Back in 2007, one could find a Panama real estate agent and Panama agency on every corner. From taxi drivers to hotel concierges to building administrators; it seems that almost everyone that spoke a little bit of English was in the business of selling Panama real estate. In 2012, however, the situation has changed and many of the Panama real estate agents and agencies that remain are still in the business because they understand the fiduciary role that they must play in assisting both buyers and sellers in what is still a very dynamic real estate market in Panama.
Real estate agents in Panama typically earn between 2 and 6 percent of the sale, depending on the type of property. It is common for the sellers to pay the real estate fee, and if more than one agent is involved in the sale, then the commission is split amongst the agents involved. It is not uncommon for both buyer and seller to be represented by the same real estate agent in Panama.
Why should you use a Panama real estate agent when considering buying property?
If you are considering buying real estate in Panama, it is highly recommended to use a real estate agent for the transaction. The law certainly doesn’t require it, however what you think you may “save” in going directly to a seller or a developer will, in the end, cost you much more. In fact, I’m not even suggesting you need to use my services: my friends and relatives can attest, I would however always prefer you use a reputable agency rather than no one at all.
You will benefit from working with a good real estate agent in Panama for a number of reasons, not all of which revolve around getting the best price. A qualified and experienced agent will be able to give you insight into the history of the building (quality of the administrator, owner vs. tenant occupancy, construction issues like leaks, pending assessments, historical sales information), the quality of the neighboring buildings, future construction and development in the area (you don’t want a disco being built next to you, but a metro stop could be a good thing), future plans for the neighborhood or development, as well as insight into the developer if the property happens to be still in construction.
A qualified real estate agent also gives you insight when it comes to negotiating. If you are working with a good real estate agency, they can tell you about past sales they may have done with the developer or in the building, extras that could be bargained for, offer and counteroffer strategies that are common in Panama, and the tax implications and seller motivations for keeping a transaction within the scope of a corporation (called Sociedad Anonimas in Panama). Trying to figure out these nuances on your own is nearly impossible.
Is your Panama real estate agent qualified?
The only way to know if you are working with a qualified real estate agent is to ask them a lot of questions. Try to find out about past sales, past clients, developer and agency relationships, and what type of properties they are willing to show you. Some agencies are known to have a bad reputation in Panama and therefore 3rd party real estate agents may not be willing to show their properties or work with their clients. That means that if you are working with one of these agencies, you may not get a full picture of the market because they are limited to the types of products they can offer you.
Panama has no multiple listing service, which means that it is very important to work with an agent or real estate agency that is going to have the capacity to show you everything you are looking for. Some real estate brokers will only show properties that they have listed directly with the sellers. It means less work and more commission for them, but it may also mean that you will be limited to what options are presented as being “available.” A good real estate agent in Panama will be able and willing to show you everything that you want to see, and have the resources, connections, and relationships to identify and offer the properties that you are looking for.