Purchasing property in Panama is usually done in two different stages.
Stage 1: The Promise of Sale and Purchase.
This contract is performed preliminary to the sale and purchase contract. In this particular contract the seller agrees to sell to the buyer at an established price the property. It is common that the buyer consigns a down payment to the seller to ratify his commitment to the sale. If the buyer decides not to proceed with the acquisition of the property, he will usually lose the money that was given beforehand to guarantee the sale. On the other hand, the seller is bound to sell the property object of the contract
Stage 2: The Final Contract.
This contract is done in the form of a public deed and has to be registered at the Public Registry of Panama. Prices for registration will depend on the value of the property or on the price of the sale. When the contract is registered, the change in the ownership of the property is done.
As of the time of the registration, you become the owner. By far the safest possible way to pay the remainder of the purchase price to the seller is by an irrevocable letter of payment issued by a bank. The bank holding the funds issues the irrevocable letter of payment to the seller and pays it as soon as it is presented with the registered public deed transferring title to the buyer.
Please be advised that the law establishes that the seller pays the transfer tax and the buyer pays for the legal and registration costs.