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Starting An Exchange
Do not sell your property, have a settlement and then call to
perform a 1031 exchange, as it will then be too late!
Contact Eastern 1031 immediately upon deciding to perform an exchange. Eastern 1031 works closely with all parties related to
the exchange, including the exchanger's attorney (if used), the person conducting the settlement and the real estate agent of the
exchanger. All parties involved receive all documents for review, input and questions prior to the settlement of the "Relinquished
Property" (the property the exchanger is selling).
The exchanger should instruct their real estate agent to include an "Exchange Cooperation Clause" as an addendum to the contract / sales agreement of the "Relinquished Property" (the property the exchanger is selling to the buyer). An example Exchange Cooperation Clause: Buyer hereby acknowledges that it is the intent of the seller to perform an "I.R.C." (Internal Revenue Code) "Section 1031 Exchange" (tax deferred exchange). The seller's rights under this agreement will be assigned to Eastern 1031 as the Qualified Intermediary for the purpose of completing this exchange. Buyer agrees to cooperate with the seller and Eastern 1031. The only involvement that the buyer will have in the exchange process is to sign the Assignment Agreement at settlement.
It may also be suggested that the Realtor give the buyer an Eastern 1031 brochure with the contract / sales agreement, just in case the buyer is not familiar with a tax deferred exchange. The Exchange Cooperation Clause is not required, but is recommended.
Eastern 1031 will ask for the name, address, phone and fax numbers of all parties involved, and a copy of the contract / sales agreement. This is all Eastern 1031 needs to prepare documentation for the exchanger. An Exchange Form is available on this web site for your convenience.
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