The Promise to Purchase: What to Negotiate Before You’re Committed

The Promesa de Compraventa — the Promise to Purchase — is the moment in a Panama property transaction where the stakes become real. Before it, you are researching and negotiating. After it, you have paid a deposit that is typically non-refundable if you walk away without a contractual basis for doing so. It is also a private contract, negotiated between the parties, written in Spanish, and not standardized in the way US purchase agreements tend to be. What goes into it — and what you negotiate before you sign — determines how protected you are if the title search turns up a lien, the seller gets a better offer, the inspection reveals problems, or the bank appraises the property below the agreed price. We have not signed a Promesa ourselves yet. What we can tell you is everything we have learned about what should be in it before you do.

Buying Property in Panama: The Complete Expat Guide

Ten articles covering everything from the rent-vs.-buy decision through closing day and beyond — including the specific issues that affect gay couples that most guides completely ignore.

1. What to Think About Before You Think About Properties
2. What Are You Actually Buying? Titled Property, ROP, Concessions Explained
3. Finding a Real Estate Agent — and How to Tell If They're Working for You
4. What Sellers Don't Have to Tell You: Flooding, Zoning & Hazards
5. The Promise to Purchase: What to Negotiate Before You're Committed You are here
6. Due Diligence: Title, HOA Health & the Inspection Nobody Does
7. Closing: Costs, Taxes, the Public Registry & What Happens on Day One
8. Corporate vs. Personal Ownership: When a Panama Corporation or Foundation Makes Sense
9. Managing Property from Abroad: Rentals, Property Managers & the 45-Day Rule
10. Buying Property as a Gay Couple: Title Structure, Legal Documents & What Marriage Doesn't Protect Here

What the Promesa Actually Is — and Isn’t

The Promesa de Compraventa is a private bilateral contract between buyer and seller that formalizes the agreed terms of a property sale before the final deed transfer. Notarization as a public deed happens later, at the escritura — the final public deed of sale. The Promesa itself does not have to be a public deed, and it is not automatically recorded anywhere.

It can, however, be registered in the Public Registry if the parties choose to do so. Panamanian firms note that registration is not mandatory but does confer additional protection — it puts third parties on notice of your contractual interest in the property. This is worth asking your attorney about, particularly on a longer closing timeline or where you have reason to be concerned the seller may entertain other offers.

Because it is a private contract, its terms are almost entirely negotiable. There is no standard form. A Promesa drafted by the seller’s attorney will be written to protect the seller. A Promesa drafted by your attorney will be written to protect you. In many transactions, both attorneys negotiate the language before either party signs. This is the right approach, and it is why insisting on your own independent attorney — not one recommended by the agent or shared with the seller — is not optional.

The Promesa is also where the transaction becomes legally binding. A verbal acceptance from a seller means nothing. An email exchange does not substitute for a signed contract. Until both parties have signed the Promesa and the deposit has been paid, the seller is free to accept any other offer. This creates a tension: you want to move quickly enough to secure the property, but not so quickly that you sign before your attorney has reviewed the terms. The answer to that tension is having your attorney on standby before you make an offer, so the document can be reviewed and negotiated without unnecessary delay.

The Deposit: What’s Standard, What’s Negotiable, and Where the Money Goes

The standard deposit in a Panama resale transaction is 10% of the agreed purchase price. The range in practice is 5–30% — smaller deposits may be possible with a motivated seller who trusts the buyer’s ability to close, while new construction pre-sales and developer transactions sometimes require higher staged payments. For resale properties, 10% is the number most buyers and sellers expect.

Where that money goes is one of the most important and least-discussed aspects of the Promesa. In the United States, earnest money is typically held in escrow by a neutral third party — a title company or escrow agent — until closing. In Panama, the deposit is commonly released directly to the seller at the time of signing. The seller may genuinely need those funds to pay off a mortgage, clear unpaid property taxes, or settle utility arrears before the title can be transferred — all of which are required before closing. But it also means that once the deposit is paid directly to the seller, recovering it if the deal falls apart requires legal action against the seller personally, not a simple release from an escrow account.

