Sometime real estate transactions fall apart on some detail that nobody has predicted, often concerning the money to be paid by the buyer to cover not only the purchase price but also all the closing costs that belong to him, plus any possible lending fee.
When selling to international buyers, the transaction often happens with a cash payment, since the buyer has money available personally or because he has secured a loan in his own country: it is increasingly difficult to get US banks to lend to US citizens, much less to foreigners.
But there are three factors that play an important role when the buyer transfers his money to the title company from his European account.
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When he goes to his European bank to order the transfer, the buyer has to specify the exact amount of US dollars that he wants to transfer and give immediate authorization to his bank to perform the conversion between euro or pounds and dollars at the rate available at the moment.
If he forgets to give his consent, the European bank will transfer the corresponding amount in euro or pounds to the intermediary US bank, the one that acts as a middle agent between the European bank and the final US bank holding the escrow account. There are always at least three banks involved.
The intermediary bank will hold the money waiting for the authorization for the converting it to dollars at a defined exchange rate. The authorization will never arrive because your buyer will know nothing about it and the money will remain floating for one or two months in the international bank system and the it will return to the original European account. And the closing will be impossible.
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The European bank wants to be paid an hefty fees for the transfer and the currency exchange, so your buyer has to have the money to cover also that (make sure he checks his bank fees ahead of time).
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For some strange reason the intermediary bank always collects an additional fee of approx $35 or $50 therefore the buyer should transfer just that much more money.
These simple concepts will allow you to avoid pitfalls and get to your closing smoothly and successfully.
Roberto Mazzoni
Please read more of my blog posts on my new blog that has been created to host all of my content and that will be kept updated regularly from now on. Commodoreblack.com was my first blog ever and I owe it my beginning in this beautiful blogging world, but with experience I learned that it was better for me ton create a blog that carried my own name. And I advise you to do the same if you ever plan to start a blog.
Tags: currency exchange, International Real Estate