1031 (contingency, appraised, clause, investment)

[caroline3]

We have been on the market for a few months and we just got an offer. The buyer is going to purchase our house via a 1031.
Is it good or bad for us?
He needs to close on his inverstment property first. If he doesn't close on this house, what will happen, will we keep the earnest money? We don't have a contingency clause on our contract (on the sale of his investment property) but it is written that the buyer will purchase the house via a 1031.
Thanks for your help.

[2bindenver]

It is a lot like a normal closing. Except that the buyer will not touch the funds from the first property an Exchanger will hold the funds and then transfer the money needed to fund your closing.

Is his property already under contract?

As far as what will happen, it depends on exactly what is written in your contract with him. It is certainly assumable that if he doesn't close on the first property then he cannot complete a 1031 tax deferred exchange.

[caroline3]

Yes, his property is under contract.

[2bindenver]

If I was your broker, I would monitor the status of the transaction.

How close to closing are they? Inspected? Appraised? Loan Approved?

Is the exchange company local, or at least nearby?

[caroline3]

They are closing end of this week.

Thanks for your answer.