I'm buying a development property. How can HiFX help?
When buying overseas property, you’ll have to make one or more international money transfers to complete the purchase.
This requires serious planning, especially if you are buying a new development ‘off plan’ where you will be required to make a number of ‘stage payments’ during the construction of your property.
For illustration purposes let’s assume that you’re a
US
resident buying a holiday home in France
.
The developer will require an up-front deposit in Euros and then further ‘stage payments’ during construction over the next 18 months with a final payment upon completion.
Although you will know the price of your property in Euros, the actual cost in Dollars will be determined by the exchange rate you obtain. If the Dollar strengthens during construction the cost will decline, but if the Euro strengthens, then your costs will increase i.e. a stronger Euro means your overseas property will be more expensive. As a result, until you’ve secured an exchange rate, you will not know the final cost.
Whether you’re buying in
Spain
,
France
,
Canada
or any other country the principles are the same.
To eliminate this risk, many of our clients buy a ‘forward contract’. This is essentially a ‘buy now pay later’ option, allowing you to lock into an exchange rate, even if you don’t have all the funds available. Should the rate get worse, you will not be affected.
If however you have access to all of the funds from the start and want to convert them immediately, you can enter into a ‘spot contract’. Unlike a forward contract this is a ‘buy now pay now’ option, and you will need to arrange the immediate transfer payment for the full value of the currency bought or sold to HiFX.
To discuss which strategy is right for you, call our Private Client Team on +1-415-678-2770.