YES YOU CAN !! You can close on the purchase of your replacement property first and then sell the property(ies) you want to divest yourself of. This type of transaction is called a Reverse Exchange. It is very complicated and the costs associated with a reverse exchange are much higher than the normal forward exchange.
In the typical reverse exchange, the Qualified Intermediary takes title to the new property you want to purchase, in the form of what we call an EAT (Exchange Accommodation Titleholder). If everything is completed in a timely fashion, when you sell your relinquished property(ies), the funds go to the EAT, who then transfers title of the replacement property to the taxpayer and subsequently transfers the funds received from the sale also to the taxpayer. As I said, it is complicated, but can be done.
One of the many reasons a taxpayer would want to do a reverse exchange is they might not want a competitor to own the piece of property across the street, or they found the property of their dreams for their business, but haven't sold the property they presently occupy. Obviously, there are numerous other reasons to proceed with a reverse exchange. For more information on reverse exchanges, go to our website at: www.bayview1031.com.
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