1031 Exchange: The Eight-Week Checklist Before Your Close

The 45-day clock starts the day your property closes escrow. Everything that makes an exchange good must happen before that day — because the identification window does not wait for a late appraisal, a slow title search, or a surprise in the inspections. This is the practical checklist for the weeks before your close. It is tax context, not advice; your intermediary and CPA confirm the mechanics.

Eight weeks out. Know your equity and your basis. The amount deferred is a function of the equity you redeploy and the debt you replace, so the exchange is modeled before the marketing. Know the asset class you want to land in and the markets you will search. Start the replacement shortlist now — the inventory that lives off-market and in the intermediary's network is found in weeks zero through four, not in the identification window.

Six weeks out. Confirm the intermediary. A qualified intermediary is a licensed institution or attorney — never a friend or a bank account. Get the exchange agreement in writing and understand the funds flow: where the proceeds sit between close and the replacement closing, and what protects them if the intermediary's business fails.

Five weeks out. Run the exit-cap math on the top replacement candidates. Price and projected income set the cap you are locking in, and that number is the entire reason to exchange. Discard the candidates that fail the math before you spend a day of diligence on them.

Four weeks out. Identify the closing team for the replacement: escrow, lender or intermediary coordination, and inspection flexibility. A replacement transaction that cannot close inside the 180-day window is a candidate that fails the clock test regardless of the underwrite.

Two weeks out. Reconfirm the identification rules with your intermediary and your CPA for your exact situation — the three-property rule, the 200 percent rule, or the mix — and agree on the identification letters before the close. The deadline is calendar-based, and the paperwork should be drafted, not improvised.

The week of close. Designate who sends the identification letter and the backup method of delivery and confirmation. The clock starts at close; the identification is only as real as the paper you can prove was delivered.

And after every exchange closes — audit the result against the plan. The exchange that redeploys into a worse long-term asset than the one it sold is a tax win and an investment loss. Run the post-close review the same way you ran the pre-close math.

WCA helps 1031 buyers screen inventory and model the exit-cap math before the clock starts — the net-lease and NNN lane at https://williamscap.ai/services/net-lease-investments, and the free BOV at https://williamscap.ai/services/broker-opinion-of-value for both sides of the exchange.