Assisted Sales by Foreign Currency Direct
Through our 12 years of doing business in the currency market we have heavily focused on the foreign property market. In recent times we have noticed a number of trends from clients looking to buy and sell property so we have designed some unique tools to assist agents complete more property sales. These include the following:
- Aid a Faster Sale
Regardless of how much a property price has fallen, buyers are asking for that little bit more off the price. Aid a faster sale is designed to help estate agents win business when working with sellers that are digging their heels in when negotiating further price reductions.
Anyone who bought Euros prior to 2007 could make 11% to 27% when converting Euros back into Sterling although many clients do not realise this or factor it in to their final decision. So, an example of using us to aid a faster sale could be that you have a seller whose property price has fallen from €250,000 by 20% to €200,000. A genuine buyer makes an offer of €190,000 but the seller is not willing to drop the price to meet this. Once again it’s very rare to speak to an individual seller who follows the currency market and is aware of how much they have made/lost on the currency market since the time of purchase.
Using the currency markets you can easily calculate how much your client will gain when they convert their Euro’s back into Sterling and subsidise these gains against any losses on the property value.
For example, if a client bought the property in October 2000 the average GBP/EUR exchange rate achieved was 1.6994. At the time it would have cost £147,110.74 to buy the €250,000 property, since October 2000 the Euro has strengthened by 26.7% against Sterling.
If your client transferred €190,000 back into GBP at today’s rate of exchange of 1.2250 they would achieve £155,102 and make a total gain of £7,991 not a loss of €60,000.
- Market Watch – A New Way to Sell
Exchange rates change every 2 seconds and a one per cent movement in a day is not uncommon. This could mean that over the course of a day or two the currency market may have helped sell a property for you!
Imagine you have a buyer with a strict budget of £100,000, you’ve found the client their dream home and they are ready to make an offer. It’s only now that your client is looking at “how much does it really cost.” The property is valued at €120,000 and the GBP/EUR exchange rate is 1.1850. Unfortunately this means the property is £1,265 over budget, at this stage most buyers will ask you to try and reduce the price to meet their budget.
Our traders will double up the chances of you winning the sale by using Foreign Currency Direct’s “Market Watch” service. Send us the details of the property purchase and we will notify you and the client when the currency market brings the property within budget.
One contract type we use to help clients that are working to a tight budget is a limit order. This allows a client to select an exchange rate they want/need to achieve to be able to afford the property in question. There are no charges or deposits required to place a limit and once the currency market reaches the desired level (in the earlier example that would be 1.20) the system automatically completes the GBP/EUR transfer for the client.
- Rejuvenating Old Leads
Foreign Currency Direct plc can help agents generate more sales by rejuvenating old leads:
We can offers our affiliates’ clients FREE advertising online with no fees or obligation to trade as an additional service. A member of our team would register their property online and contact the client accordingly. This allows us to work as a second source of information for our agent and increases the chances of the seller transferring funds through Foreign Currency Direct plc. Of course we will provide a written guarantee that we will not pass your leads on to any other estate agents or third parties.
If you have a database of old leads we have the man power and the inclination to call through these clients to see if any of them are back actively in the market. Any clients we come across from this would be sent straight across to you so you can ensure you get the sale. We have a number of agents that have taken us up on this and had success from it.
- Triangle of Information
In our experience of working with referring partners we have found that the more information that is shared the more likely the sales process will run smoothly. All of our traders here at Foreign Currency Direct are highly geared towards sourcing both positive and negative information from referred clients and relaying that back to our agents.
So for example; if a client has any reservations about the area, property or even the agent we will look to subtly find out what may hold them back from buying so our agents can address the situation and increase their chances of winning a sale.
In our experience the more information agents supply us with and the more information we source for our agents the smoother the buying/selling process becomes for all three parties and the more sales that are won.
- Using the Currency Market To Close More Sales
It’s our job to help agents win business by working with their clients or supplying positive market data they can use to boost consumer confidence and create urgency. Private clients and large organisations ask Foreign Currency Direct plc to keep them up to date with key market data and use our analysts as a source of independent information.
Recent information that agents have found useful include;
The US property market was in a similar position to Spain and France last year, property prices were down, consumer confidence was low and the banks were not lending. An initiative from the FED saw them pump money through the banks into new mortgages and short term loans. This led to an increase in confidence, consumer borrowing hit a 10 year high, unemployment figures dropped and mortgage lending increased. As a result the property market went up by over 9.9%. Europe has recently followed America’s lead meaning we could soon be seeing an increase in mortgage lending and a rise in property prices.
Spain – Recently Spain’s credit rating was downgraded and the cost of borrowing rose. This was headline news in Britain and financial Armageddon was spelled out by the media. Several potential buyers walked away from property sales and agents across the board noticed a lull in client activity. Fortunately the mainstream media is almost always grossly biased making it very easy to discredit. On the day Spain was downgraded the Spanish banks held a bond auction. Your average person would not buy bonds, professional investors, governments and large companies looking for safety do. These professionals invested into the future of Spain for 2- 10 years, highlighting this simple and easy to use information helped our agents to calm buyers and win sales.
- Calculating Currency
In the final stages of negotiations offering an extra 1% saving can be the difference between winning or losing a sale, if you follow the markets or work closely with your Currency Broker you can offer clients a saving without reducing a property’s value, the market moves by over 0.5% – 1% most days! For example, on Monday the GBP/EUR exchange rate is 1.23 and your client asks you “how much does it really cost” at the time €250,000 will cost £203,252. Your client is interested in making an offer and asks you to call them the following day for a yes or no. By the time of the call Sterling has strengthened by 1% against the Euro to 1.2425 and you can now tell your client the property will now cost £201,207 and they have saved £2045.
Calculating currency is incredibly easy to do once you know how! We would be happy to thoroughly explain to all of your sales staff how to calculate currency movements and more importantly how to use it to their advantage.