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Since the mid-1990s I’ve been buying and selling real estate as an investor. So, I’m no stranger to real estate closings.
In Panama, I’ve purchased several properties and the closings all went very smoothly. That all changed this month when I wrote a contract to buy a house for cash and close in a few weeks. Sounds simple enough – right?
Not so fast! TIP = This is Panama
In Panama, it is customary and advised that your attorney creates the purchase contract and all closing documents. For titled properties, there is always a FINCA number. Once your attorney has the FINCA number they can do a quick title search to verify that the person selling you the property is really the owner and find out of there is a mortgage or any back taxes. The seller had a survey so a lot of information needed for the contract was on the survey – like how much land I got with the house.
The property I am buying was all clear, so my attorney prepared the purchase contract. The seller and I both signed and I paid him earnest money directly.
There are no title companies or escrow offices in Panama. Instead you close at an official Notary. But before you can close a titled property, the seller needs to show a receipt that the 2% transfer tax and the 3% capital gains tax has been paid. Since the Seller works, I hired my Panama CPA to take care of the payment of the taxes. He got a notarized letter from the seller authorizing him to pay the taxes.
But before you can pay the taxes, it is necessary to get a statement from the DGI (taxing authority) about how much you owe based on the sales price. To get that statement, the DGI needs a NIT number (tax identification number) for the property. Apparently, this property, which was purchased more than 30 years ago, did not have a NIT number so my CPA had to apply for one.
After 7 days, my CPA finally gets the NIT number and presents it to the DGI. One of the delays was a Panama holiday in the middle of the process. There are a LOT of Panama holidays and the whole country shuts down to party.
Finally, the taxes got paid.
With the receipts for taxes paid, my attorney could prepare the closing documents then send to me by courier to Boquete the next day.
The documents were supposed to arrive at Uno Express by 10am. But they did not arrive until almost noon.
With closing documents in hand, I drove 30 minutes to David to meet the seller to sign everything at the Primary Notary. When I arrived, the seller is there with his Mom, Dad and sister for the “big event”. A friend met us there too because we planned to go out to lunch after closing.
The whole closing process should take about 30 minutes. Remember, I’ve done this many times before and it was always quick and easy.
But not this time.
A 20-something kid who works at the Notary comes out to tell us that because the closing documents were prepared by an attorney in Panama City, he needed to see an authorization (email is ok) from a Notary in Panama City that the documents could be signed in David. This has never happened before!
I call my attorney in Panama City who tried to talk some sense in to the kid to no avail. So, my attorney goes to the Notary’s office by her only to find out he is out to lunch at 2pm and they don’t know when, or if, he will be back that day. (It’s Friday so maybe he decided to take off early).
My attorney suggests that we go to Notary #2 in David. Luckily, it is only 5 minutes away. We, all 6 of us, arrive only to find out that the Notary #2 has already gone home for the day.
I’m following the seller and trying to keep up with him. I turned left on a road that I thought was a one-way road only to find it is a two-way road. Yikes! I cut in front of a taxi (they cut in front of me many times). But, this time, there is a cop right behind the taxi. He pulls me over to give me a lecture in Spanish about safe driving. Luckily, I did not get a ticket.
Finally, we all arrive at Notary #3. The documents are signed and a fingerprint next to the signature. Then we wait and wait for all the stamps. You cannot have any kind of an official document in Panama without a lot of stamps all over it.
I felt so bad that the seller and his whole family had to wait so long and had to drive all over town to get this closed, so I gave them $100 to go out to dinner.
My friend and I went to TGIF for a margaritas and dinner.
What an ordeal!
Finally, I bought a great property which I plan to fix up then resell to hopefully make a nice profit. The house is on a really big lot which I may subdivide so I can build another house on the other lot.
Lessons learned on this one – I should have let my attorney in Panama City take care of getting the taxes paid. Getting just about anything done in Panama requires going to an office in Panama City. Trying to get a NIT number, or anything else, from anywhere but Panama City causes unnecessary delays and frustration.
The first Panama Relocation Tour was in 2010. Every year since then, we host a Reunion Party (and pay for food) for all those who have been on the tour then moved to Panama. 100 People attended the March 2018 Reunion Party. Of course, many more have com on the tour then relocated to Panama. This video is from the 2018 Panama Relocation Tour Annual Reunion Party. It’s great fun to reconnect with so many people who cam on the tour then moved to Panama!
You can come to the 2019 Reunion Party if you come on a Panama Relocation Tour then relocate to Panama too!
During a Panama Relocation Tour, we spend one night in Santiago Panama. Santiago is about half way between David, on the far western side of Panama, and Panama City. It is a popular stopping point for buses and other travelers who are driving to or from Panama City. It’s a big town with a population of about 90,000 people. Santiago has everything you’d ever need or want including hospitals, malls, 24 hour grocery stores, affordable housing, an airport and super friendly people. Every time I go through Santiago it seems something new has been built. But it’s hot – really hot – mostly because it is not close enough to the Pacific Ocean to enjoy the ocean breezes. And, it’s not at a high enough elevation to get away from the coastal heat and humidity.
