Mistake #1: Your real estate agent tells you financing will be no problem or your friend who just got a mortgage a year ago says not to worry.
Solution – Don’t accept banking advice from anyone other than a bank representative: Chances are the advice your getting on mortgages is not valid or up to date due to ulterior motives or outdated experiences. Over the past years, banks have changed their policies and what could once be financed up to 95% is now a totally different ball game. Panama Mortgage information should be considered on an individual basis and be dealt directly with a bank rep.

*This article was courtesy of The Panama Real Estate Report, a $99 guide on How to Buy Real Estate in Panama for the first timer. It covers topics that other sites wouldn’t dare, and is the culmination of years of info gathering. Get your copy NOW by visiting http://www.thepanamareport.com

Mistake #2: You fly into Panama, find the first agent you meet, take his/her word on everything, and eventually buy real estate having never used anyone else.
Solution – Consult several agents: Because Panama has no multiple listing service, agents have the upper hand on buyers. By talking to multiple agents, the buyer gains multiple perspectives as well as Panama property listings: a must-do in a market where the flow of information is seriously restricted.

Mistake #3: You assume the price you’ve been presented with is accurate, no questions asked.
Solution – Don’t overlook the true selling price of property: This goes for completed units, pre-construction property and raw land. They won’t like it, but ask your agent what commission percentage they’re making to determine whether or not that might influence their decision on what to offer.

Mistake #4: You deal only with an agent or middle man, neglecting to contact the true owner of your property/project directly.
Solution – Always meet with developer/owner: We’re not saying go around the middle man! This will piss a lot of people off, but talking to the developer or owner is a necessary evil. In pre-construction, it’s important because you need to know who will be building your unit: do you trust them? In land or finished homes, it’s important to delineate the true price of the real estate, so to ensure no one is pocketing a secret commission on the deal.

Mistake #5: You purchase real estate in your personal name, thus subjecting yourself and your family to serious risk should anyone go after you legally.
Solution – Consider buying real estate using a Panama corporation: Panama’s an offshore haven and buyers should take full advantage of that. Starting a corporation (it costs $1,000) and buying real estate in its name will serve two purposes: first, it protects you and your assets, and second, if you ever want to sell any or all of your property, you can simply transfer the shares of the corporation to the new owner. Voila!

Mistake #6: So you find a development you really like and buy a plot of land on which to build your dream retirement home. Next thing you know, some crazy guy buys the lot next door and builds a giant purple house with a big metal gate fence and all of a sudden, your property is devalued and referred to as “the house next to the crazy guy’s compound”.
Solution – Verify with developers that the development has construction restrictions. It may sound counterintuitive: buying a piece of Panama real estate that you can’t do whatever you want on. But if you have taste, chances are your plans for a house or fence will be approved in your development anyway. What you don’t want is to live next to a property, be it someone who’s colorblind or simply a nutjob, that subtracts value from your own.

*This article was courtesy of The Panama Real Estate Report, a $99 guide on How to Buy Real Estate in Panama for the first timer. Find out which agents to trust, which land to invest in, and where the newest hotspots are for real estate at http://www.thepanamareport.com

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Filed under: Real Estate on May 6th, 2008