Deposit forfeiture: the default rules and how to negotiate them

Panama’s Civil Code establishes baseline consequences for breach of a Promesa through the doctrine of arras (earnest money). If the buyer walks away without a contractual basis for doing so, the deposit is forfeited to the seller. If the seller backs out — accepting a better offer from another buyer, for example — they must return the deposit plus an equal penalty amount. In practice this means the seller pays back double: the original deposit returned, plus the same amount again as damages. This doctrine is real and has been litigated in Panama’s Supreme Court, with buyers successfully arguing for the doubled return where a seller breached.

That said, the default rule has real limitations. Getting that penalty payment out of a seller who has already spent the original deposit requires legal proceedings. The contract can modify these defaults — the parties can agree to different penalty structures, graduated forfeitures, or specific performance obligations — and that negotiation belongs in the Promesa itself. Panamanian practitioners advise that the Promesa should set out clear consequences for breach: loss or return of arras, proportionate penalties, and the right to demand performance or terminate the contract, all in unambiguous language.

The Clauses That Protect You — and the Ones That Don’t Exist By Default

This is the heart of why the Promesa matters so much and why it needs to be drafted or at minimum reviewed by your attorney before you sign. Several protections that US buyers take for granted either do not exist in Panama’s standard practice or must be explicitly negotiated into the contract. Assuming they are there because they feel standard is how buyers lose deposits.

The due diligence contingency — your most important protection

A due diligence contingency is a clause that allows the buyer to withdraw from the contract and recover their deposit if the title search, property inspection, or other due diligence reveals material problems within a specified period. This is the clause that makes the deposit recoverable if your attorney finds a lien on the title, if the survey reveals the boundary is in the wrong place, or if the inspection uncovers structural problems that the seller either cannot or will not remedy.

A well-drafted due diligence contingency specifies: what triggers the right to withdraw (title defects, specific inspection findings, HOA financial problems, unpaid taxes above a threshold); the period within which the buyer must conduct due diligence and notify the seller of any issues; what the seller’s obligation is if a covered problem is identified (cure it, reduce the price, or release the buyer); and what happens to the deposit if the buyer legitimately exercises the contingency. Negotiate this clause carefully. A due diligence period of two to three weeks is standard. Panamanian practitioners stress that deadlines in a Promesa should be concrete dates or measurable terms — not “in the coming weeks” or “when the bank responds.”

Specific performance — the clause most buyers don’t know to ask for

Here is something that surprises almost every US buyer: even after a Promesa is signed and a deposit has been paid, many standard Panamanian Promesas contain a clause that allows the seller to accept other offers. The seller’s obligation if they exercise this option is to return double the deposit — but the buyer cannot compel the seller to go through with the original sale.

The protection against this is a specific performance clause — a contractual provision stating that the seller is obligated to complete the sale on the agreed terms and cannot simply buy their way out by returning the deposit penalty. Panamanian legal guidance treats the right to demand performance (exigir el cumplimiento) as one of the consequences a well-drafted Promesa should specify explicitly, alongside the penalty structure. If the seller refuses to close despite such a clause, the buyer can seek court enforcement of the contract. These clauses require the seller’s agreement and are sometimes resisted, but they are entirely legitimate and your attorney should request one as a matter of course. Without it, a seller who receives a better offer after signing your Promesa can walk away by paying the double-deposit penalty — and if the market has moved significantly, that penalty may be a worthwhile cost to them.

The financing contingency — which is not standard in Panama

In the US, a financing contingency allows a buyer to withdraw from a contract and recover their deposit if they cannot secure a mortgage on acceptable terms — or if the bank’s appraisal comes in below the agreed purchase price. In Panama, financing contingencies are not standard practice and many sellers will not agree to them, particularly in a competitive situation or when the seller has other interested buyers.

They are, however, entirely available to negotiate. Panamanian firms are explicit on this point: arras can be made returnable if bank financing is not approved, but it has to be written into the contract, with defined timelines and evidence requirements for the loan application, so that it doesn’t come down to interpretation later.

The consequence if you skip it catches foreign buyers off guard: if you are financing part of the purchase and the bank’s appraisal comes in below the agreed price, you are expected to make up the difference out of pocket and close — or forfeit your deposit. The bank is not going to lend you more than the appraised value. If you cannot bridge the gap, you lose the deposit. This is not a hypothetical risk in a market where asking prices routinely start well above realistic sale values and bank appraisals may be more conservative than the negotiated price.

