Currencies

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Let's take another look at the property-buying scenario from our introductory pages. Then let's discover how different the experience would have been if a currencies company had handled the money exchange transaction instead of your bank.

You have found a property in Spain. It is for immediate sale. You are able to buy it outright. The price is 20 million pesetas. Your bank quotes you an exchange rate of 270 pesetas to 1, which equals 74,074.07. It takes a month to finalise the paperwork. You then give your bank the go-ahead to buy the 20 million pesetas. But instead of asking you for a total of 74,074.07, the bank demands 83,333.33. An additional 9,259.26.

During the four weeks since the bank quoted its rate of 270 pesetas to the 1 the Spanish currency has strengthened. Now 1 buys a mere 240 pesetas. (It could have been worse and could have happened faster).

You were aware that the market fluctuates from time to time. But never for a moment did you anticipate such an adverse change in such a short time.

Even if you were aware of the risk, you were unaware you could protect yourself against it. No-one at the bank mentioned the subject. No-one referred to 'stops' and 'limits', the automated mechanisms which big business uses as a matter of course to protect their money when undertaking foreign currency exchanges. Nor did you have any idea that you might have been able to find a more advantageous rate than 270 to the 1 in the first place.

So to sum up this process, whilst the pound to peseta rate is still good it is indeed an ideal time to buy your Spanish Property, against a rate of 190 pesetas to the pound in December 1995. However when transferring funds in excess of 10,000 you really should use a professional company to ensure that the funds are reserved and purchased with no risk of buying a property in the end that is not as good a bargain as it once appeared.

Our warning to you is get the money out there before you start looking, however this is not always as easy as it sounds but you really do need to know you are correctly funded prior to putting down deposits on properties.

For advice on currency transfers the following companies should serve you well

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