The Costa Property Podcast

#89 Buying Property in Spain? Here’s EXACTLY How to Protect Your Budget from Exchange Rate Movements

• Warner and Sandra Laurie - WL Costa Properties Real Estate Spain - Costa Del Sol • Episode 89

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Exchange rates can shift your Spain property budget by thousands. 

In this episode, Sandra talks with Carol Schleisman from Currencies Direct about how exchange rate movements impact buyers, including a real case where a buyer’s budget dropped by €20,000 during her trip.

You’ll learn the key pitfalls to avoid, how to protect your rate with forward contracts, and why speaking to a currency specialist early prevents last-minute stress.

What you’ll learn in this episode

  • How exchange rate movements affect your Spain property budget
  • Why one buyer had to revise her budget down by €20,000
  • What actually causes rates to move
  • The pitfalls of relying only on your bank
  • How forward contracts + limit orders protect your buying power
  • Why early conversations avoid last-minute stress
  • How Currencies Direct support buyers before, during and after completion

If you’re buying on the Costa del Sol or anywhere in Spain, this is essential listening before you transfer a single euro.

Resources mentioned

Get Started with Currencies Direct Today: https://wlcostaproperties.net/currency-exchange/

Thinking about buying a property on the Costa del Sol?

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Sandra:

So welcome back to our YouTube channel. Now, today we've got a very interesting topic to cover. Over the last number of months, we've really seen currencies fluctuate, especially when it comes to the pound and the dollar. So we've brought an expert. Into the studio to talk through this topic and exactly what it means for your budget. Carl, welcome to the show. Good morning. Thanks for having me. Brilliant. We're so excited to have Carl with us. Carl is the regional manager from Currencies Direct, and Currencies Direct has been helping us support our clients for many years now, as I mentioned this question around currency fluctuations has been coming up more and more so. We absolutely wanted to sit down with the experts and really trash this topic out. So look, as I mentioned, to cut straight to it. This. Topic of currency fluctuations. I guess in your business, you hear this all the time, but in recent weeks and months, particularly what's happening in terms of exchange rates to dollar and pound, we are hearing a lot of questions, noise from our clients connected to this topic. So are you hearing the same

Speaker 2:

We are because obviously like yourselves, we're dealing with people that buy property and people that are selling property. So of course when the Euro gets weaker., The buyers are unhappy because suddenly their whole budget for their property has changed.

Sandra:

Yes.

, Speaker 2:

Clients that are selling their property, particularly if they're changing to US dollars or sterling, they're over the moon because of course they're getting more bang for their buck, but a lot of people tend to think that. The currency is only affected by what's going on in that particular country. Mm-hmm. No, I mean, the currencies are, for example, Sterling, it's been, I won't say volatile, but there's been movement, due to inflation. Mm-hmm., The discussion about speculation on whether they're gonna cut the bank rates, et cetera., The Euro has in fact strengthened. So it's not just that the pound is weakened, the Euro has. Excuse me, has strengthened. Mm-hmm. Due to after the US administration put the tariffs on and the rest of the world, the Euro was sort of seen as a, a safer currency. Okay. Interesting. So that's improved its resilience, shall we say. Okay. And these are all things that people need to think about, but that's our job.

Sandra:

Yes. And we're really going to go through this. In a lot of detail today, but I wanna share with you an experience that I had with one of our clients that we're working with at the moment, just two weeks ago. Okay? She came over on a buying , trip. She's a buyer from the uk so she's coming over with Sterling Fluctuations took place while she was here, and it ended up in a situation, Carl, where she had to revise her budget down by 20,000 Euro. Now. For many people out there, if they're in a buying process, that's quite a lot of money. It might mean the difference between second line to third line beach. It might mean the difference between a, you know, a one bedroom and a two bedroom apartment, particularly in this area, in today's market. And , I felt, I guess sad at the time because I think we could have done things to prevent that happening in advance. Right. So looking at that particular situation and looking at, I suppose. That buyer and her disappointment at the time, how would you advise us to, you know, ensure that we don't have buyers that are in that situation moving forward? It, it's a really good

Speaker 2:

question. I would recommend that you put us in contact with the client. Okay. Early in the process. Mm-hmm. Not when they found the property. Yeah. Even whilst they're still looking, because you quite rightly said, some people have a fixed budget in Sterling and what they can save on. Somebody monitoring their, their requirements. Mm. Can be the difference between even furnishing a property. Absolutely. Or potentially, like you said, buying a better property than they'd anticipated. But the worst case scenario is if they're not prepared for any fluctuations, they might not be able to buy at all.

