24 | November | 2013 | Chapter 3: Loving Retirement in Panama

Over my life, I have bought and sold more homes than you can count on both hands. I’ve purchased new and watched it being built, I’ve purchased old and stripped it down to studs and rebuilt, I’ve purchased everything in between. That is to say, I am not a novice at home buying.

We have been visiting Boquete for three years and, during almost every visit, we have looked at homes and property. I’ve been watching the real estate websites and know what has been on the market for years, what will continue to stay on the market and how prices have fluctuated. Many times I also know the actual selling price. Since Panama does not have an MLS or accurate property sales records, this is very important.

Another issue is that many people want to get back the money they put into their property. Their problem is that they bought at the top of the market. I would have liked to sell my house in Florida for the “value” it had in 2006. Unfortunately, it’s 2013. I sold at 2013 prices but there are many, many hold-outs in Panama still waiting for 2006 to return. One man actually told me last year that he wanted what he bought his lot for in 2007. It is still for sale. A nearby lot finally sold after dropping their price by nearly 40%.

Without MLS or comparable sales information, prices of property are based on what the owner thinks it is worth. So you can have a crummy house on a crummy street that is listed for an unrealistic price. You will also see houses with an incredibly high price sitting on the market for many years. This is not an actual seller. They are just waiting for some unsuspecting gringo to visit Boquete for 3 days and buy a house based on hype and incorrect information. Unless you’ve been in town a while, you have no idea how long a property has been on the market. If the owners change the price by even $1, the house goes to the top of the listings as if it was new on the market. When their contract expires and they re-list, they also go back to the top.

We have seen numerous properties in the last 3 years. We’ve put in offers on 2 – both unsuccessful. The first was over a year ago. It was about a 1/2 acre lot in Las Estancia. We loved the neighborhood, the view, the climate, everything. We worked out a deal with the owner who was living in Thailand. He even interviewed us on the phone to make sure we would be “good neighbors”. That should have been a huge red flag but his intent was to sell all of the property and be out of Panama for good and never our neighbor. We were actually on the way to the bank to send a wire transfer when the owner decided to jack up the price (again). Apparently this is what he does and is the reason that not a single piece of his property has sold in the three years he has owned it. It was disappointing. His agent recently contacted us again and stated that the seller was now “very interested” in selling. This time we took a pass from all of his aggravation and shenanigans. And his property continues to sit = unsold.

The next offer was just a few weeks ago. It’s a large house that needs a lot of work. Most people would find that too difficult but we actually enjoy it. We planned to take this large, very disjointed house and turn it into a 3 bedroom, 3 bath with a new kitchen and open patio. It was doable. We put in what we thought was a very fair offer considering the amount of work needed to make it a home. We used one of the largest real estate offices in Boquete. The owner of the realty office thought our offer was too low and, I imagine, told the owner to reject it. The owner rejected it.

Fast forward about six weeks. We learned that they are building a skating rink and a strip mall adjacent to the house within the next few months. We also found that the owner of our realty company knew about this and neglected to tell us. His response to when we told him that we knew was, “I guess you’re glad he rejected your offer”. Another thing that Panama does not have is full disclosure. Honesty and ethics would be nice but are not necessarily used in the business world of real estate.

So we have to make a few decisions. Maybe we will rent forever, which is not a bad thing. We could use a different realtor but we have seen unethical practices at other offices as well. We can try to buy directly from owners but that limits our choices. We will probably just wait and just see what happens. Often things happen for a reason and we are in no hurry.