Useful Articles & Info

1) Why Panama?
2) What are the procedures to purchase Panama real estate?
3) Can foreigners own Titled real estate?
4) What are Panama real estate taxes?
5) Are there any closing costs?
6) What Are common real estate costs?
7) What are construction costs?
8) Can foreigners acquire mortgages?
9) How do we get to Panama?
10) What sectors of Panama are foreigners relocating to?
11) What are the conversions from meters & hectares to feet & acres?

REAL ESTATE TERMS & DEFINITIONS:

What is an MLS?

A Multiple Listing Service, or MLS, is a marketing database set up by a group of cooperating real estate brokers. It's purpose is to provide accurate and structured data about properties for sale. It also is a mechanism for listing brokers with Exclusive Listings to offer compensation to buyer brokers who bring a buyer for their listed property.

Each MLS has its own rules and procedures. If the membership are all REALTORS®, then the rules are patterned on regulations published by the National Association of Realtors®. By using rigid data criteria and providing rules for the offer of compensation to other brokers, the MLS has been the primary vehicle for the vast majority of real estate transactions over the years.

What Types of Listing Contracts (Agreements) are Available to Sellers?

There are three primary forms of listing agreements that vary in popularity, terms, responsibilities and services rendered:

(1) The Exclusive Listing, also known as an “Exclusive Right to Sell” listing.  Under this type of agreement, the listing agency is paid a commission when the sale closes no matter who produces the buyer.  The listing agent could have made the sale.  You may have found a buyer yourself.  Or another agent could have brought you a buyer, in which case he/she will split the commission with the listing agency.  Regardless of who made the sale, you owe a commission to the listing agency.  As you might expect, real estate professionals prefer this type of agreement.  After all, they are investing time, energy, and money into marketing, advertising and showing your home; and they have a reasonable expectation of earning pay for their efforts.  This agreement guarantees them their commission.
 
(2) The Exclusive Agency agreement also gives the listing agency the right to market and sell your home. And it ensures them that they will receive their commission if another agent or company makes the sale.  The difference between it and the exclusive listing previously mentioned is that you retain the right to sell your property without paying a commission if the buyer did come through the listing agency.  This means that you can seek out buyers on your own.  It also means that there is less incentive for the listing agent to actively market your home.  Think about it this way: Under this type of agreement you are essentially competing with your agent.  This makes it a much less popular option for real estate agencies.

(3) In an Open Listing you are basically saying that you are willing to work with real estate agents if they bring you a buyer, and you will pay a commission if their client buys your home.  But you retain the right to sell your home yourself without paying a commission to anyone.  No one agency has an exclusive right to sell your property.  You can have as many open listings as you desire, and only the agency that produces a buyer receives a commission.  This holds even less incentive for any agent to actively market your property.  What will most likely happen is that they may be willing to show your home to a client looking for a property like yours.

Why Panama?
· US Dollar as Official Currency (Safe Investment) – No worry of Currency Devaluations.
· The Panama Canal & its 8 Billion Dollar expansion project.
· Best Retirement Program in the World.
· Real Estate Tax Breaks on Homes and Condos.
· State of the Art Health Care System – Par with US & European facilities – New John Hopkins Affiliated Hospital.
· Low Cost of Living and More “Bang for Your Buck”. Real Estate is fraction of Major US Cities & a Live-in maid is $200 a month.
· Great Weather All Year Round. 75 - 85 Degrees on Low Altitudes and 60 - 70 Degrees on its Highlands.
· No Major Natural Disasters or Hurricanes.
· Panama has the highest per capita US investment in all of Latin America.
· Low Inflation History; best in Latin America.
· Location – Heart of the Americas. Access from (7) Major US Cities & only 2 ¾ Hours from Miami.
· Full Title on Properties – No restrictions on foreign ownership, foreign investors are treated as locals.
· Banking & Financial Center – Panama is an International Banking Haven, Low Mortgage Rates are Plentiful & Movement of Funds has no Restrictions.
· Democracy & the government is stable with an optimistic business climate.
· Tourism Investment Benefits which include no income or capital gains taxes.
· Panama has 500 rivers and 1600 islands.
· Great Biodiversity and Rainforest, with over 900 species of birds.
· Many Options – City, Beach, Island, Historical & Highlands communities to choose from.
· Great Infrastructure & Activities – US type Malls, Highways, Big Game Fishing, Diving, Eco-tourism, Surfing, Golfing, Top Notch Restaurants & Nightlife.
· Colon Free Zone – One of the Largest in the Western Hemisphere, the main reason that Panama offers great prices on Goods.

