in house RE agents: If I'm the buyer, are there any cavets with ...

[LordSnailz]

We found a house this weekend and everything looks great, the only thing is that the sellers put on the couter offer that we assist with the 1031 exchange.

Are there any cavets with this? We asked them to put that buyers are not responsible for any cost associated with the exchange, is that enough?

Also, once we're in contract can we get 100% of our deposit back if we find something in the inspection reports? Our RE agent assured us that it's no problem getting the whole deposit back.

Any inputs is greatly appreciated!

 

[Nuriko]

Huh? So let me get this straight, you're buying the 'house' of someone who is doing it as a 1031 (ie trading up to bigger and better somewhat free of taxes)? And how do they expect you to assist with the exchange? Pays some of the fee for a 3rd party (never done it myself, but the prices I see quoted for such a service usually run $500-1000) I suppose it would be possible to for you to make some sort of allowance account (put the money in to be held by a 3rd party) for it and to keep your name off of the 1031 paperwork.

So, was this a rental house for them? B/c to my understanding you can't do a 1031 on a primary personal residence. That being said, I hope you got a home inspection done by someone who knows what they are doing. The other big thing with 1031s is the time factor, to be a tax free exchange for the person doing the exchange they have to locate replacement property in 45(?) days and close on it within 180(?) days of the sale. I'm not absolutely sure about the number of days, but it is something to consider.

As far as getting the deposit back if the inspection shows anything. That should be in the contract/offer you made to the seller. If not...

 

[JulesMaximus]

PM me. My wife is a realtor in San Diego, CA. She offered to help but is busy this minute.

 

[Kelemvor]

Make the offer contingent upon an Home Inspection. I always laugh when I see the House Detectives show on TV and people just bought a house that needs $20,000 in repairs. Too stupid to get it inspected BEFORE they bought it....

 

[JulesMaximus]

Originally posted by: LordSnailz
We found a house this weekend and everything looks great, the only thing is that the sellers put on the couter offer that we assist with the 1031 exchange.

Are there any cavets with this? We asked them to put that buyers are not responsible for any cost associated with the exchange, is that enough?

Also, once we're in contract can we get 100% of our deposit back if we find something in the inspection reports? Our RE agent assured us that it's no problem getting the whole deposit back.

Any inputs is greatly appreciated!

How did they ask that you assist with the 1031 exchange? That's pretty general. Do they have another property that they are in the process of buying? Are there any contingencies on that deal? The 1031 exchange really has nothing to do with the home inspection or your deposit. It is a timing issue for the seller, he has 45 days to identify a property he wishes to buy (for tax purposes) and 180 days to complete the transaction (IIRC).

In CA the default for inspection is 17 days so within that time you could get your deposit back. After that there is a chance that you could lose it depending on the circumstances.

Obviously, this is not advice per se since I do not have access to your offer or the counter offer.

Edit-I think you need to have your agent get more information from the seller regarding the exchange.

 

[LordSnailz]

Thanks for the reply guys. The seller is doing the 1031 exchange and yeah the property was a rental. So I think everything is on them, we just had to make sure that we were not responsible for the fees. Thanks again, much appreciated.