At sea level in Panama the temperature is about 90 degrees +/- 5 degrees. For every 1,000 feet increase in elevation, the temperature drops about 4 degrees. So, you can literally pick your ideal temperature in Panama based on the elevation. I live at 4600 feet above sea level with Spring like weather year round.
For years I’ve had a heck of a time finding any expats who live in Santiago… until now. Meet Rick Shultz, an expat who has lived in Santiago with his wife Elsie and their teenage son for about 13 years. Starting with the May 2018 tour, we’ll meet Rick and his family when the tour group is in Santiago. During a Panama Relocation Tour, we meet with expats who live throughout Panama. It’s interesting to hear how very different each of their experiences are in various areas. Each part of Panama offers different weather and amenities. The only way to find the place that’s best for you is to come see Panama up close and personal (hopefully during a Panama Relocation Tour). Read the article below to learn what Rick has to say about living in Santiago.
Panama – An Expat’s View
Well, of course, someone did finally do something about it, or at least about the heat and humidity of what we now like to call, tropical paradises. A young man by the name of Willis Carrier from New York State did so in the early 20th Century when he designed and built the world’s first modern electrical air conditioning unit.
Not long after that, people began retiring to places like Florida which, under normal circumstances, would have been considered an inhospitable marshland of unbearable heat and humidity, populated mostly by snakes, alligators, and a few hearty Indians. There might have been an occasional, but determined, American retiree, but there weren’t many, at least not back then.
Panama is a lot like Florida, so far as the heat is concerned. And, it’s also grown exponentially just like Florida, to a great extent because of the cooling power and dehumidification capabilities of modern air conditioning.
Yes, expats are going to find that it’s hot and humid down here, just like in Florida. But it’s quite bearable in most places with air conditioning, and in some unique places up in the Panama highlands, it’s comfortable even without it.
I’ve been here for 13 years, and love the place. Sure, it’s got a few warts and such, but so does every place on the face of the earth. Driving in Panama City takes nerves of steel, and there’s an old joke about when you’ll be in a car wreck. Not “if” you’ll be in one, but “when”. It’s something you accept like death and taxes. You “will” be in an accident if you drive around regularly in Panama City.
But I intended to write about the seasons in Panama here and got sidetracked. Sorry. The seasons take a bit of getting used to. When I lived back in the states, we had all four of the regular, normal seasons they write about, or at least a good portion of them since you can forget about snow and freezing weather in nearly all parts of Florida.
But Panama is different. Here, we’ve got the hot rainy season that lasts from about mid-April to mid-December, and then we have the hot dry season that comes during the rest of the year.
Did I say it’s hot here? Well, yes. That is, if you’re from anywhere other than the Deep South in the US. During the the hot rainy season, which is called “winter” here, you realize that you really are in the tropics. It rains. Almost every day. And when it rains, it rains HARD.
And then, after awhile, it’ll either stop altogether and the sun will peek through the clouds, or it will slow down to what’s called a llovizna. A llovizna is defined as a sort-of drizzle with smaller droplets than regular drizzle. The drops seem to float in the air instead of falling. It’s a common phenomenon in some parts of South American, notably Chile, Peru and Bolivia, but also along the Cantabrian coast of Spain. In some cases, the llovizna drizzle will be so light that it completely evaporates before reaching the ground. It’s weird. Welcome to Panama!
On the other hand, the hot “summer” season here is hot and DRY. There will be an occasional shower, but it will be nothing like the gully washing variety we have nearly every day in the “winter” months.
Your water bill will go up because you’re constantly watering the plants that you meticulously placed around the house and garden, and you will occasionally lose a few because the humidity is higher than the plants need to stay healthy.
It’s great here. You might just love it! I’ll write more next time. And if you have any questions about moving to or living in Panama, write me or Jackie. You’ll find out a lot more by taking a tour with her and a bunch of others to see the country through her exciting Panama Relocation Tours. That’s when you’ll find out what life would “really” be like when you actually live in this delightful country. She won’t show you the “rose colored glasses” tour either. Instead, you’ll see the real Panama. And you’ll get to meet with lots of other expats to get their viewpoints too.
Panama has so much opportunity for people of all ages. With the new visa programs, it makes it easy for young people to live and work in Panama. You’ll learn all about the various visa opportunities during the tour.
The tours attract people from all over the world, in all age groups, not just retirees. And during every tour, Jackie takes you to meet with expats like me for lunch and/or dinner around the country, because she thinks it’s important for you to get information from a variety of sources to help you make the right decision about relocating to Panama.
Jackie provides you a genuine “boots on the ground” tour from one end of Panama to the other. You’ll see the REAL Panama for yourself. It’s the only way you can really make an intelligent decision about relocating to this beautiful, safe, and affordable country.
See you next time!