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What are the Procedures to Purchase Panama Real Estate?
Acquisition Of Real Estate

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Can foreigners own Titled Real Estate?
Yes, foreigners have the same rights as Panamanians and Panama has very strict property protection rights.

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What are Panama Real Estate Taxes?
· There is a Land Tax and Improvements Tax
· Land Tax is exempt for the first $30,000 of value, over $30,000 tax is about 2% of value. Example: On a Lot of $100,000 you will pay a yearly tax of $1,400 ($70,000 x 2%).
· Improvements Tax is Exempt for 20 Years, over this period it is about 2% of value. Starting September 2007 the Tax Brake will vary depending on value of property as shown below:
· Under $100,000 - 15 years
· From $100,000 to $250,000 - 10 years
· Over $250,000 - 5 Years
· Tax Break on Improvements goes from one owner to other, example if you buy a property built in year 2000 you will still have a Tax Break of 14 Years.
· There are Special Benefits that apply to working Farms, Right of Possession, Casco Viejo & Tourism Investment Real Estate.

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Are there any Closing Costs?
Yes, they can vary from $500 to $4000 depending on value of property and type of property being purchased. This Cost if paid by Buyer accounts for Legal Fees, survey(s), Notary and Registry Cost. In addition the Seller assumes the payment of a 10% Capital Gains Tax, which is equal to the Sales Price minus Registered Price and Sale Cost and the 2% Transfer Tax.

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What are common Real Estate Cost?
· Panama City Land from $15 (Mid Class Residential) to $100 (Commercial) a square foot.
· Panama City Ocean Front Condos - from $80 (older property) to $200 (newer projects) a square foot.
· Panama City Condos from $60 (older property) to $120 (newer projects) a square foot.
· Beach Front Land (Close to Panama City Sector) - from $5 to $25 a square foot (based on to 1 Acre Lots.
· Beach Front Farms (Undeveloped Areas) from $4,000 to $20,000 an acre.
· Highland Lots from $2 to $5 a square foot.
Bocas del Toro, depends on whether land is Titled or Possession; Titled Land is premium.

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What are Construction Cost?
Can be from $45 to $75 a square foot (varies depending on finishes).

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Can foreigners acquire Mortgages?

Yes Panama has over 100 Banks for you to choose from.
Rates are similar to US (about 6% - 7%).
Terms up to 30 years.
Financing up to 80% of Value of Property.
Loans on Land are not common.
Fire & Life Insurance will be required. Life Insurance can go up to 75 years which limits the Term of the Loan.
Come prepared Bring Personal References, Tax Forms, Credit History Report and other documentation required.
Our Agents can put you in Contact with Several Banks to go over details.

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How do we get to Panama?
· Panama is the Hub of The Americas with (7) Direct Flights from the US (Miami, Orlando, Atlanta, Newark, New York-JFK, Houston & Los Angeles). Also with direct flights from all the Caribbean, Central & South American Countries and from Madrid, Spain.

Beginning 2008, there will be direct flights from select Hubs in USA to David in Western Panama.

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What sectors of Panama are foreigners relocating to?
· Bocas del Toro & Caribbean
· Boquete & Surrounding Highland Areas, Such as Volcan/Cerro Punta
· Pacific Beaches of Chiriqui in proximity to Costa Rican Border, (Like Puerto Armuelles & Las Lajas)
· Panama City
· Pacific Coast Beaches (Proximity to the City)
· Highlands Near Panama City (Like Altos del Maria & El Valle)

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What are the conversions from meters & hectares to feet & acres?
· 1 Square Meter is equal to 10.763 Square Feet.
· 1 Hectare is equal to 2.47 Acres
· 1 Hectare is equal to 107,639.10 Square Feet.
· 1 Hectare is equal to 10,000 Square Meters. 
· 1 Acre is equal to 4,046.85 Square Meters.
· 1 Acre is equal to 43,560 Square Feet.
· 1 Acre is equal to 0.4046 Hectares.

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