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Essential factors to consider when purchasing a villa in Panama

Villa in Panama facade

Panama is one of the most beautiful countries you’ll ever see. Its fantastic weather and a unique location between the Caribbean Sea and the Pacific Ocean means that people here can enjoy the gorgeous beaches all year round.

Panama’s history as a commercial hub has led to highly developed cities that offer all the modern comforts you can ask for. Its dollarized economy makes it convenient for U.S. citizens to live and do business in the country, as many U.S. credit cards don’t charge extra foreign transaction fees. Then, there’s the fact that many Panama villas, condos, and houses for sale are more affordable than similar properties in a number of popular U.S. cities.

All these factors may make living in Panama seem like a dream, but it’s a dream that you can easily turn into reality. The best part is that buying real estate in the country is a relatively straightforward process, even for foreigners.

Buying your dream villa: 9 factors to consider

Villa interior

There are many fantastic opportunities to purchase and own property throughout Panama. If you are looking at purchasing a home for vacations, retirement, or investment , villas are likely the property type that would interest you the most. Fortunately, the country’s reputation as a popular tropical destination means that there are quite a number of Panama villas for sale.

Do keep in mind that you will be purchasing property in a foreign country. As such, expect the buying process to be slightly different from what you’re probably used to in the United States.

If you are planning to buy a villa in Panama, always keep these factors in mind to ensure the home you purchase is perfect for you:

  1. Choose the location carefully.
  2. Panama is a relatively small country with a landmass that is smaller than the state of South Carolina. Despite the limited size, the country offers diverse property locations, giving you the opportunity to buy a home in an area that caters to your preferred lifestyle.

    Some of the most popular places for expats to live in Panama include:

    • Bocas del Toro
    • Bocas del Toro, where the beautiful Red Frog Beach Resort is located, is one of Panama’s westernmost provinces. It is a highly popular tourist destination because of its gorgeous, pristine beaches. Thanks to a large number of foreigners in the area and relatively lower cost of living compared to other cities in Panama, expats here tend to purchase vacation villas that turn into retirement villas.

      Foreign residents who are after an idyllic tropical lifestyle will absolutely love the turquoise waters and white-sand beaches in Bocas del Toro. Water activities such as snorkeling and paddle boarding are popular things to do for both tourists and residents.

    • Panama City
    • Panama City is the country’s capital and one of the most modern cities throughout Central America. As with most capital cities around the world, Panama City is where the majority of expats in the country take up residence, including those who have moved to the city for business. If you prefer a vibrant urban lifestyle, Panama City may be the right option for you.

      Expats can easily find a wide range of activities to try during their days off, including wandering the streets of Casco Viejo and watching ships pass through the Panama Canal. In terms of facilities, Panama City offers world-class public transport and healthcare.

    • David
    • David is Panama’s second largest city and the capital of the Chiriquí Province located in Western Panama. The city is well-known among locals for its great healthcare, education, and transportation sector. Another welcome fact is the much lower cost of living compared to Panama City, making David a great option for retirees.

      Although David is also a large city, it offers a much different experience than Panama City. Compared to the highly urbanized capital city, the vibe in David is much more traditional and Latin American

    • El Valle de Antón
    • El Valle de Antón is about a 2-hour drive from Panama City. The town is best known for its relatively cooler weather given that it sits on the crater of an extinct volcano with an elevation of 600 meters.

      Expats love El Valle de Antón for its amazing blend of nature and city life, resulting in a tranquil small-town lifestyle. Residents can get essential needs within the town, but those looking for something a little more sophisticated can easily take a weekend trip to nearby Panama City or Coronado.

    • Chitre/Las Tablas
    • Chitre and Las Tablas are two locations on the Azuero Peninsula, which is found on the southern part of Panama. Chitre is the main hub in the area where you’ll find many modern amenities and commercial establishments. Nearby Las Tablas is considered the cultural center of the peninsula.

      The Azuero Peninsula is a fantastic place for expats to live because of its lower cost of living. However, the expat community isn’t as large as the other areas mentioned previously. As such, Chitre and Las Tablas are particularly popular among those who wish to experience a more “traditional” Panamanian lifestyle.

  3. Do your research on the community.
  4. Villa living room and dining area

    Many of the best Panama villas for sale are located inside established communities, including gated private neighborhoods or even beach resorts.

    Before buying a home in a residential development, it’s best to learn more about the community to see if it’s a good fit for you. Check out the amenities within the neighborhood, look into the developer’s reputation and track record, and find out who is currently managing the property. You may want to look for reviews to get some idea on what to expect when you live in the neighborhood.

  5. Check out the immediate area surrounding the villa.
  6. Many buyers have fallen in love with a property at first sight and bought it on the spot—only to discover that it’s not as perfect as they originally thought. They learn that it’s actually difficult to get to the water from the villa, or the view is only beautiful at a certain time of the day, and so on.

    Considering the steps you need to take to acquire property in Panama, there is definitely no room for buyers’ remorse. Make sure you scope out the immediate area surrounding your preferred villa. Visit it at different times of the day. Attempt the walk down to the water from the house. Check for potential issues with privacy, and ask the seller or property manager about the renovations you’re allowed to make.

  7. Determine how to finance your purchase.
  8. Expats will need to carefully assess their financing options prior to looking at Panama villas. Generally, banks in Panama will happily finance foreigners, but take note that most lenders require at least a permanent resident status.

