Hopefully, someone can help. About a week ago, I sent a fair amount of money to Brazil via a bank wire transfer to buy a property.
Let’s call it $100,000 just to make it easy. It turns out that you need all this documentation just to release the money into my wife’s bank account. After putting it all together, the Bank here in Brazil tells us that the buy rate for brazilian reals is 1.67.
So my $100,000 would buy 167,000 Reals.
Their sell rate is 1.79. Meaning I would need to pay 179,000 Reals to buy $100,000 US.
The spot rate on the exchange markets today is 1.739.
http://finance.yahoo.com/q?s=USDBRL=X
with a bid of 1.739 and an ask of 1.740.
That means that the bank is charging 4% BEFORE fees to exchange the money.
I told them to send the money back to my US account.
There has to be a better way.
I’ve been Googling and calling different places for the last 2 hours. Forex.com said of the brazilian Reals “we don’t deal with exotic currencies like that”. Exotic? It’s the 5th largest country on the planet!
All of the Currency exchange specialists seem to be based out of the UK (maybe it has something to do with the term?). I called HiFX and the guy on the phone says “I know we have it on our website, but we don’t deal with brazilian Reals.”
WTF?!?
The idea of being raped for thousands of dollars just to exchange my money makes me sick to my stomach. It’s not that $5,000 or $10,000 one way or the other changes my quality of life, it’s just the principle of the matter. I worked hard to make this money and paying that much to exchange money is just wrong on a gut level.
I need a solution.
If you can find me a solution so I can exchange $100,000 or more US dollars for Brazilian reals in one transaction for something much closer to market rates (like around 1.73ish) and without a hefty commission, I’ll send you $100 via paypal.
Update: The best way I found was to send the money to the name of the seller (with the sellers CPF) to Banco Brasi. The Seller does not have to have an account there and the exchange rates were more than 1.5% better than at other banks.
12 Responses to “Buying Property: How to exchange US Dollars For Brazilian Reals”
Hate to give you possibly bad advice, but whenever I have needed to move money (in much smaller amounts than this) between currency, I find that PayPal actually is the most economical option. Not sure about your case, though.
Jason
I’m actually really curious about how you went about finding a place to buy in Brazil. Is your wife Brazilian?
My wife is Brazilian but that didn’t help as much as one might expect in finding a property. Really, the only way to know what you are buying is to go to brazil and look at properties.
To trade at market rates open a forex account - the only I can suggest is to google http://www.google.co.uk/search?q=forex+broker - I didn’t use it personally not having that much money. It’s wise to read the wikipedia arcticle about it http://en.wikipedia.org/wiki/Foreign_exchange_market. And you would have to ask how to pay in and withdraw in the best way - an international bank transfer in Brazilian reals might still eat you considerable percentage of money.
For my smaller purposes I was OK with http://www.lcctransenvio.com/ which is cheaper than: PayPal, bank transfer, Western Union, Money Gram when sending to Poland. They send to Brazil as well of course.
Usually xe.com is the best for high dollar stuff but they don’t handle BRL just Mexican Pesos for all of LatAm.
Since none of the usual houses handle BRL, your best best may be with a good international bank. HSBC has somewhat reasonable prices if you open a Premier account in the US and Brazil both. $100k in one account gets you “premier” - you can always park some there a little while then close it out after you transfer later.
If I send from 1 paypal account to another I have to pay the transaction fee of around 3.5%. I don’t see how I can exchange currencies within an account and ask for a check to be sent in a foreign currency.
I went to HSBC today and do have a premier account with them in the US. I don’t have an account here in brazil yet but I asked about their rates.
They told me 1.678 to 1.76 was their spread. Slightly better than Caxia but still a pretty hefty spread.
QuadZilla, I’m a Brazilian living in Australia and always need to move money back and forward. I believe the best services are from a company called “Cotacao”.
seguro(dot)cotacao(dot)com(dot)br/index (dot) asp
I always deal with them and Theres no better rates, and you always can bargain for better deal.
The only;y problem they ask you a ton of docs, but worth your money,
Give a try.
Cheers
Lucio
Dude, just use Western Union to send money and they’ll payout in the local currency.
Also, I used xoom.com to send money to Peru recently. Not sure if it works for your situation but you might as well check it out.
Have you checked if the Brazilian bank allows you to open a USD account. I can open accounts in all kinds of currencies at my bank and they can’t stiff you on the exchange rate if it’s not there 
Then, if you REALLY want to save money, talk to the seller and convince them to accept payment in USD at around spot rate. If they’re buying a next place with USD, they might go for it. They might even go for it if they aren’t; you never know
Quad.. Here’s the best way.. Contact a brazilian store in US and send them the money (USD). They will make a deposit (Reais) in your wife’s account in Brazil with a much better rate.
It’s needless to say that it’s not legal and you may have problems with tax return. But that’s the best option (regarding currency exchange). I recommend you to make many small transfers just to be safe. In this case you have to buy the property and make the registration with a much lower value, so you won’t have too much trouble with IRPF.
HSBC, Itaú, Banco do Brasil and others have the same kind of policy. If you want to make it all legal, check with Receita regarding something called “Carnê Leão”, you may have to pay much more than you expect in taxes. 
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The banks are keeping a huge spread because they’re scared shitless that they’re going to get stuck with US dollars that are worth even less. I don’t know that you’re going to find a better way in the current market turbulence.
Then again, buy a property in Brazil now and that 4% difference will be chump change in the face of the appreciation you will see on your investment.