevertheless it does not have to be like that. Here are a series of Tip's which will help you to make the best purchase.

Property Location:

When selecting a zone from a city to acquire a house or department, you must take into consideration that you and your family will coexist during every day in this place. That’s why is very important that this zone covers our basic needs and allows us to improve or to support our life style. To achieve this, you must take into consideration the following points to select the zones that will adapt better to your life style:

- That possess all the Public Services (Water, illumination Public System, drains system and Paving streets).
- That is located in zones of high risk.
- That possesses basic commercial services (shops, drugstores, hospitals, churches, gas stations, parks, etc).
- That possesses central road arteries offering transportation Options.
- You must take into consideration the distance and traffic from this zone, to your Job.
- You must feel identify with the social level of the neighbours.
- That offers acceptable levels of safety.
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Property Characteristics

Finally the house or department you acquire will become a part of your Capital, that’s why at the moment of acquiring it is basic to check its conditions and what type of value the property will be able to offer in the future, To achieve this make sure the property has the following characteristics:

- The building should not be older than 30 years.
- That it possess at least 2 bedrooms.
- That it possess at least 1 complete bathroom.
- That it possess at least 1 parking place.
- Preferably to have 55 or more square meters of construction. ·
- Good conditions of the Hydraulic installation and Gas (baths, pipelines, wash-basins, etc). ·
- Good conditions of the electrical installation (Dampers, electrical fuses, plugs, etc).
- That it possess waterproof roofs.
- Aspect and deterioration of floors, walls, roofs.

When evaluating a property is very important that you check the legal condition of the property at the exact moment when buying the House, with this you will avoid having unpleasant surprises
And you will be able to enjoy the tranquillity of everything being in Order. The houses or departments will need to have the following:

- Licensee for the use of the Land to Inhabit.
- You most make all previous payments to obtain water and light services.
- That the Land does not come from the CORET. Program.
- Occupation Authorization issued by the corresponding authorities of each region, municipality and delegation.
- The Property must not come from a testamentary succession. ·
- The property must not be a Real estate in co-property, except previous constitution of the condominium property regime, or the dissolution - of the co-property.
- The building must not be acquired through Positive Judicial Prescription.

Types of Mortgages

- Fixed rate Mortgage: The interest rate is establish in the contract and does not change during the whole time life of the mortgage.
- Variable Rate Mortgage: The interest rate will vary according to the market conditions.
- Mixed Rate Mortgage: it has a period of 2 or more years where the interest rate remains Fixed and a period of time where the interest varies.
- Fixed Monthly Payment Mortgage: It’s a variable rate loan where the same monthly payment is made.

When you are being evaluated by a Financial Institute to receive credit the first thing you must analyze is how much money you can pay monthly for a mortgage loan. This must be done starting from the principle that you have a monthly income coming from an economical activity, investment, or any other income, which are utilize to pay variable expenses, such as clothing, food, services, fun, taxes, credit cards and Personal loans, that’s way the monthly payment capacity must be calculate as follow:

- Identifying the total amount of the gross monthly income.
- Adding the average monthly balance of your investments.
- Multiplying It by 35 % (this percentage can change)
- Subtracting the monthly amount of the payment for loans (personals, cars, etc).
- Subtracting 10 % of the average monthly balance of your Credit Card.
- Based on the monthly payment capacity it will be determined, the amount of line of credit you will be able to obtain, depending on the term and rate.

Each time the Financial Institution evaluates your payment capacity, they make an investigation, to validate your personal Information, as well as your credit History. This allows them to know your financial solvency in order to determine the maximum amount of your Mortgage Line of Credit.
If you are approved your account Representative will give you a document assuring the Line of Credit. With which you will be able to make the necessary transactions with the seller of the Property.

Formalizing the Buy - Sale

When you have already identified the house or department that you want to acquire, you only will have to turn in the necessary documentation and make the payments for the regulation expenses. The Account Representative will contact you to inform you about the advances of the formalization process, as well as to schedule different appointments with the Valuer and notary.

When the Valuer submits his Judgment, the notary will verify again the situation of the Building Property in the Public Registry to confirm that no change has taken place during the first verification to the signature of the Property Documents.
Once accepted, we check the terms and conditions under which it will be made the Operation, the following step is the formalization of the mortgage with a notary, which is usually done at the same time when formalizing the purchase of the Property. Most of the financial entities issue in the same act the amount of the loan, in order to pay the seller. When signing before a notary it is obligatory by law that the buyers credit the contracting of a life insurance Company for the total amount of the line of Credit, and an assurance for damages for the total value of the property. The formalization of the deal and mortgage involves expenses and taxes which must be paid by the buyer. The day of the signature, the buyer must pay an approximate amount.

Required documentation

If credit request is approved you will have to turn in to the Bank the necessary documentation TO FORMALIZE your mortgage loan, in case you are buying a new Project, this documentation will have to be provided by the building or real-estate firm. Following a list of documents you might have to provide:

- Copy of the Property Lines
- Last Voucher for taxes and water system down payment.
- Property Title stamped by the Public Registry.
- Letter of Instruction of Mortgage Cancellation of the Institution with which it is aggrieved.
- Birth and Marriage certificate of the Buyer ·
- Birth and Marriage certificate of the Seller ·
- In case that the Seller is a Company, will have to request him: ·
- Copy of constitutive act and power of attorneys.
- Legal Representative Personal identification.

Formalization Expenses:

The initial expenses you will have to expect during the Mortgage Formalization process are as Follow:

- Investigation Expenses.
- Evaluation Cost.
- Notary Public Fees.
- Commission for Opening Line of Credit.

Contracts signed are legally binding documents, and you should ensure that you have read and understood them completely before signing.

All judicial processes in Panama are conducted in Spanish. For any real estate transaction in Panama, a contract written solely in English carries no legal weight, and is generally not recognized. All contracts for property must be in Spanish on a formal public deed, and signed before a public notary, in order to be legally enforceable and where applicable, be filed at the Public Registry.

GET PROFESSIONAL HELP

Buying real estate in a foreign country should not be guesswork. As when purchasing real estate in the U.S., common sense should be the guiding factor. Again, engaging a reputable attorney and licensed real estate broker is recommended. While a good real estate agent can help you through the steps of buying, he cannot provide you with legal advice; an attorney does that. Even some Panama City-based real estate lawyers might not be fully familiar with such intricacies as land law in certain areas, e.g., Bocas del Toro.

Panama’s Bar Association and Supreme Court advise that the Supreme Court issue a "Certificate of Good Standing" to lawyers. The Court receives complaints about lawyers and decides whether to sanction them.

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