STEP 1: Before you close, YOUR ACCOMMODATOR WILL NEED A COPY OF YOUR SALES CONTRACT BETWEEN THE SELLER (EXCHANGER) AND THE BUYER AND COPY OF THE PRELIMINARY TITLE REPORT. With any sale of real property, you should have a written contract between the parties involved. The Real Estate Purchase and Sale Agreement and Receipt for Earnest Money is most commonly used when working with a Realtor. Ask me for my Sample Language which you can include on your Purchase and Sale Agreement).
Once you have a sales contract, your Realtor (hopefully me!) will open an escrow with a Title or Escrow Company of your choice, and the Accommodator will prepare your Exchange documents and have them ready and waiting at the Title or Escrow Company when you arrive for your closing (of course you can review the documents ahead of time).
STEP 2: MAKE AN APPOINTMENT WITH YOUR ESCROW OFFICER FOR SIGNING OF YOUR ESCROW DOCUMENTS. We will instruct your Escrow Officer on how to complete this "Phase I" of your Tax-Deferred Exchange. She or he will forward your Exchange Funds directly to your Accommodator upon recording of the Deed. Your Accommodator will invest your funds in an interest-bearing account at a federally insured financial institution.
STEP 3: COMPLETE YOUR IDENTIFICATION NOTICE AND DELIVER TO your Accommodator. The day your Deed records is the day your 45-day identification period and your 180-day exchange period begin. You can identify your replacement property or properties in writing anytime up to midnight of your 45th day. Make sure your Accommodator receives it by mail, by fax or by delivery by your deadline! No Exceptions!
STEP 4: your Accommodator WILL NEED A COPY OF YOUR REPLACEMENT PROPERTY PURCHASE CONTRACT AND PRELIMINARY TITLE REPORT. When you are ready to purchase your replacement property or properties, she/he again will need a copy of the written Contract and copy of the Preliminary Title Report. You must complete this "Phase II" of your exchange anytime before midnight of your 180-day exchange period deadline. Through your Title or Escrow Company, Accommodator will disburse your Exchange Proceeds for your purchase.
Now that you have purchased your replacement property and used all of your Tax-Deferred Exchange Proceeds, you have successfully completed your Tax-Deferred Exchange. Your Accommodator will then send you a Final Exchange Settlement Statement and a check for the interest you earned while your exchange proceeds were being held.
This is a simplified version of the tax-deferred real estate exchange
process. Every tax-deferred real estate exchange may vary due to particular
circumstances.
Back to 1031 Exchange Main Page
Millie Fine
CENTURY 21 Aadvantage Gold
Toll Free 1-888-449-FINE
Home office 1-702-363-5599
E-Mail Millie!
millie@milliefine.com
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