Tips for Choosing the Right 1031 Exchange Accommodator.
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. Here are some few considerations when you are choosing a 1031 exchange accommodator.
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. You can start by inquiring how many clients they have worked with in the past as well as exchange processes that they did and they have successful results. Also, the company and the accommodator that you choose should be able to help you understand your situation and the various options you have.
You may want to ask for a list of references and delaware statutory trust in order to help you evaluate the experience and capability of the accommodator. See if the references are satisfied with the services provided or whether they have complaints against the exchange accommodator. This will help you narrow down your list of potential 1031 exchange facilitators.
Before choosing a 1031Gateway accommodator, it is advisable to ask where your funds will be held. The facilitators should have various reliable options for holding your funds. A safer option is to insist for the funds to be kept in a segregated qualified trust to ensure that no money can be withdrawn without yor authorization. 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.
Make sure that the company you are considering is a full-time 1031 exchange facilitator. 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. Besides, a reputable firm will not hesitate to provide you with a copy of their internal control which protects your funds from theft by employees.
Request for a copy of the insurance coverage and verify that the qualified intermediary has adequate fidelity bond insurance coverage. Apart from protecting you in the event of theft, the insurance coverage will also protect you from responsibility tax claims due to their negligence.
You should always evaluate the exchange company you are considering and ensure they have a good reputation in the market. You may want to choose a facilitator that has membership in a recognized professional organization such as Federation of Exchange Accommodators.
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