We have written before on these pages about the biggest mistakes people make when buying property in Spain. Anything from not being clear on requirements to believing experts on Facebook (You can read the whole post here) One of the most important things to remember that we wrote about in that post is never to trust your bank in your home country if you are transferring funds from another currency into Euros and today we are going to tell you more about why including a new service that will save you even more. We are always looking to save people as much as possible.
How Your Banks Rip You At Both Ends
American banks are the worst. UK banks are not far behind. Other countries are a mixed bag, Swedish banks for example are usually excellent. Just to let you know though, here are the main ways in which banks can charge you for moving and using your money.
- Fixed charge for making an international transfer
- Exchange rate calculated at tourist rates
- Hidden charge added into the transfer process after sending (Often called processing fee)
- Receiving bank charges for taking the money from a foreign transfer
- Commission for emitting bank drafts to pay for property
- Commission for emitting OMF transfers direct to owners
- Even if you send the money to the notary rather than a bank to transfer funds to the owner the notary will have a fee for this service.
For years we have been saving people money on these costs by recommending you to use currency companies for moving money from one country to another, the savings are often astounding, especially when we are talking about large amounts of money being moved. Now though we have an excellent new way of even avoiding the need for a Spanish bank account on purchase via one of those currency companies (Though we will still expect you to open an account here for utility bills and more)
Currency Companies
Our favoured currency company for transfers into Spain is Currencies Direct. There are various reasons but the main ones are 15 years of experience with them, the presence of an office here in Valencia and their agreements with the banks for their clients to only get charged a "maximum" of 200-300 Euros for bank drafts (Usually less) for final payments.
However, clients sometimes resent the conditions from the banks including monthly fees for non-resident accounts, the requirement to contract "services" such as insurances from the bank itself and the lack of easy communications at times, especially when fees turn up in the account "by mistake" and it takes time to revert.
Last week I got a demonstration of the new system for payment from Currencies Direct which notaries are loving and is working really well down in the Costa del Sol especially when both parties involved in the transaction are foreign. Before looking at that though, let's look at how traditional payment systems work.
Traditional Property Payment Systems
There are two ways that properties are paid for in Spain and they both require the funds to be in a Spanish bank. The first and most traditional method, expected by many Spanish sellers still, are bank drafts. These are cheques from your bank which you hand over to the sellers at the notary. The notary witnesses the payment and the delivery of keys and signs the property over to the buyer.
The second method, more en-vogue in the last couple of years because it is quicker, is an OMF transfer (Order of Movement of Funds). Supposedly instant but in effect taking 15-30 minutes to banks within the OMF system (Not ING Direct for example, see our article here about that) OMF transfers are gaining popularity.
Both bank drafts and OMF transfers require a fee to the bank. Clients through Currencies Direct at La Caixa and Banco Sabadell have benefitted from limits on the costs of these drafts or transfers in the past but it is still a cost. Those buyers who have just walked into the banks without being a client of CD have walked out with really expensive bank drafts, up to 1.2% of the value of the bank draft in certain banks. OMF transfers are also charged at a percentage of the amount sent in many banks. It's often a truly ridiculous price for just pressing a key on a pad or printing out a bank draft.
The new system through Currencies Direct is just as quick or even quicker when both parties have a Currencies Direct Wallet. Most importantly though it is totally and utterly free to use. It doesn't cost a percentage of the transfer amount or a fixed fee. Equally your account from where the money is sent is a VIBAN (Virtual IBAN) with a Spanish prefix, ES, and two numbers, meaning it can be used for payments in Spain such as utilities and subscriptions. We are not saying it completely eliminates the need for a Spanish bank account as you may want or need one for business, to build up a credit history or mortgage payments* for example but it is definitely useful.
*If you are getting a mortgage to purchase then the bank giving you the mortgage will insist on you having an account with them to make the payments required on the day of the purchase.
How Currencies Direct Payment System Works
You sign up for an account with Currencies Direct. Ask them about their Property Pay system. They will create a wallet for you to deposit your funds. Obviously if your funds are in a different currency they will convert to Euros at the best market rates. Your money stays in your CD Wallet with no need to transfer it into your bank.
You can use this wallet yourself or you can authorise your legal representative to disburse the funds to the seller. To do this CD will require an authorisation to be filled in and you will need to give your legal representative access to your funds wallet. This is an excellent way of giving them access to your funds only, not to the rest of your bank account where you may have lots of money. The disbursements of funds are arranged beforehand for seller, notary, agent and whoever else you may need to pay as you can introduce the bank accounts that will be paid into, either another CD wallet wherere the transaction would be instant, or the Spanish bank account of the seller where the transaction is quick. Each payment requires an online signature to be actioned which you can do yourself or your legal representative can also do it. The PDF of the payment for the property is then sent to you to share with the notary to prove payment. The benefits are obvious.
Use Cases For These Transfers
An example of a use case is shown below from where both parties have a Currencies Direct Wallet.
How Much Can You Save?
Until now you could save up to 3% on the rate of exchange compared with the banks, lose the fees associated with the transfer and recption of the funds and save on the costs of bank drafts or transfers within Spain. Now you save by totally avoiding those extra final costs too. It really is a no brainer to be using a currency company. However...
