When buying property abroad, there’s lots to consider. How do I find a property? Does this contract seem legit? Both are very valid questions, and can be answered by talking to estate agents and a lawyer, but have you considered talking to a Currency Specialist?
Why a Currency Specialist?
We all know currency rates go up and down daily. So when you’re buying property abroad, this also means that the price of your currency and the exchange rates also changes by the second. Put simply, the price of your property could change dramatically between you agreeing on a price and the time to pay.
A currency specialist can help you navigate the buying process, all while managing the risk that surrounds dealing in foreign exchange and currencies.
Let’s say you’ve agreed to buy a house in France for €300,000 without the help of a currency specialist, when the rate hit an eight-year-high at 1.40. The price in pounds equates to £214,286. If you purchased this property a few days later, it could be that the rate sunk to 1.36, so the price in pounds would have changed to £220,588. This reflects a loss of £6,000.
Deposit to completion…
Typically speaking, it can take anything between 3-6 months to complete an overseas property purchase. Exchange rates change all the time, so it’s likely that the price of your property in pounds will be very different at completion to when you paid the deposit.
For example, in the last 6 months, the GBP/EUR exchange has been as low as 1.139 and as high as 1.20. That means the price in pounds of your €300,000 property has fluctuated by over £11,000.
To reduce the risk of paying extra, you can use something called a Forward Contract.
What’s a Forward Contract?
A Forward Contract is very simple. It is a legal currency contract that allows you to buy currency at an agreed exchange rate at a future date. Typically, you pay a deposit of 10% now and agree to pay the remainder when the balance is due.
A currency specialist, like Smart Currency Exchange, can use a Forward Contract to lock-in your exchange rate for the agreed period, thus allowing you to know exactly what your costs are. It also gives you peace of mind, as your money is safe from any sudden drops in the rate.
Check out today’s rates by requesting a free quote with us
Why use Smart Currency Exchange?
Here at Smart, we’ve been helping people buy and sell overseas property safely for over a decade.
You will be assigned a personal trader when you sign up, who will talk you through the best way to complete your transfers and give you advice throughout your property-buying process. They can offer guidance on fluctuating currency rates and monitor the market for you, so you’ll no longer have to keep checking the rate.
It’s also worth noting that your trader is not paid on commission, so you know they’re offering a truly impartial service that puts your needs first. That’s why Smart is rated 4.9/5 on Trustpilot with over 1,500 independent reviews.
We recommend you sign up with a currency specialist ideally at least six months before you plan to buy abroad, to give them time to work out a currency strategy for you on your behalf.
Set up a free account with Smart Currency Exchange and have a no-obligation chat with your personal trader today