    If you live and work in Panama, you will likely not have any problem obtaining a mortgage, especially if you already have a history with the lending bank. If you live abroad or generate your income from abroad, the process of obtaining a home loan can be long and difficult.

    Most lenders also require that you obtain a life insurance policy for the amount of the mortgage, with the lender as the beneficiary. If you’re buying a property with improvements, that is, a home, building, or other structures built on the land, lenders will also require fire insurance. Fire insurance rates vary according to the type and construction of the building or structure, and the policy typically covers other risks, such as earthquakes, storms, and floods.

    Panama’s status as a global commercial hub means that there are more than a handful of banks that offer mortgages to foreigners. Some of the top banks in Panama for mortgage include:

    • BAC Credomatic
    • Banistmo
    • Banco General
    • Banesco
    • Global Bank
    • Scotiabank

  9. Factor in the extra time it will take to close on the villa.
  10. Buying a Panama villa will take a little longer compared to buying a home in California. This may seem obvious at first, but some buyers fail to understand just how long the process can take. In some cases, closing a sale can take roughly six to eight weeks from start to finish. However, there have been cases where the entire procedure took three to six months. Keep this in mind when planning the timeline of your purchase and eventual move to Panama.

  11. Consider renting for an extended period of time as a test run.
  12. Outdoor pool of a villa

    Purchasing property in a foreign country is a big commitment. With that in mind, it’s highly advisable that you spend at least 3-6 months renting a property in your preferred location before you begin looking at villas to buy. However, this may not be possible for everyone, so at the very least, take several long vacations in Panama.

    This will help you experience what life is like in the community of your choice before fully committing to living there. Aside from giving yourself time to determine whether you like living in Panama, an extended stay will also allow you to monitor sale prices for villas and other properties. This is highly advantageous as this can help you determine the “right price” for your dream villa.

  13. Know the type of property purchase
  14. Inside a villa

    Regardless of the type of property you’re purchasing, there are two basic ways to buy real estate in Panama. Determining which category your purchase falls under can spare you a lot of headaches in the future.

    The two basic ways to purchase real estate in Panama are:

    • Purchasing a property with a clean title
    • Purchasing a property with rights of possession (ROP)

    How can you tell which classification your villa falls under? In general, you will want to ask the seller for a copy of the public deed, also known as an escritura, and/or The Ownership and Encumbrances Certificate, also known as Certificado de Registracion. In the event that the seller cannot produce any of the two documents, be sure to ask for the finca number, which you can then use to find the title for the property on the Public Registry website.

    If even a finca number search yields no title, it’s very likely that the property you are looking at is an ROP property. In such cases, you will want both an experienced real estate agent and a local lawyer to assist you with your purchase and help you avoid any problem. A local lawyer will also be able to assist you in converting the ROP property into a titled property with the Public Registry. This process includes:

    • Buyer signing a Professional Services Agreement for title processing
    • Buyer signing a special Power of Attorney for title processing
    • Buyer providing the lawyer with a copy of the ROP Purchase Contract which will be filed with the titling application
    • Lawyer gathering, coordinating, and submitting all property documents, surveys, and other legal documents needed for the title application to the Autoridad Nacional de Tierras(ANATI)
    • Lawyer coordinating all necessary inspections and other requirements from ANATI
    • ANATI issuing resolution for property title
    • Public Notices being published in 3 local newspapers
    • Public deed of title being issued by the Public Registry

  15. Hiring a local real estate lawyer may be beneficial.
  16. Panama has its own laws surrounding the purchase and sale of real estate. This is why it’s highly advisable that buyers work with respected Panama real estate agents who are experienced in working with foreigners. In some cases, however, this may not be enough. One such case would be the aforementioned issue with ROP properties. This is where hiring a local real estate lawyer may be beneficial.

    A local real estate lawyer can guide you through or even help you avoid unexpected complications with your real estate transaction. Their services may include registration of title for ROP properties, review of sale contracts, and even English translations for all documents.

    Should you feel the need to hire a lawyer in Panama, don’t hesitate to ask your real estate agent to draft a list of recommended professionals. If your agent has assisted numerous expats with their real estate transactions, they should be able to provide you with a list of trusted law offices. Alternatively, you may also ask for recommendations from people living in the community where your desired villa is located.

  17. Find Panama real estate agents who specialize in your preferred property and location.
  18. There are many real estate agents in Panama who can assist you with your purchase. However, certain real estate agents will have more experience with specific types of properties and/or locations.

    If you have a particular preference when it comes to your villa’s location (ocean view, beachfront, etc.), it’s highly advisable to look for an agent or broker who specializes in those types of properties. These professionals will have in-depth knowledge of the nuances behind what makes certain properties worth the asking price and more.

Find the perfect villa in Panama at Red Frog Beach Resort

If you’re in the market for gorgeous Panama villas, why not start your search at Red Frog Beach Resort? Located at the Bocas del Toro region, the resort offers a wide range of real estate properties, including a secluded and private villa community that offers stunning ocean views. You can enjoy all the perks of upscale island living while staying in a safe and modern community.

Red Frog Beach Resort has been recognized with a Green Globe Certification and by the Central and South America Property Awards in recent years. Furthermore, the resort has been featured numerous times on a variety of TV shows and publications, including, Forbes, The Washington Post, and the World Property Journal.

If you wish to learn more about available villas for sale or the beach resort community, get in touch with our U.S. office at 281.892.1344 or our Panama office at 507.6951.6518. Likewise, you may send any inquiries to realestate(at)redfrogbeach(dotted)com.

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