1031 exchanges have become quite a popular wealth building tool in the real estate industry, and if you desire to upgrade your commercial building while differing taxes, this might be the perfect solution for you. However, even if you might have already found someone who desires to swap their property with yours, you will still need an impartial third party who can supervise the entire process, this being a legal requirement of the program. To make sure the 1031 tax deferred exchange process goes well, you will need to resort to someone reputable and reliable, and to manage doing that you should follow a few selection tips. Here are the things you should consider when you are trying to find a Qualified Intermediary for your property swap:
To speed up the entire exchange process, and to make things as easy and inconvenience-free as possible, choosing a qualified intermediary with enough experience in the industry is necessary. Experience can usually influence the way this process goes, so this is not an aspect to overlook. See for how long they have been in business, and ask them about how many clients they have helped with property exchanges. An experienced pro will also have the technical depth and expertise to handle everything by the book, and prevent you from dealing with any legal complications later on.
Funds security is one of the most important considerations to have when choosing this type of professional. Because you probably do not want to take any risks, and desire for your money to be protected throughout the entire exchange process, knowing the Qualified Intermediary uses an account for maximum security will give you peace of mind. This is something you should ask the third party when you first discuss. Is the account used FDIC insured? What other information can they give you about this aspect? Fund security and transactional transparency need to be carefully thought through.
Last but not least, you need to make sure the person you choose knows how to communicate effectively with you throughout your entire collaboration. If this is your first property exchange, you probably do not know much on the topic, so having someone explain to you each step properly and making you understand how things work will be useful. To receive answers to any misunderstanding or question you might have, resorting to someone with great communication skills will be useful. You can figure out this aspect upon your first discussion.
If property exchanges have caught your interest, and you desire to benefit from this type of real estate opportunity yourself, and have already found the perfect building for the exchange, the last step is hiring a third party to handle the process. Finding the perfect option might not be as easy as you have thought, so researching the topic with care will be necessary. The tips mentioned above will help you decide on the right Qualified Intermediary for your needs, so make sure to take them into account.