WHAT AGENTS NEED TO KNOW

"WHAT RESIDENTIAL REAL ESTATE AGENTS
NEED TO KNOW"

§1031 tax deferred exchanges provide real estate agents a tremendous opportunity to increase commissions! Conversely, by not understanding a few key exchange concepts, real estate agents often can unknowingly incur increased liability. We have provided answers to questions frequently asked by residential real estate agents.

Q: WHEN SHOULD THE INTERMEDIARY BE CONTACTED?

A: As soon as the contract is signed. Asset Preservation, a leading national Qualified Intermediary, does not charge a cancellation fee if the transaction does not close.

Q: WHAT LANGUAGE SHOULD BE ADDED TO THE PURCHASE AND SALE AGREEMENT?

A: The language below is satisfactory in establishing the Exchanger's intent to perform a tax deferred exchange and releases the other parties from costs or liabilities as a result the exchange:

"Buyer is aware that Seller intends to perform an IRC Section 1031 tax deferred exchange. Seller requests Buyer's cooperation in such an exchange and agrees to hold Buyer harmless from any and all claims, costs, liabilities, or delays in time resulting from such an exchange. Buyer agrees to an assignment of this contract to Asset Preservation, Inc. by the Seller."

Q: WHO SHOULD I CONTACT TO SET UP AN EXCHANGE?

A: You can call either National Headquarters toll-free (800) 282-1031 or your local Division Manager.

Q: WHAT SHOULD BE DONE SO I DO NOT INCUR A POTENTIAL ADDITIONAL LIABILITY?

A: Every time you list any property that may have been held for investment (i.e. rental house, second or vacation home, duplex, land, etc.), recommend that your client talk to their legal and/or tax advisors about the benefits of a §1031 exchange. You can also suggest that your client call an experienced Qualified Intermediary. Exchanges have been a part of the tax code since 1921. As a licensed professional, a real estate agent can't afford to say "I don't know anything about exchanges because I specialize in residential."

Q: CAN EXCHANGES BE SET UP AT THE LAST MINUTE?

A: Yes, as long as the transaction has not closed. Asset Preservation can successfully convert a sale into an exchange. Documents can be prepared and faxed to the title company within a matter of hours.

Q: IF MY CLIENTS HAVE MORE QUESTIONS, WHERE CAN THEY GO FOR MORE INFORMATION?

A: Call Asset Preservation's toll-free number or visit our Internet site: http://www.apiexchange.com/.