What’s included in the sale — línea blanca and everything else

Kitchen appliances in Panama are referred to as línea blanca — “white goods” — and they are frequently not included in a property sale unless specifically listed in the contract. The same applies to light fixtures, mirrors, water heaters, air conditioning units (particularly window units rather than built-in mini splits), curtains, and built-in furniture. What you see in the photos and during the showing may not be what you find when you take possession.

The Promesa should list every item you expect to be included — by category and, for high-value items, by make and model if possible. This is not paranoia; it is standard contract practice. A seller who agrees verbally that “everything stays” has made no legally enforceable commitment unless it is in writing. Your attorney should include an inventory clause or a schedule of included items as part of the Promesa.

Closing timeline and extensions

The Promesa establishes the timeline for closing — the date by which both parties commit to completing the escritura and title transfer. Typical timelines run 30–60 days from signing. The contract should also specify what happens if closing is delayed: what notice is required, whether extensions are automatic or require mutual consent, whether a delayed closing triggers any penalties, and what constitutes a material breach that allows either party to exit.

Delays happen in Panama transactions. Sellers need time to obtain their paz y salvo (tax clearance certificate from the DGI), which confirms all property taxes are paid and is required before any title can transfer. Unpaid taxes, pending liens, or bureaucratic processing times at the Public Registry can all extend the timeline. The Promesa should accommodate reasonable delays without penalizing either party for circumstances outside their control, while still giving both parties a clear exit point if the process drags on unreasonably.

What Due Diligence Should Happen Before — Not After — You Sign

Here is a sequencing point that many guides get wrong: the ideal order is to complete at least a preliminary title search before signing the Promesa and paying the deposit, not after. In practice, the time pressure created by the seller’s freedom to keep showing the property pushes many buyers to sign quickly and rely on the due diligence contingency as their protection if problems emerge. That is a workable approach — and one many experienced buyers use — but it does mean your deposit is at risk during the contingency period if problems arise and the deposit is already in the seller’s hands rather than escrow.

The ideal sequence is that due diligence — title search, tax clearance verification, and review of any municipal approvals — is completed before the Promesa is signed, with the Promesa then serving to formalize the agreed terms of a transaction that has already been verified as clean. In practice this requires a motivated seller willing to hold the property off the market without a deposit while due diligence runs, which is not always achievable. But it is the target to negotiate toward, and your attorney can advise on what is realistic for the specific property and seller.

The Full Checklist: What Your Promesa Should Address

Your attorney will draft or review the Promesa. This checklist is for your own reference so you can have an informed conversation about whether each item is covered before you sign.

• Property identification. The exact finca number, legal description, and cadastral reference. If the property is in a corporation, the corporate name, registration number, and what is being transferred (shares or the property itself).
• Agreed purchase price and payment structure. The total price, the deposit amount, when and how subsequent payments are made, and the final balance due at closing.
• Where the deposit is held. Seller directly, seller’s attorney as escrow, your attorney as escrow, or a formal escrow service. Get clarity in writing, not just a verbal assurance.
• Due diligence contingency. The period, what triggers the buyer’s right to withdraw, and that the deposit is returned in full if the contingency is legitimately exercised.
• Specific performance clause. The seller’s obligation to complete the sale — not merely to return the double-deposit penalty — if they attempt to withdraw.
• Financing contingency (if applicable). The conditions under which the buyer can exit without deposit forfeiture if financing fails or the appraisal comes in below the agreed price, with defined timelines and evidence requirements.
• Included items. An explicit inventory of what stays with the property — appliances, fixtures, A/C units, water heater, built-ins, furniture if applicable.
• Seller’s obligations before closing. Payment of all outstanding property taxes (and delivery of the paz y salvo), clearance of any liens, payment of any outstanding HOA fees, utility balance settlement.
• Closing timeline and extension terms. Concrete dates rather than vague language, what constitutes a permissible delay, how extensions are requested and granted, and what happens if the timeline cannot be met.
• Penalty structure for breach. The default arras consequences (buyer forfeits deposit; seller returns double) or whatever modified structure you negotiate, stated explicitly — along with dispute resolution, including whether mediation or arbitration applies and where it would be conducted.
• Who pays what at closing. Transfer tax, attorney fees, registry fees, and notary costs. Confirm the allocation in the contract rather than assuming a standard applies.
• Condition of the property at delivery. What the property’s physical condition should be at possession — particularly relevant if the property is currently tenanted or if specific repairs were agreed as part of the negotiation.
• If the purchase supports a Qualified Investor Visa. The seller’s representation of first-sale status (never occupied, rented or transferred) and delivery of the documents that prove it; for off-plan, the developer’s irrevocable bank guarantee as a condition of the contract; a completion date well inside the three-year cap, with delay penalties and a refund exit; payments made from the applicant’s own account by international transfer; and a price that will survive an independent appraisal. See the Qualified Investor section below.
• For gay couples: title structure. Whose name(s) the property will be transferred into, or what corporate or foundation structure will hold it. This needs to be decided — and legally documented — before the Promesa is signed, not after. See Part 10 of this series.

