At Total Buying Abroad we aim to make your Italian property purchase as stress free as possible whilst helping to save you money in the process.
If you are considering buying a property in Italy, the property purchase price will probably be in Euros. If you have your savings in Sterling (or another currency) you will need to consider how you will deal with the currency exchange.
Your initial thought may be to instruct your bank to transfer the money for you. However this can be a very expensive and inefficient way of dealing with the transfer.
It is strongly advised that anyone who is transferring large sums of money into another currency uses a recommended currency specialist to help exchange the money required, rather than making the transfer through their bank.
By using a reputable currency specialist you can easily reduce the costs of buying a property in Italy and avoid the negative effects of any adverse currency fluctuations.
So how can currency firms save you so much money?
High Street banks make large profits by making currency exchanges at uncompetitive exchange rates. They also charge excessive amounts in commission or fees just to transfer the funds.
However, currency specialists are able to offer you a far superior exchange rate when compared to the banks and most make only minimal charges (if any at all) for exchanging and transferring your money for you.
Let’s look at an example of a purchase of a property in Tuscany costing 250,000 euros. On average currency firms can save you 3-5 % of the amount of money transferred when compared to using a high street bank. In this case that’s a saving of up to 12,500 euros on the currency conversion alone!!
But there is more that they can do…
Currency specialists can also save you a considerable about of money and hassle by helping you to organise your transfer in a way that will minimise the effect of adverse currency fluctuations on your savings.
Here are some examples of how:
Mr and Mrs Connor had £180,000 to spend on a property near Naples. They needed all the money straight away and planned to do a “Spot Trade” (please see our Jargon Buster below)
At the same time, a recommended currency specialist was offering a rate of €1.20 – at this rate they would get €216,000. In this example the Connor’s saved €7,200 euros just by using a recommended currency specialist instead of their bank. However, that’s not all….
There is another way that a currency specialist can really save you money.
Currency specialists can also provide advice and transfer strategies like fixing the exchange rate to help you avoid the impact of exchange rate fluctuations (this is known as a “Forward”, again see our Jargon Buster for an explanation). Please see the example below:
Mr McGregor had his offer accepted for a property in Verona. The price that was agreed was €240,000.
He paid the 10% deposit of €24,000 required once the offer had been accepted in February 2016. He got a rate of 1.21 euros to £1 so the deposit was £19,845.
The remainder of the purchase price, €216,000, was required to be paid upon completion on the purchase. At the rate received at the time of paying the deposit this would have cost £178,512.
This meant that Mr McGregor would get less euros for his Sterling saving and the balance of €216,000 would now cost him £184,615.
This meant that on completion day Mr McGregor would have had to pay £6,103 more for the property than he expected when he did his calculations two months earlier.
Fortunately, Mr McGregor had been in contact with a recommended currency specialist before he made his deposit. The specialist had advised him that he should protect himself from the risk of a drop in the exchange rate by fixing the rate (known as a “Forward”) at the rate when he paid his deposit.
Therefore he was able to transfer the remaining balance of the purchase price on completion day at the same rate as when he had paid the deposit. This meant that he knew exactly how much the property was going to cost him and also he saved £6,103 thanks to the help from his recommended currency specialist.
This shows that when you are purchasing a property in Italy it definitely pays to be organised!
If you would like any further information about how a currency specialist can save you money then contact Total Buying Abroad on 01244 478911 or at firstname.lastname@example.org. We will be happy to provide details of recommended currency specialists who have assisted many people purchasing property in Italy navigate the currency markets and will be able to assist you.