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Getting your money across - safely

Transfer of funds

At the time of the compromis de vente, you need to arrange transfer of funds to pay the deposit of (usually) 10% of the net purchase price. From this point on, if you withdraw from the sale, you could lose your deposit – unless it is for one of the reasons listed in the “conditions suspensives”. Plan ahead of the acte authentique to transfer the balance of your payment (in Euros) to the notaire’s account in time for the signing date. The house will not become yours until all the funds required (including mortgage funds) for the house purchase and all associated fees have been sent to the notaire’s bank account. [See the Resources section].

Beware of exchange rate risks

If your funds originate from come from a non-euro country, beware that exchange rates can put your purchase in real danger. We strongly advise you to buy insurance against this risk from specialized currencies dealers. Use a foreign exchange company to transfer the funds for your purchase. This will normally give you a much better deal than using a high street bank.

Here’s an example. Say a few months back, each dollar bought 0.85€. So to buy 10,000€, you needed $11,800. Within two months, the rate had dropped to 0.80€ - so suddenly, the cost of buying the same 10,000€ had jumped to $12,500. That’s a $700 hike. Apply that to the purchase of a 400,000€ home: that’s a $28,000 price change.

To get protection: you should buy a forward contract. You buy an option allowing you to buy the euros you will later need at the time of completion (hence “forward”) at the exchange rate of the day you buy the option. By doing so, you “lock in” the exchange rate – and make the risk described above disappear. The cost of this protection is built-in the exchange rate services provided by service providers [See the Resources section].

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