Sandra:

Yes.

Speaker 2:

And that's the last thing you want. Yeah., So. Our role as a currency specialist is to monitor the market on behalf of the clients. Mm-hmm. According to their requirements. Keep them up to date. They, you know, they're busy people. Mm-hmm. Mm-hmm. Whether they're retired or whether they're working, they don't have the time to keep focusing on Okay. On the currency market. So that's where we come in. Okay. Um, clients have their own. Dedicated dealer. Mm-hmm. So any movement either in their favor or against, we're in contact with the clients so that they can make an educated choice when they're moving their money rather than just it is what it is on the day.

Sandra:

Okay. Amazing. So let, talk to me about then a little bit like, because we do work really closely with you guys and you know, most of our clients are, are pretty open-minded and they know that I wanna work with a currency experts. Yes. And we make those introductions and they work seamlessly. But some clients need a little bit more handholding and they. Through their own assumption, they feel, well, I don't really need to start working with a currency company until later on in my journey. But we've learned through discussing with you and our experience, these conversations should be happening from the start. Right?

Speaker 2:

Absolutely. And and as I said, never too soon put us in contact or the client to speak to a currency specialist because as we said, if they're looking at particular budget, we can set in motion. We have. Different, , services tailored to their specific requirements? Yeah. So we have, for example, a forward contract, which is kind of like the buy now pay later of the currency world. Okay. So let's say before they've even found their property or once they've put a deposit on the property, perhaps they're not completing for another couple of months. Okay? So they can say, you know what? The rate's really good right now, but I don't have all the money to convert it. So we can set up., This contract for them that we will buy all the currency at that rate. Wow. And then obviously when their funds become available. Yes. So they're not missing out.

Sandra:

That's amazing because let's be honest, most clients are in some sort of chain, aren't they? Yes. They're buying or they're selling to buy. And as you correctly say there, they might need a little bit of time for mo movement of money, whether they're selling a property in the UK to be able to buy here. So if they identify that the rate is good, at that point, they're able to form a plan with you, so to speak. Exactly.

Speaker 2:

Okay. Which makes sense. So there's no nasty surprises at the end when it comes closer to completion. Yeah, they know exactly what, for example, if they're British, exactly what their property's gonna cost them in Sterling. Okay. Okay. So that's a huge bonus, but. Equally sometimes, you know, we, we've had this in the past where people say, oh, I'll use my bank and I'll do it and it'll be instant, and so on and so forth. Now, welcome to Spain. It doesn't work that way. No, and it shocks me how many people, even now that are working with currency companies that are not aware, they can't always do an instant transfer on the day from the UK bank., Of course, a lot of banks, it incurs charges for them as well, so. Our role is not only to help them with the rate and make sure their money's where it needs to be at the right time. Mm-hmm. But it's also also to help them avoid the pitfalls mm-hmm. Of things that they're probably not aware of.

Sandra:

Absolutely. And we work with you guys in two capacities, so. For buyers. Okay. As we've just spoken there, but also for sellers, and that's very good to know for a seller, what you've just discussed there when it comes to not just currency protection because we know you do that expertly, but that movement of funds, particularly those larger. Amounts of money. Absolutely.

Speaker 2:

For example, sellers and currently there's a lot more people are trying to do sort of bank transfers, but there's, there's a risk for the buyer if they're transferring the money to the seller. Mm-hmm. Or that they don't mind transferring it perhaps to a lawyer or even a notary. Mm-hmm. A lot of people use banker's drafts. Now, many people are not familiar with the fact that a banker's draft costs money to be issued, and it's normally a percentage of the amount of the check. Okay. Depending on the bank, it can be anywhere between 0.4 and 0.6%. Okay. So that's quite a chunk for the buyer. Absolutely. But when the seller has possession of it, what do they do? Yeah. If they're not using a currency company, they have to put it in their Spanish bank account. Okay. Who will charge them? To put it in. Okay. They'll charge it to send it to their home country, and of course the rate will be in the favor of the bank rather, rather than the client, of course. But for example, we have a unique agreement with a major Spanish bank. It's a nationwide agreement that our clients can put their banker's drafts directly in. They don't incur any of those charges, so right away they're saving. Around one to 1.2%. Wow. Before we even talk currency. That's significant. Yeah. If it was 20 euros, people wouldn't care. Exactly. But when you're getting into hundreds and potentially thousands, especially in Costco, they sold. Yeah. That's a lot of money. That's a

