12 Blunders in Panama Real Estate


12 Blunders in Panama Real Estate

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Written by Matt Landau

Monday, May 19 2008

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Panama real estate has taken a lot of heads: the people left on the ground, screaming from the errors they made as first time investors. Here are 12 new mistakes to remember when investing in the Republic of Panama.

1. Believing someone when they tell you, you can sell a property no problem: This is a common ploy by real estate agents all over the world to make a sale seem more attractive. However, in Panama some markets are reaching their tipping points which means selling your property may not be as easy as it used to be. This site receives inquiries every day of individuals, stuck with real estate they can't sell, asking desperately for help to get rid of it. Sorry, no can do.

2. Buying a property solely from photos or hearsay: Would you buy a car or a home in the USA without ever seeing it in person? OK, maybe if you're having a midlife crisis, but come on people: how sensible is it to buy a piece of property without actually having been there? Virtual tours, photos, and "reliable sources" don't mean everything (and that includes this website). Any photo can be doctored up to look beautiful and any property can be portrayed in an overly positive light, so do the due diligence yourself and go see the damn property!

3. Investing on a piece of real estate with a partner you don't know extremely well: I've heard this one all too often-you came down to Panama, met a pleasant couple from the USA at the hotel, and decided to go in on a large piece of property with them some time down the road. Stupid! Make sure you know your investing partners extremely well before you put your name on anything. Down the road, what happens when your friendly couple decides to make decisions on your behalf? You're stuck up mierda creek without a paddle.

4. Expecting to get good service from an agency/developer after you've made a purchase: Contrary to its industry make-up, Panama is not a customer-service oriented place and once you've paid your money, you can bet the assistance you once got from your developer or agency will decrease. This is not true for all companies, but many put you on the back burner after they've taken your money, to focus on new clients and new paychecks. It sucks but it's the truth.

5. Assuming a project will be ready by the time it is originally projected: To put it bluntly, it's a miracle if a project in Panama is completed on time. Whether expecting to flip your investment to another buyer or simply move into your new home, it's best to add on half a year (in some cases longer) to the projected completion date. No joke.

6. Investing big money with a first-time developer: With the boom in Panama City and other hotspots of the Republic, everyone and their sister started construction companies. The result (compounded by a lack of materials, labor, and buyers) was a number of unqualified ones who will undoubtedly make first time mistakes or fail all together. This is not to say that reputable developers don't make these errors too (because they do, and often) but your odds are certainly better with an older, more established name.

7. Trying to build or do construction on your own: Whether you're doing your own compound or a simple getaway for retirement, a big mistake in Panama is trying to do it yourself. Let a developer or builder, one with experience in Panama, do it for you as it'll save time, hassle, and funds. The connections required (for labor, permits, and materials) are only ones that can be made over time so take our advice and find yourself someone who's done it before or partner with an experienced builder.

8. Waiting too long to invest: Sounds hypocritical right? We always talk about taking your time in Panama and doing the necessary research. But the other side of the pillow is waiting too long and missing out on tremendous investments. It's a common thing to say, "oh, I'm not worrying because something will be available in a year." And that's true: but chances are, it'll have doubled or tripled in price by then. If you really want a good deal, only seriously consider Panama real estate when your funds are ready to go. This will allow you to jump on the right opportunity and catch an investment as it's skyrocketing up, as opposed to already in outer space.

9. Trying to go around an agent or middleman to get a better deal: Panama's a small small place and trying to go around anyone will inevitably get back to you. Don't do it. We know of many owners, developers, agents, and buyers who have done this before and while we don't reveal it on the website or in person, you know exactly who you are and so do we: the word travels fast. It's like a high school here, with gossip omnipresent. If you plan to stay in Panama for a while or make a serious investment, and you play dirty, I can guarantee you'll regret it down the road.

10. Seeing one property and falling in love: Love is blind, and it'll take over your mind. Those are the lyrics to a Lil Kim song from the 90's and while the rapper is talking, in the song, about a gangster she used to love but then got shot 23 times, it also applies well to Panama real estate. Even if you've stumbled on your dream investment, it is essential to view additional properties so that you have something to compare it to. Otherwise you won't know what else is out there.
* The lyrics are followed by the phrase I don't even know you and I'll kill you myself.

