Buying Property Abroad

Buying a home overseas is a long-held dream for many people – and realising that dream is often one of the biggest purchases of their lives. Perhaps you want a period property to restore in Italy, or a beachfront apartment to use as a holiday home in Spain – or maybe an investment property in an up-and-coming market like Lisbon.

Whatever the case, it’s a big and exciting step to take! It can also seem daunting, with a different currency, different rules and a different language – but, with the help of specialists, you’ll find it goes smoothly and efficiently.

Smart is a specialist in safe, risk-free transfers for people looking to purchase a property and/or move and live overseas. We have helped thousands of people turn that dream of a home in the sun into reality! We are rated “Excellent” on Trustpilot in the UK for Money Transfer and are the chosen currency partner of Rightmove, Property Guides, Your Overseas Home and more.

What are the key elements to consider when buying a home abroad?

Buying a house is never an everyday purchase, and that’s all the more so when buying a property overseas! The timescales are different, the speed of the purchase is different and, of course, the actual purchase process is different. If you’re buying in some of the most popular countries, like Spain, Portugal, France and Italy, from outside the eurozone, then you’ve also got to consider how to safely send your funds abroad without losing money to changing exchange rates.

Let’s have a look at this in a little more detail.

Different timescale

Buying a home overseas is a very different timescale to buying in the UK. You can’t just see a few houses from time to time, as and when you find one you’re interested in, unless you want to spend a lot on flights and accommodation! Instead, your timescale will be dependent on your viewing trip – four to seven days, usually, when you’ll go out and visit your shortlist of homes all together.

This means that you need to sort out how you’re going to send your money safely over before you start viewing properties. You need to be ready to make an offer when you go on your viewing trip, as you’ll otherwise be unlikely to arrange a second trip immediately out.

Different speed

It’s also important to remember how quickly homes can be snapped up in desirable locations, such as on the beach. You want to be able to make an offer as soon as you find your dream home – and not have to go back home, sort out the finance, re-contact your agent and then find that the home has already been taken by someone else. Remember that in many European countries, the seller will sign a reservation contract with the buyer, so, once an offer is made, they can’t then take someone else’s.

A larger sum

Most property sales are valued in the tens or even hundreds of thousands. Sending so much money to a foreign country with a different language, currency and legal jurisdiction requires specialist experience and regulation. Smart Currency Exchange is authorised by the Financial Conduct Authority.

Safely sending your money

One problem you won’t have experienced as a buyer in your own country, is the potential movement in exchange rates between reserving a property and paying for it. While the lawyers and notaries are doing the legal processes, the currency can move against you. If you’re buying a €200,000 property and when you put the deposit down you could get €1.25 to the pound, it would cost you £160,000. But suppose in the weeks until completion, the rate moves against you to €1.10? Now your €200,000 is costing you £181,800. You have LOST £21,800. Could you find that money? If you can’t you will normally lose your deposit.

Smart has a range of solutions to currency changes: volatility, as it is known. One of the most popular is a ‘forward contract‘. This simply means that you lock in the same exchange, for no further fees, for up to twelve months. In other words, in the example above, if the exchange rate moves from €1.25 to €1.10, that €200,000 home still costs only £161,000. You have removed your money from the risk of the live markets. Whatever movements happen, they won’t affect you. No wonder the majority of overseas buyers, according to our 2019 survey, use this method to protect their money.

Once you’ve moved, or for smaller payments, you might also choose a spot contract, or you might want to set up a regular payment plan. At Smart we will find the one that is most appropriate for your own circumstances. We have produced a free guide to your options, The Property Buyer’s Guide to Currency, packed with insider tips. And, if you are selling a home, don’t miss our guidance on international transfers for selling a property, whether it’s in the UK from abroad, or another property overseas.

Signing up with Smart takes just a few minutes. We simply take your details including proof of address and some ID (to comply with the law), and you’re done. Now you can get guidance from our team of currency traders, all of whom are dedicated to getting a great deal for you. You can also speak to our traders at exciting property events up and down the country too.