9 Risks of Buying Property in Panama

A photo of old casco viejo antiguo in Panama City. It shows a large property on a wide calm bay, with an orange roof and white walls. One building is on stills and sits on the beach

Investing in real estate is an excellent way to earn passive income. A lot of investors assume purchasing real estate in a place like Panama is a no-brainer. 

Panama is also an ideal destination for retirees or folks who want to live at a vacation spot as part of their everyday lives. Buying property in Panama can look like a great choice at first — but as they say, not all that glitters is gold.

There are various risks of buying property in Panama. A seller can find themselves pressured to buy quickly, overpay, spend too much time on the buying process, buying the wrong property, have issues surrounding ownership, or get conned out of extra money. 

These risks do not mean buying property in Panama is impossible or a bad financial choice. Knowing the risks will keep you aware and help you continue with the buying process safely. 

If you are determined to make your real estate investment in Panama, keep reading to learn about each risk. We will cover ways that you can prevent any of these misfortunate events from happening to you. 

1. Pressured to Buy Quickly 

Registered or unlicensed real estate agents, taxi drivers, and hotel owners often try to persuade new visitors to buy land in Panama. They will even attempt to rush the buyer through the process by making them believe that there’s no time to conduct a background check on the house. 

These persuaders will convince you that it is a good investment without knowing your finances or having experience in the real estate market. Their main goal is to get you to act fast and make that purchase. Why? 

These people are known as “finders” in the Panama real estate world. A buyer purchasing land is more beneficial to them financially than it is for you, the buyer. Finders will even try their skills of persuasion on those who frequently visit Panama. Since the tourist has visited Panama multiple times, they will feel more familiar with the area, making them feel comfortable making a rash investment. 

2. Overpaying 

When most people hear of the issues with Panama real estate, they opt for doing the process on their own without a real estate agent. This tactic is a major mistake because it guarantees that brokers and others will take advantage of you. 

Following this path means that you will definitely overpay for the listing price on the property, and you won’t know until you have finalized everything. One way you can avoid this is by hiring a real estate agent that’s credible and trustworthy. 

A certified and credible agent knows the property’s worth, developers, and scales of construction. This knowledge can help them further aid you in the negotiation process and keep track of what’s reasonable and not. 

3. Too Time Consuming 

Developers, real estate officials in government, and brokers in the Panama area have an immeasurable amount of work and paperwork to do. Their workload can prolong the buying and can really eat up your time. 

If you can find a credible real estate agent, then this process, of course, is much easier. As expressed before, a seasoned agent knows the Panama market and can use their expertise to expedite the buying process. 

Although they can make it easier, there still is no average timeline. It all depends on how quickly things can be processed and signed over. 

4. Issues with Ownership 

A photo of a person's hand holding a set of house keys, symbolizing property ownership

A common risk of buying property in Panama is complications with ownership. This circumstance most likely occurs when siblings inherit the home after their parent’s passing. If one of the children decides to sell the house, and the others are unaware, it can cause issues. 

Under Panama laws, all children have ownership of the home if the owner did not have a formal will, which means that a buyer will need to obtain consent from everyone before purchasing the home.  This situation can be disheartening for most, especially if you found a home that you love.

To avoid this issue entirely, hire a real estate agent, and you both can ensure the proclaimed owner is the only one and has the paperwork to prove it. 

5. Cons and Scams

With Panama being a vacation destination, there are tons of real estate agents within the market looking to sell houses. It is also important to note that there are no legal provisions for full disclosure in property transactions in Panama, and any code of ethics does not bind real estate agents.

A buyer needs to find a real estate agent in  Panama with loads of experience and diverse work history. These real estate agents are ideal for you and help you navigate the Panama house market without the risk of being conned. 

Many buyers from the past suggested finding an expat to purchase from. An expat is a person who lives in a country outside their native one. This option means that your sellers are European or American who have lived there for many years. 

6. Buying the Wrong Property 

Panama is forever growing and evolving due to its tourism and thriving economy. It is imperative to keep this in mind while looking for property there. As you look at properties, consider and figure out the history and future plans for that property and its surroundings. 

This factor is essential because real estate agents may sell you the home due to its magnificent view of the beach or that the house is near the shoreline, but in reality, those things can change quickly. With the cities growing and new construction sites, there’s no guarantee that your view will stay the same. 

Not to mention that the construction noises make squander your dream of a new, tranquil home in Panama. To prevent this issue, remain knowledgeable on the zoning and speak with your agent about this more in-depth. 

7. Corruption

An image showing the torsos of two men in business suits who are shaking hands. As they shake hands, one man is skipping money into the pocket of the other, symbolizing corruption

As expressed before, there is no code or rule book for real estate agents in Panama. This problem means a real estate agent can earn 30 percent, 50 percent, or even 300 percent of a property’s sale price, whether licensed or unlicensed. 

That’s right. Agents can hike up their commission to 300 percent without you, as the buyer, even knowing. How can they do this? The agent buys the property at the seller’s asking price and sells you to you at a much higher price. 

For these reasons, a buyer should be wary of real agents or brokers that eagerly want to work with them. These unethical real estate agents want to work with foreigners and retirees because they are less aware of how the market works in Panama. 

Related: Reasons Not to Live in Panama

8. Breach Of Contract 

As mentioned before, Panama and it’s cities are growing rather swiftly. As a result, the real estate sector has developed to become a significant part of the economy. 

There have also been many buyers citing issues regarding a breach in contract or other misdealings. Purchasers have filed lawsuits against promoters for breach of contract, recovery of advance fees, breach of warranties and latent defects, and delivery delays.

The good news is that buyers can negotiate any provision in their contract and take payment security steps.

9. Missing Out 

Since you’re purchasing land from a country you are not native to, there are few things that you will not know inherently. For instance, there may be a few better potential properties for you to look at that you would not know even existed. Your real estate agent comes in here and should be very beneficial to you in this area. 

If you don’t, you’ll only see a fraction of what’s actually on the market if you rely solely on what you can find on real estate websites, and you won’t have the inside scoop on what is and isn’t a good offer.

Related: Costa Rica vs Panama Retirement


Investing in real estate may seem like a great idea at first, especially if you are buying it in a vacation spot, like Panama, but there are a few things to consider first. There are several risks of purchasing property in Panama. This information is not to deter you, but to remind you to be more discerning about who you do business with. 

Things to look out for are pressures to purchase quickly, overpaying, wasting your time, ownership issues, buying the wrong property, getting conned, breach of contract, and the lack of an ethical code among real estate agents in Panama. 

Knowing all of these risks of buying property in Panama will reduce your chances of falling victim to these problems yourself. The biggest takeaway here is to know that you do not have to do it all alone. 

Buyers should hire credible real estate agents to help them navigate the market space in Panama. Agents also prevent you from falling into any pitfalls that come with investing in real estate in Panama. 

Here’s the  general rule: as a buyer, you should take your time and ensure that you know everything about your potential property and remain in the know.

Related: Best Neighborhoods to Live in Panama