Requesting a title search is the first step in buying panama real estate. It's is not mandatory but it is highly recommended to ensure that the property you want has clear title, and is free of any liens or liabilities. The cost for the title search is usually comprised in the legal fees between 1 and 3 percent of the total price of the property. It's worth to mention that these fees may vary depending on the attorney.
The Promise to Buy/Sell Agreement which translates to Promesa de Compra y Venta in Spanish is the next formal step to close on a property as well as a down payment required to be paid to the seller, which most of the times will be 10% of the property price but may vary from sale to sale.
Also included in the Buy Sell Agreement are any stipulations agreed upon by the Buyer and Seller. These stipulations may include such details as the amount of time needed by the buyer or seller to close on the property.
This agreement creates a legal document between both parties stating that the Seller promises to sell the property and the Buyer promises to buy the property. In case one of the parties back out of the transaction, they could face certain consequences.
The agreement usually stipulates that if the seller decided to cancel the transaction they would need to return the down payment in addition to an equal amount. For example, if you made a down payment of 10% the seller would be required by law to return 10% plus another 10% as penalty.
In many parts of the World, money is held in escrow to secure a property before actually paying the seller for it, and though the word "escrow" does not actually exist as a legal term in Panama, there are various attorneys who provide such a service locally. It should be stressed, however, that the down payment to the seller is a very important step in the process of securing real estate in Panama. Without having received any down payment, the seller has no legal obligation to hold a property before the actual close is made, and at any point can either change his mind, or opt for a better deal that may happen along, without any consequence.
In other words, if the seller received 0 down on a property and a better deal came along before the close takes place, by law they would be required to return the down payment of 0 plus an equal amount of 0, which totals 0.
Once the Promise to Buy and Sell Agreement is signed, and initial down payment made, the Seller must comply with a few obligations necessary to complete the transfer of the property from the seller to the buyer. These obligations include:
1. Payment of the 2% transfer tax which is assessed according to the negotiated sales price.
2. Payment of capital gains. This is 3% of the negotiated sales price.
3. Last but not least several paz y salvos, or certificates of good standing must be obtained. These include:
* Paz y Salvo for Property Taxes
* Paz y Salvo from IDAAN (water bill) Instituto de Acueductos y Alcantarillados Nacionales
* Letter of good standing indicating that the maintenance fees are paid to date, that is if the property being sold is part of a building or community with such fees
The time needed to transfer the property in Panama may take up to 30 days, but may vary depending on factors such as the complexity of the transaction and also the stipulations outlined in the Promise to Buy Sell Contract.
The Promise to Buy Sell agreement is elevated to a Buy Sell Contract when all the requirements for the transfer are completed, and then it needs to be signed and inscribed in the public registry of Panama. It takes approximately 10 business days for the new deed to be approved and released from the public registry.
The Promise to Buy/Sell Agreement which translates to Promesa de Compra y Venta in Spanish is the next formal step to close on a property as well as a down payment required to be paid to the seller, which most of the times will be 10% of the property price but may vary from sale to sale.
Also included in the Buy Sell Agreement are any stipulations agreed upon by the Buyer and Seller. These stipulations may include such details as the amount of time needed by the buyer or seller to close on the property.
This agreement creates a legal document between both parties stating that the Seller promises to sell the property and the Buyer promises to buy the property. In case one of the parties back out of the transaction, they could face certain consequences.
The agreement usually stipulates that if the seller decided to cancel the transaction they would need to return the down payment in addition to an equal amount. For example, if you made a down payment of 10% the seller would be required by law to return 10% plus another 10% as penalty.
In many parts of the World, money is held in escrow to secure a property before actually paying the seller for it, and though the word "escrow" does not actually exist as a legal term in Panama, there are various attorneys who provide such a service locally. It should be stressed, however, that the down payment to the seller is a very important step in the process of securing real estate in Panama. Without having received any down payment, the seller has no legal obligation to hold a property before the actual close is made, and at any point can either change his mind, or opt for a better deal that may happen along, without any consequence.
In other words, if the seller received 0 down on a property and a better deal came along before the close takes place, by law they would be required to return the down payment of 0 plus an equal amount of 0, which totals 0.
Once the Promise to Buy and Sell Agreement is signed, and initial down payment made, the Seller must comply with a few obligations necessary to complete the transfer of the property from the seller to the buyer. These obligations include:
1. Payment of the 2% transfer tax which is assessed according to the negotiated sales price.
2. Payment of capital gains. This is 3% of the negotiated sales price.
3. Last but not least several paz y salvos, or certificates of good standing must be obtained. These include:
* Paz y Salvo for Property Taxes
* Paz y Salvo from IDAAN (water bill) Instituto de Acueductos y Alcantarillados Nacionales
* Letter of good standing indicating that the maintenance fees are paid to date, that is if the property being sold is part of a building or community with such fees
The time needed to transfer the property in Panama may take up to 30 days, but may vary depending on factors such as the complexity of the transaction and also the stipulations outlined in the Promise to Buy Sell Contract.
The Promise to Buy Sell agreement is elevated to a Buy Sell Contract when all the requirements for the transfer are completed, and then it needs to be signed and inscribed in the public registry of Panama. It takes approximately 10 business days for the new deed to be approved and released from the public registry.
About the Author:
Looking to find the best deal on panama apartments, then visit www.panamarealtor.com to find a list of many panama condos in the city and the beach.
No comments:
Post a Comment