Panama, Casco Viejo

Casco Antiguo, San Felipe

Last week I met with a young couple who spent about a week in Panama on vacations. They had a fantastic time running from our beloved 300 year old historic town to the mountains to the beach and the islands in the Caribbean (all in less than a week) and at the end of their trip they wanted to know if they could buy something in Casco Viejo. There are no legal limitations for foreigners to buy property in Panama (especially in Casco Antiguo).  But with time running short, there wasn’t much they could do other than get familiarized with the process and get them settled with a piece of the basics.

So, if you are planning to travel to Panama and exploring real estate will probably be part of the fun, this is the people you’ll need to meet:

1. A good realtor: If your time is limited, your best option in order to get to know the place and be presented with a range of choices is a good realtor. Don’t be dazzled by good language skills, ask questions, follow your instinct. Once you identified the property you might like, then your next interview will be….
2. A good lawyer: This is essential, as contracts are usually in Spanish and depending on what you would like to buy there might be title issues. In Casco Viejo, real estate is so old that is very easy to do due diligence. Be more attentive on coasts and islands, as there is a lot of what we call “derechos posesorios” or “rights of possession” which in most cases means you are buying air.  This is not a problem in Casco Antiguo, as the title is clearly defined in what we call the Public Registry.
3. A good bank: Once you identified a property, you might need a bank account to be able to buy it. Some lawyers offer escrow services, for which the deposit at signature can be done through them. But the closing needs usually a letter of payment from a local bank, so you’ll need the account anyways. Banks will require a list of things, mostly references to comply with the “know your client” policy that was installed after September 11^th.

About the references: Most banks will ask for a letter of reference from a bank back at home. So if you can travel with this and a commercial letter (both in original) you might be in good shape for your interview. Everything else can be sent afterwards. They usually require a copy of your passport, the letters of references, and maybe a job letter if you are on salary. If you work independently they’ll ask you about your company, it might be a good idea to have some material about it.

Now, if you are planning to get a mortgage, here are the documents they might ask in advance. They ask for them in original, so make several packages to apply to different banks at the same time. Here is what they’ll ask for:

*          Personal balance sheet with evidence (bank statements or appraisals)

*          Income tax for the last two years

*          Complete copy of passport

*          Copy of another ID

*          2 reference letters from your bank (date when the relationship started, average balance of the last six months and the balance at the date they issue the letter)

*          2 personal reference letters from a local person or from a prominent member of your community.

*          Completed and signed application.

*          Credit Score