Panama's real estate boom brings thousands of foreigners looking to invest, live and retire in this beautiful country. Every Panamanian knows someone selling properties.

One gets the impression that everyone is profiting from the numerous real estate sales and investment opportunities.

Real estate agents are popping up everywhere to take advantage of this boom. It seems every tour guide, taxi cab driver, bartender, hotel worker, and barber is now a part-time real estate agent, and there is no M.L.S. (Multiple Lishing Service).

So Beware: Buyers can fall victims to swindles, frauds, forgeries, and malpractice committed by some so called "real estate agents".

So what should you look out for?

Panama's real estate broker's law defines a real estate agent as one who habitually and professionally operates as a mediator, intermediary, agent, or representative in real estate transactions. A commission is a payment to one who extends the above-mentioned services between a property owner and third parties. The law excludes people who work as promoters, administrators, rent collectors and maintenance providers who work under a licensed real estate broker.

A real estate agent is an intermediary in a transaction earning a commission for bringing a buyer and a seller together for the disposal of real estate. Every Panama real estate agent must be licensed. This requires studying applicable laws and regulations, and passing a written examination, to receive a license by the government to represent property sellers or buyers for a commission.

Licensed real estate agents must carry a card identifying them as such. Many people claiming to be real estate agents in Panama are not licensed.

This is where the danger lies. When someone shows you properties, you always ask questions about the property's features, purchasing process, financing, and real estate laws. An unlicensed "real estate agent" will not have taken the hours of courses, read the books on the real estate laws & regulations, nor passed a written test. You need to ask, "Are you licensed?" Most of the time you will be told "No".

One of the many new high rise apartment buildings in Panama City

Instead of calling someone hired to show properties a "real estate agent"; they are called "consultants", "representatives", "promoters", "property showers", or even "negotiators". They are paid a salary or fee instead of a percentage commission. Their paychecks will say something like "marketing" or "professional services". Because they work for a licensed real estate broker, the law exempts them. Sellers can sell their own properties without a license. Developers can also hire people to sell their own projects without a license.

To become a licensed real estate agent you must:

1. Take courses and pass a written exam administered by the Ministry of Industry & Commerce.
2. Obtain a $10,000 bond to cover malpractice claims.
3. Obtain a Power of Attorney presented by an attorney to a notary public.
4. Pay Fiscal Stamps (Timbres Fiscales) annually of $25.
5. You must be either a Panamanian national or a foreigner with 5 years residency.
6. Obtain a Police record showing you never committed a felony against the nation, public faith, justice, or honor (whatever that means).

Under the law, an agent should act in good faith when dealing with their clients (buyers and or sellers), and inform them of all factors that affect the property as it relates to Sales, Contracts, Zoning, Financing, etc. Agents must make sure they complete their activities within a practical time and do so in a professional manner. They should avoid all illegal practices in relation to buyers, sellers, other colleagues, and third parties. This includes avoiding: Fraud, False Representations, Misleading Advertising, Exaggerations, and Malicious Practices - that can damage the public and the image of the profession. Agents cannot offer or market a property without previous authority to do so. Agents must maintain strict confidentiality of all information provided by clients.

What, No MLS?

Another problem with Panama's real estate industry is no Multiple Listing Service (MLS) exists. A MLS allows real estate offices to share their exclusive listings with other offices and split the total sales commissions with the agents who bring buyers. What we have here is an "every man for himself" type of non-exclusive listings. There are hundreds of real estate offices in Panama all competing against each other for an open listing where "the first come with a deposit and a Promise to Purchase Contract wins all" commission system. Thus, with no incentive for professional cooperation, it truly is every man or woman for him or herself. In spite of this bigger shark eats littler one system; there are some real estate offices cooperating and sharing listings with others. However, these are just a few small pockets. Therefore, when you visit different real estate offices you will see many of the same properties and condominium projects for sale. Sometimes the prices will be different because some sellers only offer a "net" listing where the seller gets a set price and the agent is free to add whatever commission desired on top. Thus, you can find the same property for less at a different real estate office.