Selling property in the Sunshine State
It’s been more than ten years since the global financial crash devastated the US property market and wreaked havoc with property investors both domestic and international. In the years leading up to 2008, Florida in particular was a beacon for British buyers looking to invest overseas and as often as not, combine that investment with a fantastic holiday escape option. Two bonuses for one outlay – why wouldn’t you?
For those who managed to ride out the crisis with ownership intact, the markets have over the last three to four years recovered significantly enough for many to consider liquidating their investment. It seems timely then to weigh up the pros of cashing in on a revitalised property market, with prices in many areas reaching those of the pre-2008 economic crash, against the pitfalls of selling abroad – fluctuating exchange rates, negotiating unfamiliar financial restrictions and the like.
The right time to sell
How do you really know when it’s the right time to sell? Aside from your own personal circumstances that could make a sale necessary, there are other factors that should apply to pretty much any overseas property sale.
First and foremost, the property market in Florida has been on the rise with prices in many areas seeing a 4-5% annual growth rate – not to be sniffed at – even if they still haven’t quite reached pre-crash values. Coupled with a strengthening dollar value against the pound (yes, because of Brexit – but we’re not opening that can of worms here!) and the value of many properties has actually increased when transferred from dollars into pounds.
Let’s take an example to show how this works:
- If you bought a property in Florida in 2007 for $250,000, the cost to you in pounds sterling would have been roughly £125,000 with an exchange rate close to $2 to £1.
- If you sold that property today for, say, $230,000, it would net you around £180,000 with the exchange rate sitting at $1.29 to £1 (at the time of writing).
This shows that even though a property may have dropped in value in the US market by $20,000, the pound sterling value would still have increased by around £55,000 thanks to that huge currency fluctuation.
Get good guidance on currency risk
Exploiting the experience and knowledge of a good foreign exchange specialist like Clear Currency is a great first step in understanding the ins and outs of any overseas property sale.
First up, Clear Currency can give you historic pricing data that helps identify what the exchange rate was when you bought the property, so you know your exact outlay against the dollar value of the property. With this data they can then help work out what (if any) gains you’ll likely make thanks to those changes in the currency values (exchange rate) coupled with the improving Florida housing market.
All this information is hugely advantageous and puts you in a strong position to set your sale price. It gives you the power, if you’re in no great rush to sell, to set a high price and happily wait – but equally it means you could set a far keener price for a much faster sale while still knowing you can clear a healthy profit.
Don’t just use them for guidance
Guidance is great, but there’s no need to stop there. A good currency specialist will also walk you through the process of repatriating your funds back to the UK, negotiating unfamiliar practises, rules and hidden pitfalls.
Clear Currency has helped hundreds of people do exactly that – buying and selling in Florida as well as the rest of the world. And just like many countries, the US presents its own unique quirks and oddities that can easily trip you up and cost you dear if you don’t know to look out for them. After all, it’s not just about making money – it’s just as important to keep things as stress and hassle free as possible.
Pay attention to the details
Without the right advice and leaning on the experience of dedicated overseas specialists – from foreign exchange to property sales – it’s all too easy to miss the small details that can have a huge impact on the success of your sale. The US market in particular is rife with hurdles and blockers than can really take the shine off your experience. Here, then, are our top tips to bear in mind if you’re selling your property in Florida.
Plan, plan, plan. Selling a property is often cited as one of the most stressful things we ever do – and adding a foreign country into that mix will only push those stress levels higher. Planning for every eventuality then is key, which usually means leaning on professionals for advice and help – trust us, you’ll recuperate any costs of these services in avoiding delays, maximising sale prices and minimising exchange costs.
This often means working with a properly accredited AIPP property specialist to get the right advice for your sale – their help is typically free and always trustworthy (our favourite combination!). It also means working with a foreign exchange specialist like Clear Currency to streamline the actual process of getting your money from the US to the UK quickly, cheaply and efficiently.
Break out the calculator and don’t be afraid to use it. What can seem intimidating – two currencies, different buying and selling prices, and fluctuating exchange rates – is actually much more manageable if you break it down into bitesize sections and use a calculator to check (and double check) your figures.
It’s important to make sure you’ve covered every cost. For example, realtor sales commission in the US is eye wateringly high compared to what we’re used to in the UK: typically it’s around 6%. Ask your realtor for a sample Closing Disclosure statement that outlines all your seller costs in advance of the sale so you’re properly prepared, and then make sure to compare it to the official statement that you’ll get the day before final settlement of funds.
Get your dates and details right. Make sure to plan around your closing date so you’ll be available and ready should any last minute hiccups arise, whether that’s a problem with funds, a legal hitch over closing the deal remotely or even something as simple as your realtor being ill. Distance can amplify even the smallest problems.
Beware the Patriot Act! A piece of post 9/11 legislation designed to hinder the financial channnels of terrorism, the Patriot Act can also have a big impact on how you repatriate your sale proceeds to the UK as well. It essentially places restrictions on how you can transfer funds out of the US if you’re not physically there to pick up the money yourself. Some banks can help you circumvent it but it’s vital to check beforehand so you’re not caught in financial limbo (especially if you need those funds urgently).
Clear Currency is AIPO’s official currency exchange partner and specialises in helping people move their money across borders quickly, cheaply and without hassle.
To find out how they can help with your Florida property sale or any other currency exchange need you might have, call the team on +44 207 151 4832 or email firstname.lastname@example.org
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