How to sell Property in Panama
Pricing property in Panama
A price ought to be based on the typical market value for comparable properties and also the price a customer would be willing to pay. The vendor is supposed to select his value based on a thorough market research as well as the demand for similar properties in Panama.
One issue sellers typically get confused about is the price. Some assume the selling price for a property is directly linked to their purchase price of the property, or how much they'd wish to receive as a profit, or perhaps how much they assume it is worth.
The real estate market sets the value. The consumers set the value. The seller, alongside a competent land agent will confirm the important market price of the property and establish a competitive price, so avoiding the common property evaluation mistakes.
Once the price is set, a promoting strategy should be selected. Promoting a property takes time and cash, which is why many times the owner decides to list the property for sale with a real estate agent. Real estate corporations in Panama do need to be authorized and guaranteed. The realtor has agents with specific information regarding the kind of property being sold, furthermore the correct channels and promoting strategy to supply most exposure of the property to the real estate buying market.
Real Estate Listings are either exclusive or non exclusive and each type has its pros and cons as will be mentioned below. The secret is to understand the market: Find out how much consumers are paying for similar properties and price your property consequently. In today's modern era buyers are well informed; it's quite unlikely you'll find someone that's willing to pay double or triple the market price for a property, due to being ignorant about the market.
Exclusive realty listing in Panama
For the vendor, having an exclusive listing agreement with a good property company typically is a good idea, because the realtor will take a lot of effort and devote a lot of marketing funds into promoting and selling the property. An exclusive listing will be marketed by your real estate agent through in house promoting campaigns targeted to other realty professionals within the business. Most realtors in Panama are collaborating with other realtors and the sales commissions get split.
With an exclusive listing it's usually better to offer 6% commission, giving each cooperating party 3% commission, which incentivizes all realtors to make a greater effort to sell the property at top price. Having an exclusive property agreement will give you one realtor that handles all of your queries and in addition sorts out the viability and integrity of the offers and the alternative realtors representing your listing. The vendor should confirm regularly that their exclusive listing realtor is collaborating with other realtors and is willing to split commissions as necessary to sell the property.
There are some realtors in Panama that oppose working together with outside real estate agents and having an exclusive listing with them is usually a bad plan because it can reduce the exposure of their property notably. However the seller has to price the property right, in order for it to be interesting enough so that a realtor is willing to take the exclusive listing. The skilled realtors in Panama will do research to guide you in pricing the property.
Non-Exclusive property listing in Panama
A Non-Exclusive property listing means the vendor will list with several realtors. This can be a decent choice for a seller who is willing to put time and energy into the management and promotion of the listing, aspiring to list with the best fifty realtors in Panama and to maintain all those realtors always updated. This kind of property listing offers the vendor flexibility and exposure through many realtors. Nonetheless, with thousands of realtors in Panama, this might prove tedious and might not yield the desired results unless you, the seller, have a good promoting plan which includes email campaigns, electronic brochures and a good prospect base.
With Non-Exclusive agreements, realtors assume the vendor has it listed with various realtors, therefore there are very few motives to spend time and cash promoting to other realtors which will already have the listing directly with the proprietor. If you're willing to assure your property is being listed with the best fifty realtors in Panama and to keep all of them always updated, then this option could give you good results. However many times you're better off giving the listing to one prime real estate agent that works with a network of various realtors and allow them to do the work of promoting your property.
Realty Commissions in Panama
The standard property commission in Panama is five percent of the gross value and as much as 10% within the rural area, depending on location and price of the listing.
Real estate commissions in Panama are usually due once the purchase/sell agreement is signed and also the buyer makes the non-refundable 10% deposit.
In Panama the purpose of the non-refundable 10% deposit is to cover the seller's transfer expenses as well as the real estate commission. The aspect, that the initial 10% payment is completely non-refundable, greatly reduces the quantity of offers that are withdrawn at the end in the Panama property market and protects the vendor from loss if the deal is not closed.
Commissions for farm or country properties are many times 10% of the gross selling price because of the higher costs of managing and showing those remotely located properties.
One mostly doesn't negotiate commissions and it's often a bad plan for the seller if they really need to sell the property. It's simple: most vendors pay 5%, therefore the motivation level for any real estate agent to work for less money unsurprisingly isn't really high. The simplest way for the owner to sell their property is rather to promise more commission or a performance bonus.
In some cases, if the vendor is willing to discount the property's price so that it's twenty percent below market in order to encourage a quick sale, then it could be an option to ask for a reduction of the commission since it therefore becomes a way easier sale for the realtor in terms of price issues.
For example:
If you have a $200,000 property this means reducing the original price by $40,000 (20%) in order to save one percent ($2,000) on the commission. Mathematically this is often not a financially wise alternative for the seller.
(Note: for a purchaser hiring a Buyer's Agent in Panama can be a great help to find these properties which have reduced commissions that have often been on the market for quite a long time with poor promoting and may therefore be purchased at reduced costs from anxious sellers).
Generally a seller will obtain more net benefit from the sale providing commission bonuses like for example: a 6% commission for an acquisition if the selling price is within a five percent range of the asking price, and a five percent commission for any accepted quotation of five percent below the asking price or an additional bonus from receiving a sales agreement within four months for a fast sale. This offers an incentive to the real estate agent to sell the property and receive high price for it. As long as the price is aligned with the market value these incentives are able to help a property sell quicker and for a higher price and give better total net return to the owner.
Offering the six percent incentive is in particular effective with exclusive listings since the realtors promoting the property doubtlessly collaborate with other realtors and this offers them to opportunity to make the property a more attention-grabbing choice to other realtors.
Among Real Estate Professionals it is known that it's usually way more profitable to pay the entire commission with an additional incentive so as to optimize the agent's dedication to market and expose the property for sale in Panama.