Sandra:

lot of money.. Definitely food for thought on that. Yeah. I wanna go a step back if that's okay, because I think that we have a role today with this episode, , because. We have a role to educate buyers on why they need to talk with currency experts sooner. Okay. Because I don't think that people are thinking about this early enough on, in their journey, irrelevant of what their real estate agent says. I personally feel that they're waiting too long in the journey. I agree. So , if somebody comes and they're working with us here at WL Costa Properties and they come and we're talking about everything from, you know, their budgets to their requirements, all of those things we're putting them in contact with, with legal services. They're, they understand very early on that the need to work with a lawyer Yes. But they don't always understand in the same priority level that the need to start thinking about protecting. Their money and working with currency companies. Yeah. So if we make an introduction to one of our clients, to your team, and you know, our dedicated representatives that work with us who are excellent by the way, who we've built up amazing rapport with over the years, what can a buyer expect to receive from currency direct in terms of service from day one?

Speaker 2:

Well, , we explain our services, as I mentioned earlier. We find out what it is they need to do, what stage of the process they're at, you know, if they're still at the point of looking. Mm-hmm. We'll talk to them about their budget and show them , a way of sort of what your options are in terms of pre-booking a rate or. We'll keep in contact if you want to convert what you have so far until the right property comes up. People do leave it too long. Yeah. I don't need to do this until I found my dream property. Yeah. No, you should be thinking right now.

Sandra:

Yeah.

Speaker 2:

I, I've had a few clients that I've dealt with that have been super proactive. Mm-hmm. So much so two years prior to even looking for a property and believe me. They got the best deal they could possibly get because they used our tools, our assistance. Yeah. To forward plan., The other thing that's hugely important is, I mean, we have five offices just in the cost of El Soul. Yeah. We have over 25 in Spain, and of course we're on five continents, but we have a team that are present to meet your clients. Mm-hmm., I know myself, if somebody said, just give me your half a million Euro check, , I'd be like, , I think I want to see a little bit more first. So they can put a, a face to the name. Yeah. They can see that we're established. Our credentials are impeccable. Our security of funds is. Extreme., But they still like, have, have that personal touch. Of course. And all of our team live here. They're not based somewhere else in the world. They've all got bank accounts, had dealings with the bureaucracy in Spain. Yeah. Banks buying properties, selling properties. You can't get better experience than that. And. As I said earlier, that's trying to pass on our wisdom, shall we say. Yeah., To help them avoid any pitfalls in the purchasing process. Absolutely. And we're not only there for that, but. Some people may have a mortgage, so we can still help them with that. We have a multi-currency debit card, so they can actually use that, not only for their bills here, but if they're going away on holiday, just because you're maybe having a holiday home in Spain or moving to Spain, it doesn't mean you're always going to be there. So we've got flexibility. Yes. We also have IBANs for our clients. Mm-hmm. And very shortly we will have a direct. Debit facility. Okay. Which means our clients don't, in fact, need a bank account in Spain. Mm. And they won't be paying all these horrible. Bank charges. Mm-hmm. I mean, even as a resident. Mm-hmm. I'm shocked at what I have to pay. Yes.

Sandra:

And that's excellent when it comes to further down the line when they buy. Yes. And they have to start considering things like paying their community fees and all of those things, which is a massive advantage. It is. So the features and benefits that you're offering to your clients as well as the services. I don't think that people understand that there's such a variety of features and benefits that they can have by using, , a company like yourselves. So it's, it's incredible. So really, really good. So, you know, we need people to start thinking about this sooner. I think that's, that's definitely for sure., You are an expert in this field. You run a successful team over here, you know? When we talk about what's happening like with currency right now, I know you, you talked a little bit about earlier in terms of, well, the euro is strengthening, , can you guys share kind of any insights with us or give us any expert advice,, in terms of what, what do you see happening with currency right now? And I know it's a big question.

Speaker 2:

I can give you a very honest answer if I knew that. I'd be sitting on my yacht sipping champagne. I love it. What, what we do very simply is we, obviously, we monitor the markets for our clients. Mm-hmm. So. Brexit is a prime example. We knew that whatever happened, there was gonna be a substantial movement between the pound and the Euro. So as an example, we set up a lot of our clients that were selling properties on what we call a limit order.

Sandra:

Okay?

