Published by the CIPS Network of the National Association of REALTORS®
Third Quarter 2005
Finding the Mother Lode at the Panama Spectacular
By Terry Theodorou, CIPS, TRC
My husband, Kosta, and I have always been very international. He was born and raised abroad, has worked in several countries, and has visited many more; I lived in Europe for three and a half years. So, it seems natural that a nice portion of our business in South Orange County, California is with foreign nationals relocating or buying investment properties. We are well versed on the range of experience in these types of transactions, not just the way property is bought and sold, but the cultural nuances as well.
When we received an e-mail a few years back about becoming Certified International Property Specialists, our response was, “Where do we sign up?” As a result of the globalization of world economies and the technological age in which we live, properties all over the world are immediately available on the Internet. But, where does one start when the world is at your fingertips? This is the question we asked our mentors—teacher extraordinaire Carmela Ma, CCIM, CIPS, and Yolanda Velasco, CIPS, CRP, CRS, GRI, founding member and President of CIPS Association of Greater California. They recommended that we begin where we already had contacts and then consider where we would like to travel to or live one day.
Kosta and I are proponents of ecotourism, and we like tropical climates. We wanted a country that had a stable political climate offering easy repatriation of funds, plus a good quality of life with some of the creature comforts to which we are accustomed: high speed Internet access, our favorite TV shows, good medical facilities, shopping, and entertainment. Finally, we sought a place where English was a second language, and one that wasn't too far from home. We started to keep an eye on Panama, located on an isthmus—a land bridge connecting South America and Central America. It is probably best known for the Panama Canal, often referred to as the eighth great wonder of the world, built 102 years ago by the U.S. It has an easy flow of currency. The U.S. dollar is accepted everywhere. Having hosted the Americans who ran the Panama Canal until 2000, it also had the infrastructure that we were seeking.
Now came the next big step—making contacts in Panama. As CIPS, we received an invitation from former Ambassador Juan Sosa to the Panama Spectacular 2005. This annual event hosted by the U.S.-Panama Business Council promotes real estate investment between the U.S. and Panama. Before our trip, one of our biggest concerns was how, after we made the trip and found the contacts, we could be assured of getting paid for any business we transacted.
The advent of ICREA's Transnational Referral Certification (TRC), a perfect fit with our CIPS designation, was the answer to our concerns. As a TRC, if you send a referral overseas via the Transnational Referral Contract designed by the International Consortium of Real Estate Associations, and the agent on the other end somehow forgets to pay you, you have the right to a review by an ICREA arbitrator. There are guidelines and a process in place to enforce the agreed upon payment. There are penalties and serious consequences for not complying with the findings of the arbitrator. This gave us the confidence we needed to really put together a plan, and go for it.
My first call was to Yolanda Velasco, a tireless force of energy dedicated to the promotion of the CIPS of California worldwide. She suggested that we be prepared to ask for an exclusive contract. First, I sat down, considered what we wanted to accomplish on this trip, and drew up a business plan.
Then, we began to establish a reputable network of professionals around us—a lawyer, a title company, a developer/builder, and a real estate agent who worked with them. The lawyer we chose came highly recommended by the U.S.-Panama Business Council, and is greatly respected in the country. He actually wrote the book that interprets condominium law in Panama. We met and networked with the very first licensed real estate agent in Panama—whose license number is 0001—and many other reputable agents who adhere to a Code of Ethics like our own. We researched ways to hold title, ways to obtain a residency visa, and ways to retire to Panama for U.S. baby boomers with an eye on the international horizon.
Finally, Kosta and I reviewed our plan and decided that, for the portion of our trip where we would actually go out and visit properties, we would split up to cover as much ground as possible. This turned out to be great decision, because Kosta found a project he truly believed in.
The PanCanal View project is a luxury gated condominium complex of three 35-story towers where you can "Be a witness to history from your own home" when the highly anticipated expansion of the Panama Canal takes place. The expansion of the Panama Canal is up for a national referendum and will be decided by the end of this year. The polls show the project has 65 to 70 percent approval from Panamanians.
When Kosta introduced me to the developer, my first question was, "Can we get the Exclusive Right to Sell your project in California in the U.S.?" He said yes, we shook on it, and went on to discuss the terms of the agreement. Then, he took us on a tour of the project site and the surrounding areas. We were thrilled with the location and the potential it offered.
We continued finalizing the terms of our agreement for ten days after we returned to the U.S. It wasn't easy as our developer was in Dubai at that time, and there was a ten-hour time difference. We'd awake at midnight to work with our developer via telephone and fax to Dubai. Finally we were rewarded with an agreement everyone could live with. It provided compensation for his Project Manager who is the developer's real estate agent in Panama, and for our subagents here in the U.S. And, it gave us the Exclusive Right to Sell all properties in the PanCanal View project in the U.S.
After we secured our Exclusive Right to Sell in the U.S., the real work began, marketing the project and getting it sold. We decided to host a Panama Living Seminar in Irvine, California. We had five weeks to get the first one together and we sold 50 percent of the junior penthouses located in phase one—approximately US$3.6 million worth of real estate—in four hours. Last week, Ambassador Sosa introduced me to someone as "the American REALTOR® who has sold more real estate in Panama than anyone else in the U.S." Currently, we have new buyers, who either couldn't make it to our seminar or who wanted a more personal experience, coming in daily to reserve their piece of paradise.
Terry Theodorou, CIPS, TRC, is a Real Estate Broker and Vice-President and co-founder of KT Homes and Loans, Mission Viejo, California, of which Buy A Home In Panama is a division. For more information on this project, visit www.buyahomeinpanama.com. You can reach Terry at +1.949.455.7000 or at terry.theodorou@sbcglobal.net.
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