Because there is a "however". Many people say "I'm using Wise, Revolut or any other number of challenger banks or services". You can and you will save money compared with traditional banks but the service from the currency companies specialising in these transactions is not only normally better and cheaper but also guaranteed. Currencies Direct for example is recognised by the Bank of Spain and has a licence to operate all over Europe and most importantly in all of the United States and the rest of North America. Your funds are safe!
I use Wise regularly but their rates and fees mean that larger amounts are more expensive and if a problem occurs good luck sorting it out, it recently took me a month to arrange something including a call to their head office in New York. I also use Revolut regularly for day to day costs but just like Wise they have no payment method that is generally accepted for large amounts and dispute resolution is glacial when a problem occurs (as well as blocking of accounts for spurious reasons). I wouldn't dream of using either for a property transaction here. Challenger banks like ING Direct are not members of the OMF community so cause problems regularly on payments and have no extensive branch network to sort problems out.
Other Currency Companies
We are not saying you must use Currencies Direct of course, heaven forbid, but as far as I know their Property Pay system is unique. However we have experience with Lumon and Spartan FX too and the service they have given to our clients has also been excellent and they have saved people a lot of money compared with using their own banks, especially our American clients. Neither have offices in Valencia itself but they do supply account managers for your money, Nicholas at Lumon and Michael at SpartanFX are our go tos, and they can provide you with the information necessary to make sure your funds arrive safely where they need to be before the purchase. Equally they have the required licences to operate in Spain which many currency companies don't.
The Key Lesson
Don't trust your bank in your home country whatever your relationship with them. They are corporate entities and their goal is to provide shareholder value not to give you the best deal when transferring funds out of your account. Many of them put any number of impediments in the way of your funds leaving your account especially if you want to transfer the money abroad. Once they know you are going they will give you the worst deal possible but smile while doing it.
Using a Currency Company means your transfer is usually national as opposed to international and therefore one of the costs, transfer to a foreign country, immediately disappears. The second cost, that being the rate that they give you for your Euros, is also eliminated as you transfer your Dollars, Pounds, Kroner or Bhat to the currency company's account in that currency and they transfer on from their Euro account to your designated account here or your wallet.
The Beach Bars Are Back
In the most important news to come out this week, the beach bars on the Patacona were reopened on Friday at 5pm but you already knew that because you follow me on Bluesky right?
Valencia's beach bars on the Patacona open this afternoon at 5pm. www.levante-emv.com/horta/2025/0... After a year where they didn't appear because of bureaucracy, they're back. See you at El Ocho soon right?
— Graham Hunt (@grahunt.bsky.social) May 16, 2025 at 9:24 AM
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The America's Cup in Valencia... erm No
Valencia was in the running to host the 2027 America's Cup but has actually pulled out meaning it will be the Neapolitan Mafia as opposed to the Valencian one (The PP) benefitting from the event. The reason given for pulling out was the DANA and the need to pull together to mitigate the effects. It'd be nice to see the local government actually doing anything to that effect but there you go...
We Were Featured in the Press Again
I was interviewed for the Daily Beast about the influx of Americans coming into Spain in the first quarter of the year. Numbers are up 57% year on year and there is one big orange reason for that of course. Take a look at the article below and follow me on Bluesky.
I got quoted again in the press. This time The Daily Beast all about people fleeing the US www.thedailybeast.com/trump-nightm... The nice people on the left are our clients. The a***hole on the right isn't but is responsible for many of our clients ;-)
— Graham Hunt (@grahunt.bsky.social) May 15, 2025 at 4:46 PM
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Canadian Flights Announced
Valencia will have its first direct transatlantic flights for over ten years this summer, and no, we don't have to go to the newly authoritarian USA, we can actually visit Canada and vice versa to and from Montreal. Visit the albatross that was the 1976 Olympic Games site, get confused by everyone around you speaking French and set off on a road trip just making sure never to turn south just in case you are packed off to El Salvador by mistake. Ride down to Toronto and the Niagara Falls from the North Side and flick the Vs at those looking from the other side while keeping your elbows up.
Property of the Week
This apartment is located on a street whose name derives from the fact that the millers guild used to be located here. You won’t be hearing the millstones or the millers hacking up their lungs from the wheat weevils these days though. In fact, this is one of the quietest streets in the old town surrounded by plazas, museums & the odd cathedral, and just as well as we are on the first floor here (as in one floor above ground-level) so no bars or restaurants to worry about, the plebs down around plaza de la Virgen can put up with that din.
So what do you get? A building that is around 150 years old (just look at that amazing stairwell), and a renovated apartment that is around 150sqm, in a neighbourhood where you don’t see apartments come on the market too often, an area where you can feel the history of the city around every corner.
And let me tell you that should you be thinking about spending only part of the year here, you will have a queue around the corner looking to rent this place from you so a nice option to make a little bit of a return on as well if you wish. Check out the photos at the link and the video here.
Read More
If you liked this post then take a look at some of our other posts about how to avoid making mistakes and how to save money when buying your own property in Valencia. Just click on the images below.
and another five star review comes in. You can read more here www.valencia-property.com/new/goog...
— Graham Hunt (@grahunt.bsky.social) May 15, 2025 at 7:48 PM
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