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In Panama, some things are done in a different way than you are familiar with. A good example are real estate sales and rental listings. In Panama, it’s common to see the same house listed at several different prices with different agents. Sometimes the “spread” can be as much as $100,000 difference for the same house!
In North America, most houses for sale are listed as an exclusive listing. This means that one real estate office as the exclusive right to market the property. If that same office finds a buyer, they will typically make about a 6% commission. If an agent from a different office produces a qualified buyer, the “listing” agent will usually agree to split the 6% commission. In North America, a real estate agent has a fiduciary responsibility to the seller/buyer so all the dealings for the transaction are revealed “on top of the table.”
There are some exclusive listings in Panama too. But most listings are NOT exclusive. Instead, the seller has agreed to pay a commission to whoever produces a qualified buyer. This is why you will see the same house listed with several different office and at different prices. A typical commission in Panama is 5-6% of the sales price.
But sometimes, the seller has told the agent(s) that they need to NET a certain amount at closing and anything the agent can sell it for over that amount will be there profit. This is called a net listing. Net listings are illegal in most of North America, but it is business as usual in Panama. Here’s an example:
Joe and Mary need to walk away with $150,000 on the sale of their property. Real estate agent Sue advertises it for $220,000 – with room for negotiations, she’s hoping it will sell for $200,000 so she can walk away with a $50,000 commission versus the $12,000 commission she would have earned at 6%.
Maybe $200,000 is the right price for the house. But perhaps $150,000 is the right price. It’s hard to know in Panama because there is not a reliable MLS system to show comps of recent sales in the area. We do have an MLS system but most agents don’t use it and that’s why it’s not reliable.
Last year, I had breakfast with the broker for a local real estate office. He was bragging about how me made $600,000 profit on a NET listing near Boquete.
HOW WIDESPREAD IS THE PROBLEM? [Read more…]
Five years after you get your permanent residency in Panama you can apply for Panamanian citizenship and a Panama passport. To apply, you’ll pay $600, do in interview (in Spanish) to explain why you want to become a Panamanian, then take a history test also in Spanish. Then the President of Panama must sign the authorization. I’ve heard from people who have obtained their Panama citizenship and passport that the whole process can take a year. Panama provides this STUDY GUIDE to help you pass the test.
Panamanian citizens enjoy visa-free access to 118 countries and territories. This article from ANPanama explains why a Panama passport is so great:
(Panama City-ANPanama) The Panamanian passport is the second in Central America that offers more visa-free access to countries in the world, behind that of Costa Rica, according to the Henley Passport Index, the only one endorsed by the International Air Transport Association (IATA).
According to this strict ranking, in Central America the best classified is that of Costa Rica, which gives its citizens access without visa to 150 countries, followed by Panama with 140, El Salvador and Honduras are third with 134, Guatemala fourth with 132; Nicaragua fifth with 128 and Belize sixth with 99 countries.
The Dominican Republic, which is part of the Central American Integration System, appears seventh with access to 64 countries.
Panamanians currently enter 48 countries in Europe, 20 Caribbean islands, 18 American countries, 5 countries in Oceania and the same number in Asia and the Middle East and 3 in Africa without a visa.
Panama has 1500 miles of coastline! If you love living at the beach, there is a perfect beach for you somewhere in Panama. The weather is about 90 degrees every day (+/- 5) and most of the time, you'[ll have the whole beach to yourself.
During their Panama Relocation Tour, Greg and Anita found their perfect beach near Las Tablas! In the Azuero Pensinula, on the Pacific side of Panama, there are 10 different beach communities between Chitre and Las Tablas. Both Chitre and Las Tablas are have 24 hour grocery stores, great restaurants, hospitals, hardware stores, doctors, dentists and a thriving expat community. Some other beach communities in Panama are much more isolated and don’t have many amenities.
Initially, Anita and Greg rented a house then purchased a house right on the beach about 10km outside of Las Tablas. They can enjoy the sounds of the waves and amazing sunrises in Panama every day.
As a bonus, during your Panama Relocation Tour, you’ll learn how to buy houses with zero interest seller financing — which is exactly what Greg and Anita did to buy their amazing property on the beach. It was a rainy and overcast day when we shot their video – but every day’s a good day at the beach! Check it out at: