A 1031 exchange is a great way to save money on the purchase of a new investment property when selling another. However, a 1031 exchange is a complex legal procedure with specific steps that must be followed sequentially in an exact order to qualify. Can a title company do a 1031 exchange?

Title companies are typically known for…managing titles! Title companies are the go-to for title searches, which can identify liens, back taxes, covenant issues, as well as people who may have a stake or claim to the property before it transfers hands. Title searches are a key step in the home-buying process because they can uncover issues before they become legal or financial burdens. Title companies are also known for issuing title insurance. Purchased with a one-time premium, title insurance protects buyers against costly title issues that may not show up under a title search.

Meanwhile, a 1031 exchange allows investment property owners to defer their tax obligations from the sale of a property. Real estate holdings held for longer than a year are taxed as long-term capital gains, so the appreciation in value over the course of ownership can face a sizable tax bill. So long as the capital gains are used towards the purchase of another like-kind investment property, a 1031 exchange allows investors to cash in on tax benefits and lower their federal tax bill.

So, can a title company do a 1031 exchange? Absolutely! In fact, title companies are a great choice for handling 1031 exchanges. A title company can serve as an escrow officer for the transaction, as well as a Qualified Intermediary. Title companies are keenly aware of the ins and outs of real estate transactions, and can guide you through the intricacies of documenting your 1031 exchange from beginning to end to ensure that the IRS will not have questions.

In addition to title searches, insurance and 1031 exchanges, title companies can also serve as escrow agents and closing agents. If you are in the market for a full-service title company in the Pensacola area, Clear Title is here for you. Our expertise is unrivaled and we strive to make the home buying or selling process as smooth and stress free as possible. With three conveniently located offices, Clear Title is your clear choice for title, escrow, closing and 1031 exchange services. Call our offices today, or visit ClearTitleNWFL.com to speak with one of our professionals.

Pensacola: (850) 361-4029

Pace: (850) 994-3838

Pine Forest: (850) 202-8518