As a general rule it is NOT a good idea to sign an exclusive listing agreement with a real estate agent or company. Due the lack of a fully integrated Multiple Listing System (MLS) in Panama, real estate agents and companies are as good as the clients they bring to the table. Sometimes they have the right clients and sometimes they do not. As a seller, you are limiting the exposure of your property by signing an exclusive agreement. If a real estate company insists on an exclusive agreement, they are probably not looking out for your best interests. Additionally, should your property sell during the terms of your exclusive listing period, whether by efforts of the exclusive listing agent or not, you are obligated to pay them a real estate commission, this is not the case with non exclusive agreements.
It all comes down to publicity and exposure. The more exposure the better your chances of selling. We recommend asking real estate companies for statistics on their demographics and reach as well as how they will promote your property.
Taxes due upon Sale
If you are looking to sell your Property in Panama, one of the first details you should be aware of are the taxes due upon sale. Whether your property is in the name of a Corporation, or your own personal name, you should contemplate 5% of the final sales price in transfer and or capital gains taxes.
In the case of a share transfer of a corporation that holds a property, the law dictates that the buyer is to retain 5% of the sales price and take responsibility for the payment of taxes. This generally takes place within 10 working days of the share transfer being finalized.
In the case of a transfer of the property then there are two different taxes to consider. One is a 2% transfer tax, and the other is a 3% capital gains tax. Both of these taxes are calculated based on the registered sales price of the property and they must be paid before the transfer of the property can be finalized in the Public Registry of Panama. In cases where the old capital gains tax calculation (10% of the difference between the registered value and sales price) is less than the new 3% capital gains calculation, it is possible to ask for a reimbursement of the difference. This reimbursement generally takes about 4 or 5 months to complete.
The standard real estate commission in Panama is 5% of the sale price. In some cases if the property is remotely located or requires special resources to show, such as island properties, it is common for real estate companies to charge a higher percentage to offset the expenses of showing the property. Commissions are generally paid for by the seller. If more than one real estate agent is involved in a sale, for example buyers agent and a sellers agent then they will split the overall commission between themselves.
Setting your asking price
It’s always a good idea to set your price based on a 3rd party property appraisal. There are a number of reputable appraisal companies providing property evaluations that are accepted by most major banks. These companies include: AIR, AVINCO, Zubieta y Zubieta, Panamericana de Avaluos and Panama Florida to name a few. While appraisals are not necessary for all properties, they are a very helpful tool in assessing a realistic market value, and are also vital in cases where the buyer requires bank financing.
When it comes to being competitive in the Panama Real Estate Market the rules are universal. Price yourself competitively with comparable properties, list your property with a few different real estate companies and present it in good showing conditions.