Many people ask how much it costs to do a 1031 exchange. That question is complicated because it depends on the services rendered and various other factors.
Price Should not Be Your Sole Criteria
As with any service, you can always find the low cost leader. I caution people to not have cost be the sole criteria because QIs (Qualified Intermediaries) are often not regulated or licensed by any state authorities. Anyone can call themselves a QI. If you aren’t confident that your QI is reputable and qualified, who knows where you’re sending your funds.
The small vanilla single 1-to-1 exchange where you’re selling one relinquished property in a standard deferred exchange and acquiring one replacement property might cost between $850.00 and $1,500.00. It depends on what level of service is being provided and the complexity of facilitating the exchange (how many properties are involved, etc.).
Safeguard your Funds
The most critical piece is to make sure that the safeguards are in place to protect your funds in the interim between the sale of your relinquished property and the purchase of your new replacement property. Both small and large QIs have been known to abscond or file for bankruptcy. When that happens, you may lose your money and have your exchange fail.
The primary consideration should not be cost. The most important thing is to safeguard the funds and to work with a reputable QI. Don’t choose the low cost option. Go with the tried and true QI that provides consistent and professional service. You may pay a little more but the peace of mind your receive is worth every penny.
Start Your 1031 Exchange: If you have questions about the cost of your 1031 exchange and safeguarding your 1031 exchange funds, feel free to call me at 612-643-1031.
Defer the tax. Maximize your gain.
© 2017 Copyright Jeffrey R. Peterson All Rights Reserved