Speaker 2:

And what that is very simply is the client says, okay, this is the ideal rate that I want. It's not available at the moment, but should there be any volatility in the market, our system automatically buys it at that rate. Okay? Whether it's four o'clock in the morning or. The offices don't have to be open. Okay. We use that to great advantage during Brexit because of course at five o'clock in the morning when the result came in, the pound went down, but within an hour it had already started increasing quite substantially. So a lot of our clients were able to take advantage of that.

Sandra:

Yeah.

Speaker 2:

Equally, the buyers were sort of saying, you know, there could be, if Brexit happens. But that's the issue. We, we know what could happen if it goes that way and what could happen if it goes that way. But until we get the result, of

Sandra:

course

Speaker 2:

we can't predict it. But we, we can allow our clients the freedom to choose Yeah. To say, right. Okay. I'm gonna keep in touch with you. Mm-hmm. I'll let you know how it is before this major event. Mm-hmm., They also advise them if there's any specific data coming out that might impact on their currency transfer. Which is a lot more than any bank does. Of course.

Sandra:

So you are taking your informed advice Yes. From your own research internally, and you're advising clients on potential outcomes and you're doing the work for'em, essentially when they're asleep. Exactly. So you know, that isn't a service that, as you correctly say, you get with banking facilities, it's usually more of a service that you're getting with a private financial advisor, but you have to incur. You know, often large feeds to avail of that type of personalized service. Exactly. Yeah. So that's a massive, massive bonus.

Speaker 2:

And it's something that clients should use because you know, if you're going to the doctor and the doctor advises this is what you should do for your health, you have to think of your money the same way. Of course, it's the health of your money. Mm-hmm. And as I said before, everyone wants to get the most, the best bang for their buck. And why not do that, but let somebody do the hard work for you?

Sandra:

Amazing. Amazing. So. In your expert opinion when it comes to buyers?'cause I, I, I, I really feel passionately about buyers hearing the message that we're trying to say here today. Where do you feel that buyers often get this piece wrong?

Speaker 2:

As we spoken about previously? They leave it too late. They think they don't need to do anything until such times as they found the dream property or even signed a, a purchase contract., They don't always listen to recommendations to use. A currency company because, I don't want to generalize, but particularly older people, you can understand they've worked with banks all their lives. Yes. It's what they know and they trust them. So it can be difficult, but. There's such a huge saving to be made.

Sandra:

Yes.

, Speaker 2:

They sometimes would pick a company that, not saying there's anything wrong with the company, but they don't, for example, have the specialized knowledge that somebody on the ground does. Okay. And they need to be informed, not just take a punt, because as we said, there's nothing worse mm-hmm. Than I've got X amount of sterling to convert for my dream property. Oops. The rates dropped like a stone. And now I can't afford to buy that property. Yeah. So it, it's talking to them., Some people that I work with say, oh, I find it very difficult to introduce it. Okay. Which is strange because like you guys mm-hmm. It's part of your service. Yeah. You, you're doing what's best for all the clients. Mm-hmm. Whether they're buyers or sellers., And for me, I just sort of say, you know, have you thought about how you're gonna get your money over to Spain if you find the

Sandra:

right property? Absolutely. We feel so passionately about the service that you guys provide. We actually list you on our websites and promote you in our newsletters to our clients because we know how important it is for. Art lines to have a good experience and we know what can happen when they don't get it right. Yeah. So, , as you correctly say, it's, it's a benefit to them, , it's really advantageous to them as part of their process.

Speaker 2:

But also we are well aware people like you that are recommending us. We're, we're not only looking after the clients, but we're representatives of you also. Sure, sure. You've very kindly shown your recommendation to your clients. Mm-hmm. So. We would never jeopardize that relationship that you have with your client. We always make sure that the client has all the information. Absolutely. And you know they're happy with the process. Perfect. That's what it's all about.

Sandra:

Amazing, amazing. So again, I think we've covered some of this earlier, but I want to go back and it again in case anybody hasn't heard the message. When it comes to a buyer protecting their budget, how do you recommend that people stay protected by using. A service like currencies direct, for example?

