The real estate market remains hot, which is very advantageous to sellers. To help avoid the stress sometimes associated with identifying replacement property within the 45-Day Identification Period, Exchangers are encouraged to look for replacement property once their relinquished property is under contract with a seller. No doubt, the 45 days go by quickly, but using the time between going under contract and the actual closing typically gives you 45-60 days before the timeclock starts clicking. This timeframe is before your 45-Day Identification Period ever starts, which gives you that extra time to navigate the identifications rules.
Another piece of advice is to enter into an Agreement of Sale for the purchase of your replacement property before the end of your 45-Day Identification Period. With properties selling so quickly it is best to have your “desired” replacement property “locked up” so you don’t have to worry about someone else snagging it out from under you.
If you enter into an Agreement of Sale before the sale of your relinquished property and pay the earnest money deposit, the earnest money deposit can be reimbursed to you when the replacement property closes assuming you have enough funds in your exchange account.
Our Exchange Team is always available to answer any questions and help keep your exchange process simple for you.
