The risks of currency exchange in an international real estate transaction

1
The risks of currency exchange in an
international real estate transaction

• Stella Giudicelli
• Business Development Manager
• Moneycorp, Inc

2
Uncompetitive exchange rates

• Who exchanges currencies for your international
  clients?
• Why are your clients offered uncompetitive
  exchange rates?

3
Fluctuation of the exchange rates

• Fluctuation of the exchange rate GBP to USD over
  the last two months

4
Fluctuation of the exchange rates

• GBP / USD Purchase of a 250,000 property

September 11 September 26
Exchange rate for GBP 1 USD 1.6741 USD 1.5768
Amount of GBP necessary GBP 149,334 GBP 158,549
Difference in GBP GBP 9,214
Difference in USD USD 14,530
5
Time of transfers from overseas to the US

• Complains from real estate professionals
• Who do you talk to?

6
Introduction to FX brokers
Competitive exchange rates
Buying USD 250,000 HSBC Moneycorp
Exchange rate for GBP 1 USD 1.5627 USD 1.6480
GBP price GBP 159,980 GBP 151,714
Transfer fee GBP 25 GBP 15
Total GBP 160,005 GBP 151,714
Savings GBP 8,290 USD 13,663
Based on a 250,000 purchase with the comparison
carried out on 06/22/09
7
Introduction to FX brokers Assistance with the
fluctuation of the rate

• Guidance
• Locking of a rate for up to two years
• True story of a UK buyer
• Example for a seller

8
Introduction to FX brokers
Transfer of the funds

• Same day transfer
• Communication with the real estate professionals
• Assistance for a smooth closing

9
Summary Questions