The Exchange Bond - now developing overseas

Exchange Insurance (ExCo) has announced that it is extending its popular financial product – the Exchange Bond - to property developments overseas.

The Exchange Bond - a financial guarantee that acts as an alternative to the traditional cash deposit – has already been adopted by a growing list of 200 homebuilders at a vast number of sites throughout the UK and in Ireland.

When buying abroad many buyers hold back because they are reluctant to part with large sums of money to developers overseas, especially on developments which may be several years off completion. By accepting the Overseas Exchange Bond the developer is able to overcome this fear. And the buyer is reassured because if the developer fails to perform, the buyer has still retained most if not all of his deposit money.

ExCo has recently appointed Lucas Zachara as Head of Overseas Business Development to drive forward sales of the Overseas Exchange Bond. His appointment reflects the steep rise in the number of enquiries for the Exchange Bond from developers and intermediaries outside the UK as well as overseas property buyers. ExCo has developed these contacts with developers in Italy, Spain, Cyprus, Portugal and Hungary.

For developers seeking to promote sales of their new properties, the Overseas Exchange Bond represents a unique and powerful marketing incentive. It directly addresses the fear of committing large sums of money as deposits in overseas locations and yet enables the developer to secure the important sales commitment.

Lucas Zachara, Head of Overseas Development, says: “We are very encouraged by the positive response given to our preliminary ventures overseas and, as a result, several new developers have already approached us to include the Overseas Exchange Bond as part of their marketing package. Interest is growing daily from developers, intermediaries and buyers alike.”

In return for the guarantee given to the seller, the buyer pays a premium for the Exchange Bond. But many developers also refund the premium on completion as part of the sales incentive package.

The Exchange Bond is a cost effective, simple and safe alternative to the traditional 10-20 per cent cash deposit normally required, freeing a buyer from the burden of an often substantial cash deposit to secure a property purchase. The buyer then simply pays 100 per cent of the agreed purchase price on completion, which means that they continue to have control and use of funds that would otherwise be tied up as a deposit – sometimes for several years. These funds can be used elsewhere to generate a further return instead.

Exchange Insurance has agreements with leading developers in many regions of the UK including George Wimpey, David Wilson Homes, and Higgins Homes. The Exchange Bond is also available in Ireland where Exchange Insurance is working with various developers.

ExCo is a specialist European general insurer which is authorised and regulated by the Financial Services Authority.

Please visit exchangebond.com for more information.