11. Becoming obsessed with beachfront: Everyone has it in their head that the dream property is a waterfront piece. What they don't know is that a large percentage of beachfront investors regret the investment because they had no idea the maintenance and attention required. There is limited beachfront real estate in Panama as there is elsewhere in the world: the trick is to getting over your obsession and looking at more sensible and practical options: perhaps close to the beach, or with views of the beach, but not necessarily on it. This is a cheaper way of thinking too.

12. Choosing a big shot lawyer: I hear it all the time. "My lawyer is the oldest in Panama" or "I have the card of the lawyer to Ruben Blades." So maybe you do have a well-connected lawyer in Panama, but chances are he's funneling all your work to someone else. Let's face it: just because you're "friends" with his nephew (who you actually just met on the plane) why would a lawyer of such glamour want to take you on as a client. In some cases it's true and if so, congratulations. In other cases, it's better to find a smaller firm (lawyer) who will work harder, charge less, and provide better personal service. Yes, it's all about connections in Panama; but we find it more successful to have true private relationships with your lawyer rather than prestigious labels you'll never actually meet.

Comments (4)

Off Plan Property Exchange: Great Advice

Fabulous advice. I almost agree with everyword.

You've got to keep your wits about you at all times and understand that someone who sells property earns sale commission. So how can you trust the word of anybody who is paid to tell you waht you want to hear?

Cheers,

Stu

www.offplanpropertyexchange.com

May 19, 2008

Richard Detrich: 12 Blunders . . .

Right on the money Matt, I couldn't agree more!

Richard

www.richarddetrich.wordpress.com

May 20, 2008

Cyndi: Senior Mortgage Loan Processor

Great insightful advice. And I appreciated your excerpt from that Lil' Kim song! That was hilarious.

May 21, 2008

mike in ph: What a scam!!!

I left Panama without paying the rent, eletricity, phone, cell phone, janitor, lawyer, grocery stores, maintenance fees bills when I realized that everything the realtors told me online before retiring and moving to the country, was a big lie, an huge scam. The lady that was living with me gave me the money, I bought eletronics instead and did not pay bills. Maybe you think I was wrong but many do this in your country. The Panamenians learned a lesson they will never forget!

I was shocked with the Panamenian culture, lack of education, garbage in many streets, corruption, foreigners being killed, their homes robbed during the night, violence against locals, people having to hire bodyguards, fences all over. Too much rain, dirty streets, many closed stores downtown, high oil prices, thieves, smelly Bay, traffic jams, people stealing food from my refrigerator,in my street three robberies in a week. I left some worn-out stuff behind since i had no money to ship it back, the man who were in charge to sell and send me the money to me in blacklick, ohio stole everything now drives a taxi.

I got an old apartment to be painted in a week and since the landlord had no money and was expecting the rent each month to pay the guys, she went broke and the apt. was foreclosured since we didn't reach a deal, first to fix then i would move. i moved and the men were there all day doing nothing since real estate people in Panama are liars. No money, no work. Apts with leakings, bad constructions, too hot, a/c all day, high electricity bills, I got pissed off and left without even calling the laywer and found a way so my wife could accept me back till I could find another lady, not so easy since i do not like sex anymore. OK it was a big loss for them but now they will learn to deal with foreigners like me. They can find others to exploit.

No I would never return to such smelly place, now I am living with a woman i met online in San Fernando, La Union, Philipinnes, I am keeping my pension in US and she is paying the bills I found a job for her so I stay at home watching my tv, smoking my cigarretes like I did in Panama, Mexico, Kasakhstan and other places. When I get bored with her I will find another filipina online, I am 63 years old, I just need women to clean the apt., prepare food, bathe my dogs; in such underdeveloped, starving country women jump on americans at least they can eat and have a roof.

Can Panama survive a shortage of food, unemployment, rising oil prices? I doubt. This bubble will burst soon, believe me and only the rich will survive in such a small. corrupt country.

mike

June 06, 2008

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