Save Over $100,000 on Property at Panama Auctions

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Thursday, March 27, 2008
Panama City, Panama

Read more about Panama in International Living Postcards—your daily escape

Before you join the expats and investors flocking to Panama City, there’s one area you must know about. Possibly the most popular among expats today is the Canal Zone, which was formerly a U.S. military zone and is still referred to as las áreas revertidas, or the “reverted areas.” Here, the Ancon district encompasses neighborhoods such as Diablo, Cardenas, Los Rios, and Amador.

The appeal here is very simple to understand: It’s a low-density, verdant urban area, accessible by a network of excellent new highways. Just minutes from the downtown “skyscraper jungle,” it feels like a small town, but offers everything from theater and cinemas to shopping and the world-renowned financial district.

On a recent Sunday stroll in Ancon, I reveled in the community atmosphere and international flavor. Passersby jabbered away in English, Spanish, and other languages, too. Families—most of which seemed to have all three generations present—laughed and called to each other. A gaggle of kids ran past me to the paletero (popsicle man), clamoring for tropical-flavored popsicles. People actually waved to each other and stopped to chat.

The appeal of Ancon is so great that it is increasingly difficult to find inexpensive or even reasonable property prices. And the area is so popular that there seems to be less property available here than everywhere else in the city, despite the construction boom that is driving real estate in Panama today.

Only insiders seem to be able to find the remaining bargain or high-value properties. How do they do it? You must be very diligent in checking the few truly good sources for “reverted area” property. One such source is the government. If you know where to look and how to participate, a government auction (and some street-wise tips on how to bid) can save you $100,000 or more in an area where property for less than $200,000 is scarce.

For example, both sides of a duplex on a quarter-acre lot were auctioned last month with a total starting price of $143,700. The buyer won with a bid of just $229,000…he bought two homes in one of Panama City’s best areas for less than $115,000 each. We estimate that, on the resale market, these homes could sell for more than $150,000 each…without renovations. The buyer will likely follow in the footsteps of others who have bought here and spend some time renovating, so he can fetch a price of $200,000 or more for each home.

Once you've found a government property that's right for you, here's a basic run-down of what you'll need to do:

• You must request a pliego de cargo or a listing of the documentation you'll need and requirements you'll need to meet
• In addition to meeting all requirements as listed on the pliego (you do not have to be a resident or citizen to apply), you must "pre-qualify" by putting down 10% of the property base price
• You and/or your representative must attend the auction. If you are the only bidder, the auction will carry on
• If you win, you are given five days to pay in full. Once you have paid, the title is transferred to you
• If you lose, your deposit is returned to you immediately after the auction.

Jessica Ramesch
The Panama Insider, International Living

P.S. Not sure how to get in on government auctions in Panama? We explained where to find listings and which government offices you'll need to visit (and gave you a few more tips on finding property in the highly coveted area of Ancon) in last month’s issue of Panama Insider, which includes a feature-length article on Ancon and a report on one of the hottest business opportunities in Panama today.

Editor’s note: Jessica will speaking at the Live and Invest in Panama seminar in Panama City, July 31–Aug. 2. She is looking forward to talking to you in person about Panama’s many real estate, lifestyle, and business opportunities…along with everything you’ll need to know before you make your Panama dreams come true. And remember…Panama Insider subscribers get special discounts on this and every International Living Panama event.

Read related articles:

- $40,000 Lots in Panama’s Best Mountain Location

- A Little-known Panamanian Law Could Save You Thousands

- The Return of Panama’s 20-Year Property Tax Exemption