Buying property in the construction phase (or pre-construction as it is referred to in Panama) is a great way to participate in the real estate market without having to come up with the entire price at the time of purchase.
From last week’s article you already know why buying pre-construction is making a comeback in Panama. Now it’s time to take a 50,000-foot perspective to gain some insight based on our nearly 10 years in this market.
Here’s what buyers wish they knew prior to purchasing pre-construction real estate in Panama:
- Know Thy Developer: The biggest learning point here is don’t fall for glitzy and glamorous renderings. Find out what else the developer has done (Google them) and try to get a sense of client satisfaction with folks who have bought in the past. Did they finish on time? Was what they delivered ultimately what they were supposed to deliver? The good news is that there still are a handful of GREAT developers in Panama, both in the city and at the beach. But knowing precisely who you’re working with is critical to success.
- Determine The Stage Of Construction: Figure out what stage the developer is REALLY at in terms of construction. Try to get a copy of the actual availability list to get a sense of how much has sold, keeping in mind the general rule in Panama: a developer won’t start until they’ve got at least 50% of the project sold out. And regardless of what the developer tells you in terms of a finish date, plan on an extra six months. That way you’ll be surprised and delighted if they end up finishing ahead of schedule.
- Get Ready For Surprises: Plan on deficiencies such as leaky windows, wobbly floor tiles, poorly installed fixtures and light sockets that don’t work. The good news is, all of these things are covered in the guarantee, so you are protected. The bad news is, you will need plenty of minutes on your cell phone plan (or a great property manager) to follow up with the developer’s on-site building manager to make sure all of your issues are addressed to your complete satisfaction. It usually takes at least 2-3 visits to get things right.
- Spend Time Snooping: Get a sense of traffic and noise patterns, band practices at 7am on Saturday, party buses driving by all hours of the night, and general neighborhood-specific issues that you may not have thought of when you drove by the project for the first (and in some cases only) time. On the investment side, it is always great to get in ahead of the curve on initiatives such as neighborhood restorations, mass-transit development, and other infrastructure projects, which could drive up your value before you even receive the keys.
Once again, if you haven’t read our article exploring the “Why’s of buying pre-construction in Panama”, I would encourage you to have a look. And as always, if you have any questions about the buying process, what’s available, and who we like as far as developers, a Panama Equity agent is only a phone call or an email away!