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Hiring the Right Broker for a 1031 Exchange

    Man with a beard in a grey suit adjusting his black polkadot tie looking off to the right of the image. Text to his left says "Hiring the Right Broker for a 1031 Exchange"

    This conversation follows all disciplines and has been for some time. Anytime anyone is considering a transaction involving real estate they should have their own qualified representation.

    With that said, a week doesn’t go by, where I learn about an investor who is in the middle of an exchange without the representation of a qualified broker.

    As a matter of fact, more than half of the referrals I receive are to investors who are already in their 45-day inspection period. While I’m certainly grateful for the referrals, I can’t help but feel mortified that this scenario continues to happen.

    Herein Lies My Quest and My Why

    Too many exchanges fail every year and there is no good reason why an exchange should fail except under extreme circumstances. More on that later…

    Choosing the right agent/broker to represent you in a 1031 Exchange depends on many various factors including your specific needs and the specifics of your transaction. At the very least the following should be considered.


    While at the surface level an exchange transaction is a real estate transaction most agents/ brokers are probably more than capable of completing. However, navigating an ID process while writing multiple offers on multiple properties including advising on all possible exchange options your agent/broker choice should have multiple exchange transactions completed.

    A dentist is qualified to do a root canal, but an endodontist does them every day. You do not want an ordinary real estate agent/broker who has completed sale transactions and a handful of exchange transactions, but an agent/broker who specializes in representing exchange buyers on a regular basis.


    Someone who has the experience of navigating multiple offers at the same time while also considering how each piece will fit into the proverbial puzzle of your exchange. Many exchanges require strategic planning and execution, and this experience only comes with regular exchange completion.


    Look for a broker with extensive experience and expertise in facilitating 1031 Exchanges. They should have a solid understanding of the tax code and the complexities of the exchange process, like the identification rules, for instance. Knowing the difference between the 3 Property Rule and the 200% Rule could have a significant impact on the outcome of an exchange.

    Market Knowledge

    You want someone who is plugged in 100% of the time and has access to the investment market inventory on a daily basis not a broker who only looks when they are able to, while meanwhile handling a heavy schedule of landlord meetings, tenant tours and marketing a huge leasing portfolio.

    Network & Connections

    If your agent/broker is relying on internet based multiple listing platforms such as CoStar or Crexi, you’re in trouble. A broker with a broad network of industry contacts can help you identify suitable replacement properties, because of their relationships with regional and national brokerages as well as qualified intermediaries, suitable lenders, and national third-party vendors.

    Communication & Accessibility

    No other real estate transaction has a deadline, let alone two. Clear and open communication is absolutely essential throughout the exchange process. You must demand that your agent/broker is responsive, accessible, and committed to keeping you informed at every stage of the process.

    Compatibility & Trust

    Trust your gut when evaluating potential brokers. Pick someone you feel comfortable working with and who demonstrates a genuine interest in helping you achieve your investment goals versus just trying to complete another sales transaction.

    The 1031 Exchange is one of the most powerful tools available to preserve and build multi-generational wealth. However, if not planned for and executed properly, the tax consequences can be quite costly. You want to be absolutely sure you are aligned with a real estate professional that has the above listed qualities to ensure you maintain and keep what you have worked so hard to build.

    If you are an investment property owner who is interested in a no obligation, private consultation, please visit, or contact James Bean of SVN-Rich Investment Real Estate Partners, CA DRE# 01970580, at 805-779-1031 or email at

    If you are an agent/broker, I am happy to discuss strategies with you on how to best serve your next listing client in preparing them for a successful exchange. Please visit the site and click on the Agent’s button located at the top right-hand corner of the Home Page!

    Don’t know what certain terms mean?

    Click here for a Glossary of Terms: 

    Please stay tuned and follow me on LinkedIn, Twitter, Instagram & Facebook @1031BrokerJames while keeping a look out for our exchange-specific content and coming soon, our YouTube Channel!

    All information is deemed to be accurate, and not advice. All investors/taxpayers should consult their CPA, tax attorney and investment advisors.