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Buying or selling a home is known for being one of the most stressful life events.
Doing it for international real estate? Even more complexity and moving parts.
There is, however, one part of an international transaction that I can help you feel fully confident about: currency conversion.
Beware banks
The first thing to know is that banks are one of the most expensive ways to transfer money abroad.
This cost comes in two forms: fees and exchange rates.
The fee part is pretty simple. This will be either a fixed or percentage added to the cost of your transfer. Any fees should be clearly indicated by the bank.
The exchange rate component is a little sneakier. Most people don't realise that the exchange rate offered can create additional, hidden fees.
Banks are notorious for quoting poor exchange rates. This means you have to pay more (in your currency) to get the same amount at the other end.
Example of how the costs work
Let's consider an example of how bad exchange rates can actually be the main cost driver in an international real estate purchase:
Payment method | Purchase price (EUR) | Fee | Exchange rate | Amount to send (USD) | Total cost difference |
|---|---|---|---|---|---|
Bank | €350,000 | $20 | 1.0723 | $326,401 | +$10,087 ❌ |
Money transfer company | €350,000 | $970 | 1.1098 | $315,363 | -$10,087 ✅ |
It's clear that on high-value real estate purchases, the impact of bad exchange rates can be huge.
Specialist money transfer companies tend to be a lot cheaper overall. They also offer fast transactions, dedicated support and are experts in currency conversion.
Like the sound of that? Then please do try our comparison tool - we search live rates across the market to find the cheapest deals. Less cost, less hassle, and more time to focus on your real estate purchase.
Which kind of money transfer company should I use?
The market breaks down into two main categories: digital providers and managed services (also known as currency brokers).
We recommend the managed service for a real estate transaction. Having an assigned customer contact, with an email and phone number, provides great reassurance during the process. They are very familiar with facilitating real estate purchases abroad, and will be able to hold your hand throughout.
The best FX broker for you will depend on the amount, country & currency you're sending. That's why we recommend you enter your details into our form and for an accurate view.
Currency broker options with real estate experience
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Transaction guide for buyers
Let's look at some of the main payment milestones that you might expect as a buyer.
Deposit
Not all purchases require a deposit, and those that do can vary substantially in percentage.
For this reason, the FX saving on deposit payments varies hugely depending on your circumstances.
Even at the lower end, the savings on offer make it worth using a money transfer specialist.
As the deposit is often the first transfer, we recommend setting up your account with a currency broker and speaking with them in advance.
This will put you in prime position to confidently secure a property with a deposit, without having to resort to a rushed bank transfer.
⬇️ Recipient | A third party escrow account, lawyers/solicitors or real estate agents |
|---|---|
📍 Recipient location | Usually in the same location as the real state |
💰 Cost | Medium to high 5-10% of the purchase price 10-30% for new build developments For most purchases this would be between $2,500 and $100,000 |
🔁 Frequency | 1-2 payments |
📊 FX impact | Yes - usually agreed in foreign currency and paid to a foreign currency account |
Legal fees
Most real estate buyers use law firms local to the purchase address.
This means they have expert local knowledge and understanding of relevant laws.
They will likely bill you in their local currency. Legal costs can really add up, so it's worth optimising the FX impact of the payments.
⬇️ Recipient | Lawyers/solicitors |
|---|---|
📍 Recipient location | Usually in the same location as the real estate |
💰 Cost | Medium |
🔁 Frequency | Can be one off; often multiple phased payments |
📊 FX impact | Yes - usually billed in foreign currency and paid to a foreign currency account |
Inspection & surveys
It is common to instruct a local company to survey the building, making sure there are no surprises.
Expect to pay to their bank account in the destination country.
Depending on the comprehensiveness of the survey, the price will vary. Still, it's worthwhile making the payment using a specialist.
⬇️ Recipient | Inspection company/surveyor |
|---|---|
📍 Recipient location | Usually in the same location as the real estate |
💰 Cost | Low to medium |
🔁 Frequency | One-off |
📊 FX impact | Yes - usually billed in foreign currency and paid to a foreign currency account |
Taxes / stamp duty
Stamp duty tax is payable by real estate buyers in many countries. Rates are extremely variable. Here are some examples:
UK: from 0% up to as much as 12%
Spain: 1.5%
Portugal: 0.8%
Singapore: 30%
Italy: from 2% up to 9%
A €75,000 apartment in Portugal would incur less than a thousand dollars of stamp duty. On the flip side, a £500,000 cottage in the UK would cost around $15,000 in stamp duty.
There are substantial savings to be made on this transaction - just make sure you don't use your bank to transfer this money!
⬇️ Recipient | Local tax authorities |
|---|---|
📍 Recipient location | The same juresdiction as the real estate |
💰 Cost | Medium to high |
🔁 Frequency | One-off |
📊 FX impact | Yes - usually billed in foreign currency and paid to a foreign currency account |
Final payment
Unsurprisingly, this cost is likely to be greater than all others combined. It's crucial to make this payment using a dedicated money transfer company, and to shop around to find the best deal for you.
Our earlier example showed a $10k saving on foreign exchange costs by sending smartly.
Serious savings.
⬇️ Recipient | A third party escrow account, lawyers/solicitors or real estate agents |
|---|---|
📍 Recipient location | Usually in the same location as the real estate |
💰 Cost | Highest |
🔁 Frequency | One-off |
📊 FX impact | Yes - usually billed in foreign currency and paid to a foreign currency account. |
Lock-in rates to protect against FX fluctuations
It's common for international real estate transactions to drag on for months.
A lot can happen in the global economy between agreeing a price, and sending funds. This creates something called 'foreign exchange risk'.
You'll be agreeing a price with a seller in the local currency (such as euro), but most likely paying with your own local currency (such as US dollars). So even if the agreed price remains the same, it could cost you less, or more, in your own currency.
This could easily have increased the cost of the purchase by 5% over the period of 6-9 months. A fluctuation like this could really hit your pocket, or force you to cancel the transaction completely.
Managed FX services know this, and so they give you a chance to lock in rates with a 'forward contract'. Put simply, for a fee, you can lock in the exchange rate, eliminating future changes.
That's one less thing to worry about!
We recommend you speak with the team at Currencies Direct to learn more about how forward contracts could benefit you.
| Name | Score | Visit | Disclaimer | |
|---|---|---|---|---|
 | 8.9 | Visitcurrenciesdirect.com |
A note for sellers
Sellers will incur some of the same costs as the buyer, such as legal fees. However, the main job of the seller is to receive the money effectively.
As a seller, you may already have set up a local bank account or a multi-currency account. You might also have used a money transfer company as part of the original purchase.
It's still easy to get stung by poor exchange rates as a seller. Make sure that any funds are received into a same-currency account. If you don't already have one, take a look at our guide to the best multi-currency accounts.
You can then make the currency conversion using a specialist and keep as much of the sale proceeds as possible.
Continue reading
The average cost of an international transfer from a bank since 2016 has been upwards of 17% of the total send amount. When receiving money into your bank account you will pay fees of around 3% just to receive the money.
Forward contracts are made between two parties without the need for another organization (such as an exchange or clearing house) to act as an intermediary.
