If you’re thinking about doing a 1031 exchange, you don’t want to drop that bombshell on your title company the eve of the closing. How much lead time should you give your title company in a 1031 exchange?
Don’t Wait Until the Last Minute
By waiting until the eleventh hour when everyone’s already got their documents set up and prepared in a certain fashion, if you throw a curve ball and tell them that you want to do a 1031 exchange at the last second it’s going to create some drama and disruption for a lot of parties involved in the transaction.
The best advice is to get your 1031 exchange set up with the intermediary well in advance of the closing so that the closer is aware of what’s needed and can get the extra 1031 documents circulated and signed by all of the parties well before the closing.
Smooth Closing Process
We still get calls from the closing table from folks that didn’t know that they needed to get their 1031 set up in advance. We can have a fire drill, prepare the documents quickly and get them out when needed, but my advice is to take the time and get it set up well in advance so that you have a smooth signing ceremony rather than a chaotic closing.