A 1031 exchange advisor is an important professional who plays a critical role in the success of a 1031 exchange process. These professionals specialize in providing guidance to clients who want to defer taxes on their investment property sales. However, not all 1031 exchange advisors are created equal. Some advisors have the experience, knowledge, and skills to help clients navigate the complex 1031 exchange process, while others may not. To ensure that you get the best advisor for your 1031 exchange, you need to be well-informed. In this blog, we’ll be providing you with some insightful tips that will help you select a competent 1031 exchange advisor.
Look for experience: Your 1031 exchange advisor should be experienced in handling similar transactions as yours. You can start by checking the advisor’s track record of handling 1031 exchanges. Ask for references and make calls to those references asking about their experience working with the advisor. Ensure the advisor has in-depth knowledge of tax codes, the real estate market, and other legal requirements that are specific to 1031 exchanges. Experience is key when selecting a 1031 exchange advisor, so choose one that has successfully closed lots of 1031 exchange transactions before.
Certification: Professional certification is another essential factor to consider when selecting a 1031 exchange advisor. Although certification is not a legal requirement, it indicates that an advisor has passed rigorous exams and has met a high level of professionalism. Some of the certifications that you should look for include: CCIM (Certified Commercial Investment Member), CES (Certified Exchange Specialist), and EA (Enrolled agent).
Service fees: 1031 exchanges can be quite expensive if not done correctly. Therefore, before engaging an advisor, ensure to ask how the advisory fee structure works including any retainers on fees. On average, most 1031 exchange advisors base their fees on the value of the transaction, while others may charge hourly, flat-rate fees, or a combination of these methods. Also, ensure to compare and contrast the fees with other advisors to find a fair price.
Communication: Communication is key before, during and after the 1031 exchange process. A good 1031 exchange advisor should prioritize communication at all times and have a good working relationship with their clients. A competent advisor keeps their clients informed and provides regular updates on the process. Their communication style should be tailored to the client’s needs and preferences. A good 1031 exchange advisor should also be available to answer any questions clients may have.
References and Reviews: The best 1031 exchange advisors have a track record of success. Therefore, it is essential to look for references and reviews. Ask for client references and check them thoroughly. Additionally, search online reviews on their website, Google reviews, and other online sites. Look for any patterns in these reviews to find the best 1031 exchange advisor that matches your needs.
Conclusion:
Selecting a 1031 exchange advisor is an essential decision in the 1031 exchange process, as the stakes are high. It is essential to choose an experienced and certified advisor who prioritizes communication and has fair and transparent fees. Checking references and reviews are great tips on selecting the best advisor for you. By following these tips and being diligent in your selection process, you’ll be able to find the best 1031 exchange advisor to help you with your transaction, and ultimately save you the most money on taxes.