A Canadian couple client of mine, buying a $730,000 USD condo in Key West, saved over $9000 CAD on their purchase because they locked in an exchange rate upon the advice of Moneycorp. Their Moneycorp personalized currency dealer advised them that over the next few weeks, the Canadian Dollar (CAD) was predicted to fall against the US dollar. Upon their request, Moneycorp locked in the exchange rate on the Canadian Dollars on the balance due, the CAD fell and 40 days later, at Closing, the final transfer of funds saved them over $9000 CAD. They were very happy!
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Moneycorp is Headquartered in Victoria, London, UK. Moneycorp is a provider of information and services devoted to international currency management and exchange. There are nine offices spread across Europe, Asia, South America and the United States. In the USA, Moneycorp is Headquartered in Orlando, Florida with additional offices in Providence, Rhode Island, New York City, Washington,DC, Miami, FL and San Francisco.
Moneycorp began dealing in foreign currency exchange in 1979 and serves the growing foreign exchange and payments needs of global businesses, importers and exporters, online sellers and personal clients. In particular, Moneycorp services buyers and sellers of personal and commercial real estate, facilitating the secure movement of currency across international banking systems and, following its 2018 purchase and integration of Commonwealth Foreign Exchange (FX), through 46 states in the US.
Hope is not really a strategy
"Ninety-seven per cent of foreign exchange trading is speculative, only 3 per cent is related to trade and exporting so the market isn’t being driven by real-world economic fundamentals. Moneycorp brings the expertise, the technology platforms, and the ability to hedge forward to give companies the tools to mitigate the risks presented by this environment. And that’s all that we do. We are a one-trick pony and specialise in this area." - Richard Morrissey, Associate Director, Moneycorp.
What impact do foreign buyers have on Florida real estate?
For 2018, foreign buyers, as they have had for the past dozen years, had an ousized impact on the sale of real estate in Florida; specifically,
- Foreign buyers purchased $22.9B worth of residential real estate
- This $22.9B accounted for 19% of Florida's volume of sales (nationwide volume is 8%)
- Purchased 13% of Florida's residential market (nationwide is 5%)
- The median purchase price for a foreign buyer is 20% higher than the statewide median purchase price
- Latin American and Caribbean buyers accounted for 36% of purchases, Canadians at 22%, Europeans at 19%, and Asians at 11% (and rising).
- Sixty-seven percent of purchases were all cash (Cash sales nationwide average 23%)
Source: 2018 Profile of International Residential Real Estate Activity in Florida - Florida Association of Realtors
An extended family from Salvador, Bahia, Brazil (north of Rio on the coast) wanted to buy a home in the Miami area. Taking a break from their search in Miami, they drove to Key West for a 3-day weekend. And fell in love. Found a house that was for sale and made an offer to buy it. $2.35M. The family had no bank accounts or credit history in the US. Now what?
The Florida-approved AS IS Residential Contract for Sale and Purchase states an escrow deposit must be made within 3 days of both buyer and seller agreeing to the terms of the contract. In this case the amount was $50,000. The Contract also directed a second deposit to be made after the 15 day Inspection period. $75,000. How does someone with no bank account in the US make such deposits?
How does Moneycorp coordinate the transfer of funds with the closing agent so the property closes on time?
Moneycorp made It all so easy, fast and pain free.
A few simple steps and its done
If the Buyer hasn't set up a Moneycorp account already, as soon as the sale price and terms in the AS IS Residential Contract for Sale and Purchase are agreed upon by Seller and Buyer, the Buyer should:
- Call Moneycorp to set up your free account. Your account can be set up in mere minutes.
- Follow up with an email so there are no questions about what needs to be done and by when. I prefer to write the email; identifying the various milestones and money obligations and attach a copy of the AS IS Contract so Moneycorp, the Buyer and I can all work from the same document.
- Moneycorp will convert the US value of the escrow deposit; in this instance $50,000, into the native currency amount of the Buyer, in this instance Brazilian Reals.
- The buyer contacts his/her native bank and has that native bank transfer the native currency amount to their account at Moneycorp.
- Moneycorp converts that native currency amount into the $50,000 escrow deposit and sends it to the Closing Agent for the sale.
- The Buyer and their Moneycorp personalized currency dealer then discuss how to manage follow-on transactions so the Buyer does not loose money on future transfers due to a negative currency change fluctuation. I follow-up with email to Buyer and Moneycorp so there is no confusion and to provide a paper trail.
- Moneycorp coordinates with the Closing Agent to make sure all necessary money is sent to and received by the Closing Agent in order to satisfy contract requirements.
- Moneycorp will coordinate with the Closing Agent for the management of FIRPTA obligations when a foreigner Sells real estate.
- Moneycorp can not act as an Closing or Escrow Agent.
- Proof of all transfers and exchanges can be forwarded by Moneycorp to the appropriate Realtors.
Easy as pie.
What if I am a foreign national Selling property?
Whether Buying or Selling, a foreigner should estabish a Moneycorp account as soon as they have an intent to purchase or sell US real estate. This is even more important for Sellers. The reason for this is the US Patriot Act.
If the Seller instructs the Closing Agent to send money from the sale to a US bank, that US bank requires the Seller to be physically present in the US bank when the Seller has the US bank send money from the sale to their foreign bank.
However, if the Seller instructs the Closing Agent to send money from the sale to a Moneycorp account, who then sends the money from the sale to the foreign bank, those transfers do not require the Seller to be physically present. Additionally, unlike the bank, not only does Moneycorp not charge fees for sending and receiving wire transfers, you will receive the internationally assigned exchange rate - almost always better than a bank rate.
Conclusion
When home prices are in the hundreds of thousands or millions of dollars, a few tenths of a penny move in exchange rates can have a big impact. No matter how rich you are, nothing puts a smile on a customer's face more than saving money. And knowing that they know that you steered them to Moneycorp to save that money - will put a smile on your face!
I take all my currency exchange business to Iva Slavtcheva and Kelly Cutchin, both in Moneycorp's office in Orlando, Florida. Slavtcheva is the Business Development Manager of Moneycorp. Cutchin is the County Manager - USA. Send an email to Iva and Kelly. You will be completely satisfied.
If you have any comments or questions, please contact me here.
Good luck!
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