Foreclosure Properties in Panama: What you need to know

As we already know, Panama maintains an economic growth and it can be noticed in the real estate sector. The development of this sector has allowed improvements in offers of related services, such as banking and mortgage, offering loans with more flexibilities and attractive terms.

However, there are cases where people cannot meet the fees established by the bank, and during these situations, the financial entity (throughout a legal process) proceeds to repossess the property as a payment of the pending debt. In these instances, the bank puts in sale the real estate to obtain back the capital.

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Related article: Foreclosure Properties in Panama: 3 Points to Keep in Mind

Foreclosure properties are those which are in the banks inventory available for sale with the sole purpose of recovering their capital. It is not ideal for a bank to maintain a big inventory of these properties since they do not generate any returns, on the contrary, maintaining them costs money. For this reason, the banks immediately look for interested buyers, offering attractive rates, and discounts up to 30% (or more in specific cases).

In Panama, a lot of banks offer a list of foreclosure properties, since these can be purchased by any person with a good credit profile, or with the capacity to purchase them in cash.

Positives

The main benefit of purchasing a foreclosure property is that the prices overall can be substantially lower than actual market price, and the bank is willing to negotiate other terms with the goal of making a fast sale. Other important benefit is a fast purchase and occupation, since the buyer is negotiating directly with the bank.

Negatives

There are some negatives points in considering buying foreclosure estates, the most common one is that the property might need important repairs. In some cases, the bank also pressures to sell these properties under conditions not so favorable for the buyers, like market prices, or restricted financing options, hence its important to find a real estate specialists to make sure that are these details are taken in consideration during the purchase process.

Recommendations:

• Once you receive some offer from the bank, it is important to compare the property price with multiple similar alternatives in the same area or building, the goal is to have a good sense of the market price and find out if the price offered by the bank is competitive.
• The properties are offered as is, therefore, it is recommended to inspect all details of the property you are interested and prepare a budget in advance of all the improvements and repairs needed.
• If the bank offering the foreclosure property also offers financing, and the property requires repairs, the amount needed for these improvements can be negotiated with the financial institution to be included in the whole financing of the property.

Buying foreclosure properties can be a great investment alternative, but even if it looks attractive, the purchasing and negotiation process can become complex sometimes. We have years of experience and knowledge in the field, and in real estate overall, contact us if you are looking for a foreclosure property or if you need more information about properties in Panama.