Speaker 2:

Yeah, that's a a good question. Also, when you're dealing with a bank, for example, as you probably are aware, in the UK a bank account, you're only protected for up to 85,000 pounds per person, per account. Mm-hmm. Here in Spain it's a hundred thousand Euros. Okay. Because of our regulations and our security of safeguarding of funds, we only work with segregated client accounts. Okay? So that means. We can't use our client's money to operate our business. We can't speculate with it. Okay. In fact, their money is safer with us than it is with a, a general bank. Wow. So that's really important for people. Mm-hmm. They're afraid, , I'm sending this money here,

Sandra:

and they are, you're, you're really right about that. And. Yeah, that that does confuse me sometimes. But again, maybe it's back to that point that you mentioned earlier, it's almost that old belief of if the bank tells you to do this, it be right, you should do it. It's that kind of hierarchical perception. Yes. You know? But actually when you say that out loud, 85,000 per person in today's world, yes, it's a lot of money. I'm not taking that away, but. In the scheme of things, it's, you know, it's not compared to having a service with yourselves where it can be protected regardless. Exactly.

Speaker 2:

Yeah., And the other things they need to do is look at realistically how they can be helped with a rate, even if it's something as simple as, look. We have a a rate alert system. So for example, the client says, ideally I would like this rate sterling to euros or sterling to US dollars, whichever currency. Yeah. And we can put that in the system for them and it will notify them when that rate's available.

Sandra:

I like that.

Speaker 2:

That's good. But where you have to be careful is sometimes, you know, it can happen in the middle of the night.

Sandra:

Yes, of

Speaker 2:

course., Or the clients might be out shopping or doing something that they're not paying attention. So one of our dealers would try to get in contact with them.

Sandra:

Okay.

, Speaker 2:

So that's one way of seeing what's happening with the market. And as we discussed this forward contract, is the limit, A limit order? Mm-hmm. Our, our aim is not only to make sure the client gets as much as they can for , their currency, but to make sure that they know what they're up against and they're prepared.

Sandra:

Yes.

Speaker 2:

Rather than just saying, well, today's good. Oh yeah. By the time it comes to four weeks, it'll be the same. Yes. And then being bitterly disappointed or. Even more let down completely. Yeah. And perhaps having to wait until they can earn some more money to buy that green book. Absolutely.

Sandra:

And that's devastating when that happens. I've

Speaker 2:

had clients that it's not really, it really

Sandra:

is, you know, they,

Speaker 2:

they were on such a tight budget.

Sandra:

Yeah.

, Speaker 2:

And they were heartbroken. Yeah.

Sandra:

It is devastating. And, and in the world that we're living in right now. We've also seen more of that lately. Yes. You know, and , especially it, it's even more devastating when many of these things can kind of be prevented with a little bit of forward planning. Yes. Wow. So lots to think about. Yes. Is there anything that you'd like to share with people watching that we haven't had an opportunity to cover? Prepare

Speaker 2:

yourself well in advance. Mm-hmm. Don't leave it to the last minute. Mm-hmm., Make sure your money's available the way you think it's available. Yeah. Make sure when you're using a currency company that your funds are safe. Yeah. A hundred percent safe. Ensure that the company you're working with is licensed to offer you. Complete services, not just a part of it. And speak to us early so we can help you.

Sandra:

Yes, absolutely. That's really, I think that's really the message of the Red Thread message coming through this. Speak early., To avoid disappointment or things that absolutely could have been prevented. Absolutely. But this has been so helpful. I think it's been really clear. Really simple, practical advice for anyone thinking of buying in Spain right now, particularly if they're coming from a zone outside of the EU and they need to start thinking about currencies and how they're gonna manage that topic., Absolutely. Really, really, really, really good. Now, for anybody that's watching at home and. This episode has resonated with you if you are going to be buying a property in Spain in the near or far future, and currencies is a topic that you need to consider. You can find all the information that you need about currency direct on our website. www.wlcostaproperties.net. Head over to the resources section. You'll find , a tab for currencies direct themselves where you can actually enter in your information and one of their dedicated account managers will actually call you back very, very, very quickly. So it's a great service., You have multiple offices here on the coast. Yes. So people can actually pop in and see you. In person

Speaker 2:

along the Costa Delal, for example, we have Ben Madina, Ola Novan, Lucia and Esno.

Sandra:

Yeah. So they can pop in and have a face-to-face chat as well., If they are popping by in the area, because we know often people like to have that face-to face discussion as well, which is, and we like to see them too. Of course you do. Amazing. Thank you for being here today. I know you're a busy lady. I really appreciate the clear advice. It's been fantastic. And if you at home watching have enjoyed this episode, remember to like and subscribe so that we can bring you more videos just like this one. Thank you for stopping by. I.