Dubai to Marbella: the €50,085 gap
- Villa purchase in Marbella
- Buyer in Dubai
- AED to EUR
- Completion on Friday
What happened
You're buying a €2,000,000 villa in Marbella. You live in Dubai, and completion is on Friday.
You call your bank and ask what it costs to send the money. They tell you €25.
You send €2,000,000, and on Wednesday the notary tells you €1,949,915 has arrived.
You're €50,085 short, about 2.5% of the price, and nobody lied to you.
Where the money went
Your bank in Dubai has no direct relationship with a bank in Marbella, so the money goes through a US bank first. Dirhams become dollars, then dollars become euros. You pay a spread twice, and you chose neither conversion.
Two banks in the middle take a cut while the money is travelling, and the Spanish bank charges you again when it lands.
| Transfer feeThe number your bank quoted you | €25 |
| Exchange rate spreadHidden inside "converted at 1.0623", charged twice | about €40,000 |
| Banks in the middle, and the receiving bank in SpainTaken off the amount along the way | about €10,060 |
| Missing at the notary | €50,085 |
Why nobody saw it coming
A fee is a charge. Your bank does something for you and bills you for it. It shows up on your statement, because it's a separate event.
A spread is a price. Your bank isn't charging you to turn dirhams into euros, it's selling you euros. It bought them at one price, sold them to you at another, and kept the difference.
You can't see a spread on a statement, because no separate charge ever happened. The wine shop doesn't print its margin on the label.
So your statement says "transfer fee €25", and that's true. Then it says "converted at 1.0623", and that's also true. Your €40,000 is living inside that second number.
This is also why "no fee" transfers are usually the most expensive thing you can do. The fee really is zero. The rate is where they earn.
The deadline doesn't move
The notary doesn't care why the money is short. He needs €2,000,000 on Friday.
So you're wiring the difference from somewhere in 48 hours, or your completion moves and the seller starts taking calls again.
Ask these before you send
- What's the mid market rate right now, and what rate am I actually getting?
- What's the total cost as a percentage of what I'm sending?
- Who pays the fees of the banks in the middle, me or the person receiving?
Most people have never heard of that last one. Every international payment carries a code, OUR, SHA or BEN, and it decides who absorbs the charges along the way. If nobody asked you which one you wanted, you were on SHA, and the notary received less than you sent.
Moving money for a property?
If you're buying abroad, or your clients are, send me the details and I'll tell you where the cost is hiding before the money leaves.
An illustrative case built on a €2,000,000 purchase funded from outside the euro area. The amounts show how the costs add up, not a real client's statement.