Around this time of year, many potential Canadian and other Foreign National buyers once again begin thinking about buying a winter retreat here in beautiful, sunny Palm Springs. With property prices in the Palm Springs area still hovering around prices we saw back in 2003, the year is shaping up to be another banner year for value minded Canadians.
To prepare and inform new buyers, we have created a Buyers Guide for Canadians on our primary website to help clarify the real estate buying process here in California. While it’s written especially for Canadians and other Foreign Nationals, it can be used advantageously by all buyers. We’ve tried to answer the many questions that arise when searching for, purchasing, and maintaining a property in Palm Springs. Finding the right Palm Springs property for you and negotiating the best price are both things that I as a knowledgeable, experienced Realtor in California will do for you.
There is an additional step you can take to maximize your purchasing power. Since all real estate purchases here must be funded with US dollars (USD), you will at some point have to make the conversion from Canadian dollars (CAD) to US dollars (USD). To accomplish your goal of converting at a good currency exchange rate, first you establish a desired target exchange rate as a part of your overall purchase strategy. This is not to suggest that you try to “time the market.” You can, however, plan for some “best” rate as you develop your purchase budget.
With the CAD vs. the USD fluctuating in value up to 1% or more daily, a considerable savings can be realized by tracking the market for your “best” conversion rate. Once your “best” target rate is reached, you can execute the currency conversion, locking in the good rate. You can work through your own bank to make the conversion in this way. Or there are service companies that can do this for you. The alternative to this strategy is that you initiate the currency conversion at the time you are required to wire the funds to make the payment. In this case, you simply take your chances as to the rate.
In the last twelve months the USD/CAD has fluctuated from a low of $0.9988 (Feb.20, 2010) to a high of $1.1033 (Sept.3, 2009), so the difference is about 10.5%. If you had been contemplating buying a $300,000 condominium here in Palm Springs during that specific period of time, the potential translation gain/loss at the extremes I’ve cited could have been worth up to $23,815 CAD – a significant amount! Even if the translation gains/ losses were only half those amounts, the savings to be realized in the conversion would have been considerable.
As you begin to plan the purchase of your Palm Springs winter retreat, I encourage you to consider a currency exchange strategy as part of your budgeting plan. Talk with your local bank about establishing a plan. Or alternatively, you can also consult a Canadian firm such as Globex that specializes in the foreign exchange process.