What Happens If Due Diligence Reveals a Problem

If your attorney’s title search turns up a lien, an unpaid mortgage, a boundary dispute, a competing claim, unpaid property taxes that the seller cannot immediately clear, or HOA arrears above what was represented, you have options — but only if the Promesa gives them to you. With a well-drafted due diligence contingency: you can withdraw and recover your deposit. You can negotiate a price reduction to account for the cost of resolving the issue. You can require the seller to cure the problem within a specified period as a condition of closing. Without a contingency clause, or if the contingency period has expired, your position is considerably weaker. You can still try to renegotiate, but from a position of having already committed a deposit that is difficult to recover without legal action.

This is the scenario that makes the due diligence contingency the most important single clause in the Promesa. It is also why “sign quickly and rely on the contingency” is a higher-risk strategy when the deposit goes directly to the seller than when it sits in escrow. Know which situation you are in before you sign.

A Note for Gay Couples on the Promesa

The Promesa is where the title structure decision becomes concrete and legally documented. Who will the property be transferred to? Both names? One name? A corporation or a private interest foundation? For same-sex couples in Panama — where the relationship is not legally recognized for property or inheritance purposes — this decision has long-term consequences that the Promesa locks in. If the property is going into both names, both buyers need to be parties to the contract. If it is going into one name or an entity, the other partner’s rights going forward depend entirely on whatever separate legal documents — a will, a power of attorney, a foundation’s regulations — have been put in place before or at closing.

Do not arrive at the Promesa stage without having made this decision deliberately, with legal advice. An unconsidered default — whoever’s name is most convenient for the moment — can create real problems later. Part 10 of this series covers the full picture. If you haven’t read it yet, read it before you get to the Promesa.

If the Purchase Supports a Qualified Investor Visa

Panama’s Qualified Investor Visa (QIV) sits on top of the property transaction and constrains how the Promesa can be structured — so if a visa application depends on this purchase, the structure has to be right from the first draft, not corrected after closing. As of September 2026, that’s truer than ever, because the rules changed in ways that reach directly into the contract.

The $300,000 vs. $500,000 question — and how it was answered

When we first published this article, the QIV real estate minimum was $300,000 under a time-limited reduction. The 2020 decree that created the program set a higher baseline. Successive decrees extended the reduction, most recently Executive Decree 193 of 15 October 2024, and as written it was scheduled to revert to $500,000 in October 2026 absent another extension. When we spoke with our attorney, Carolina Tejada Vaprio at Morgan & Morgan, in June 2026, her understanding was that the $300,000 level would remain. She was careful to say she couldn’t speak for the government.

The government answered on September 16, 2026, and the answer was a split. Executive Decree No. 17, signed September 8 and published in the Gaceta Oficial Digital (No. 30613) on September 16, replaced the previous framework and took effect immediately:

So Carolina’s expectation held for new construction and pre-construction, and the scheduled reversion happened for resale. For a Promesa, that means the first question is no longer “what’s the current threshold?” It’s “which threshold applies to this property?” The answer depends on the property’s history, and the Promesa is where you pin that history down.

