How do I sell my home in Panama?

Market overview

Panama is a land of stunning beaches, heavy development and an exceptionally high standard of living. Growth in Panama has been enormous in terms of both international property investment and the strength of the property market as a whole, though at the same time property values have been relatively flat for some time. 

Large-scale developments are sprouting up all over the country in some of Panamaís more prestigious regions and all are earning the attention of foreign investors. Buying restrictions are minor and cover only the islands and any areas within 10km of Panamaís borders ñ the rest of the country is fully open to foreign buyers. Taxes are high but buying costs are low, so on the whole things balance out to a genuinely appealing investment prospect. 

Average selling prices

£185,891

£731,987

£126,355

£393,300

£939,383

 

The Selling Process

Marketing your property

The normal means of marketing a property in Panama is via an estate agent whocan also value your property.If you used an agent to buy your Panama home, it could make sense to use thesame one to sell it, as they will already know the property.Before you take on their services, you should check carefully what they will andwill not do in terms of marketing and what they will charge as commission. Makesure you shop around to get the best service.

Legal Representation

Legal advice is essential when you are selling a property in Panama. Lawyers canhelp with the research that you need to do and will carry out all the validation andsecurity checks. It is a good idea to use the lawyer used for purchase as they willalready be familiar with the property and process.

Preliminary Contract

After deciding on a property, the buyer and seller both sign a preliminary contract(promesa de compra y venta) and the buyer puts down a deposit of around 10% ofthe property price.Signing the preliminary contract makes the agreement to transfer the property legallybinding and if the buyer fails to honour the contract (other than any exemptionsspecified within the contract) the deposit is forfeited.On the other hand, if the vendor fails to abide by the contract they will have to payback double the amount of the deposit/down payment.

Cooling off period

The cooling off period in Panama is usually around 10 days but this will vary fromcity to city.

Deposit

Signing the preliminary contract makes the agreement to transfer the propertylegally binding and if the buyer fails to honour the contract (other than any exemptionsspecified within the contract) the deposit is forfeited. On the other hand,if the vendor fails to abide by the contract they will have to pay back double theamount of the deposit/down payment.

Cooling off period

By law, there is a seven-day cooling-off period, during which the buyer may withdrawfrom the purchase if he/she chooses.

Sales Agreement

After the procurement of the two certificates, a lawyer prepares the sale agreement(minuta). This agreement needs to be stamped by a lawyer or notary inPanama before the agreement can be entered into the public records.

Land registry

When it is clear that all matters have been taken care of, the seller and thepurchaser can sign the deed of sale, which must then be confirmed by a NotaryPublic.This document is then passed on to the Public Registry with copies of the documentsthat prove that there is no outstanding debt on the property.They will then authorise the transfer of the property title to the buyer.This process can take around 10 days to complete provided there are no lastminute problems.After this has been completed you can take a copy of the deed of sale to theProperty Registry and the Registry of Government Property (part of the Ministryof Economy and Finance).When this is done, the sale is final.

Selling Costs Checklist

Once you have met these costs, you have paid to sell your home

Estate agent fees - if an agent is used to sell the property, they will be entitled to a commission on completion.. CGT - an advance of 3 per cent, although in some casesthis is open to negotiation. Transfer Tax - 2% as standard. However, in somecases, this is open to negotiation.

 

Photo:AJC1, Doctor Who