What You Need to Consider When Choosing a 1031 Exchange Facilitator
If you are a real estate investor and you are closing on a sale of your property, it is important to choose a competent qualified intermediary who will meet your needs. Below are tips for selecting the best 1031 exchange facilitator.
When choosing a 1031 investment properties exchange accommodator, you need to ensure that they are qualified and have depth experience on how to process the transactions. A 1031 investment properties accommodator who has been in the business for long will know how best t handle the exchanges including the most difficult ones. Ask how many exchanges they have completed in the past five years and this will help you determine if they are a reliable choice. They will also be able to help you understand your situation and guide you on making the right options.
You can evaluate the experience and performance of the company you are considering by asking for client references. See if the references are satisfied with the services provided or whether they have complaints against the exchange accommodator. With this information, you will be able to establish if they are right for you and your business.
Before choosing a qualified intermediary for your 1031 exchange, you need to ask where your exchange funds will be held. The facilitators should have various reliable options for holding your funds. Make sure to select a facilitator that will hold your funds at a segregated escrow account or a segregated qualified trust account. Be vigilant of firms that does not allow you to choose the bank of your choice or one that does not agree with your preference.
In order to get the best exchange services, you need to ensure that you select a full-time exchange firm. Tax laws keep evolving, hence, a full-time facilitator will be able to help you understand these laws so that you can use them in your situation.
You should make sure you are dealing with a firm that always conducts a pre-employment screening on its employees as a measure to secure your funds. This is an effective measure of minimizing risk of loss of your 1031 exchange fund. It is also advisable to get a copy of internal control that ensures no employees have control of your funds.
Similarly, make, sure that the company has been insured and bonded in order to safeguard your 1031 exchange funds The insurance is also critical so that you will not have to pay taxes because of the firm’s negligence.
Lastly, ensure that the 1031Gateway exchange company has a good reputation in the industry. You may want to choose a facilitator that has membership in a recognized professional organization such as Federation of Exchange Accommodators.