How Decree 17 changes what goes into a QIV Promesa

1. The property’s first-sale status has to be proven, not assumed. A unit only qualifies at $300,000 if it’s a new, unoccupied property transferred by the developer or its successor, supported by a Public Registry certification plus construction and occupancy permits and tax records. A “new” unit the developer rented out while it sat unsold may count as resale. If you’re relying on the $300,000 figure, the Promesa should include the seller’s representation that the unit has never been occupied, rented or transferred, and should commit the seller to deliver the documents MICI will ask for. Your due diligence contingency should cover that status too: if the paperwork shows a prior occupancy or transfer, you want the right to exit with your deposit.

2. Off-plan Promesas now need a developer bank guarantee. To qualify on a pre-construction purchase, the developer must provide an irrevocable, unconditional bank instrument payable on first demand — a standby letter of credit, bank guarantee or performance guarantee. Make delivery of that instrument a condition of the Promesa, attach or reference it in the contract, and have your attorney confirm it names you and covers the amount you’re paying in. If the developer won’t or can’t provide one, the purchase won’t support the visa at $300,000.

3. The completion date now has an immigration deadline behind it. Residency based solely on promise-of-sale contracts is capped at three years total, continuous or not. If the building isn’t finished and titled to you within that window, the residency permit can be cancelled. That turns the closing-timeline clause into the most important term in an off-plan Promesa. Negotiate a delivery date comfortably inside the three years, meaningful penalties for developer delay, and a right to exit with a full refund if completion slips past a date that still leaves you time to substitute another investment. Construction delays in Panama are common, not hypothetical.

4. Know your fallback if the contract fails. If a qualifying promise-of-sale contract falls through, Decree 17 gives the investor 180 business days to substitute another qualifying investment, and that substitution is allowed only once. Your Promesa’s refund terms should get your money back fast enough to make a replacement purchase inside that window. A refund that takes a year to litigate out of a failed developer doesn’t help you.

5. The payment trail is now part of the contract’s job. The qualifying investment must come from the applicant’s own funds, with documented ownership and traceability, and gifts don’t count. Every payment under the Promesa — deposit, staged payments, closing balance — should go from the applicant’s own account by international transfer, and the contract should identify the applicant as the payer. For a couple, a deposit wired from a joint account or from the other partner’s account creates a question you don’t want MICI asking later.

6. The price has to hold up to an appraisal. If MICI thinks the purchase price is misaligned with market value, it can require an independent commercial appraisal from an appraiser recognized by Banco Nacional and Caja de Ahorros, dated within six months of filing, at your expense. A price in the Promesa that’s been inflated to clear a threshold, whether $300,000 or $500,000, is exactly what this power is designed to catch.

Who holds the property — and the question that’s still open

On how the property may be held, Decree 193 was more flexible than the program’s early reputation suggests. The qualifying real estate investment could be held personally, through a Panamanian corporation, or through a Panamanian private interest foundation — provided the applicant maintained beneficial ownership of the qualifying value. It also expressly contemplated co-ownership arrangements between spouses or dependents. The reporting on Decree 17 we’ve reviewed doesn’t address holding structures one way or the other, so confirm with your attorney that these options carried over before you build a Promesa around one of them.

For a same-sex couple, the co-ownership provision is where it gets complicated, and where we want to be careful not to overstate what we know. Panama does not recognise same-sex marriage for immigration purposes. Whether a “spouse” co-ownership route is available to a couple whose marriage Panama does not recognise is precisely the question we have not been able to resolve from published sources — and it is not a question a website should answer for you.

The foundation route doesn’t depend on that question at all. A private interest foundation can hold the qualifying property with the visa applicant as the beneficiary satisfying the beneficial-ownership requirement, while the foundation’s own regulations name the partner as a subsequent beneficiary. That structure addresses succession without relying on Panama recognising the relationship. If you’re going this way, the foundation has to exist before the Promesa is signed, and the Promesa should name the foundation as the buyer. We’ve written up that mechanism separately, and we cover the full comparison of personal name, corporation, and foundation in Part 8 of this series.

We will update this article when we have gone through the Promesa process ourselves. There are things you learn from an actual transaction — the specific language your attorney uses, how the seller’s attorney responds, what gets negotiated and what doesn’t — that no amount of research fully prepares you for. What we can tell you from research is that the buyers who protect themselves in Panama transactions are the ones who treat the Promesa as the serious legal document it is, and who have their attorney involved before they sign rather than afterward.