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CLOSING SERVICESResidential Mortgage Closings Residential Mortgage Closings - Goodhue County Abstract Company assists buyers, lenders and real estate agents with sales and refinances for any type of mortgage - whether it is a first mortgage, junior mortgage, home equity loan, or reverse mortgage. Services include:
Cash or Contract for Deed - Unique situations arise when there is no lender or real estate agent involved in the transaction. Goodhue County Abstract Company will advise both the buyer and seller to the steps that need to be followed in order to complete the conveyance of the property. Services include:
Commercial Closings - The added complexities of a commercial closing require the knowledge and experience to adapt to ever-changing circumstances. Our commercial service professionals assist land developers, attorneys, commercial loan officers and others to underwrite all types of complex commercial real estate transactions. Services, in addition to those listed in Residential Mortgage Closings, include:
Closings for our commercial department have included industrial facilities, office and apartment buildings, churches, farmland, golf courses, motels and subdivisions. Services include:
Early Start/Priority Pictures - Because of restrictions in some mechanics lien laws, title insurance underwriters require that NO work of any kind be performed on the property before the mortgage is recorded. Goodhue County Abstract Company works to protect lenders against mechanics liens by promptly recording the mortgage after closing and taking priority pictures. In the event it is found that work has begun on the property we will assist our clients in applying for early start approval from the underwriter. Services include:
For Sale by Owner Once you have found a buyer and obtained a signed purchase agreement, Goodhue County Abstract Company can help buyers and sellers through the closing process.
IRC 1031 Tax-Deferred Exchange Goodhue County Abstract Company can work with you and your tax advisor to select a Qualified Intermediary to guarantee your transaction is processed accurately and your funds remain secure. Five Ways to Exchange:
The Most Common Exchange: The most commonly utilized tax planning strategy available to investors is the delayed exchange. A delayed exchange results when there is a time delay between the sale of the relinquished property and the purchase of the replacement property. The delayed exchange provides investors up to 180 days to purchase replacement property once the relinquished property is sold. And, the use of a Qualified Intermediary is required to facilitate a valid delayed exchange. The first step is the sale of the relinquished property. Before closing on the sale of the relinquished property, the exchange retains a Qualified Intermediary that prepares an exchange agreement, assignment of sale contract and closing instructions to the closing agent. DETERMINING THE PROPER VESTING. To correctly exchange your investment property, you must hold title to the replacement property exactly as you held title to the relinquished property. Simply stated, with few exceptions, the person or entity beginning the exchange must be the same person or entity completing the exchange. Properties that Qualify for IRC 1031 Treatment IRC § 1031 provides that, to qualify for tax deferred treatment, the relinquished property must be exchanged for replacement property that is like kind. Like kind means similar in nature and character notwithstanding differences in grade or quality. The fact that any real estate involved is improved or unimproved is not material for that fact relates only to the grade or quality of the property and not its kind or class. As such, raw land held for investment may be exchanged for single family rentals used for a trade or business or any combination of the following:
While the definition of like kind is stricter when it comes to personal property - investors may still take advantage of tax deferred treatment in an IRC § 1031 exchange in the sale of investment personal property. The personal property exchange can be utilized to relocate a business, to upgrade equipment, or to streamline production by replacing outdated technology and machinery with more efficient models. Like kind personal property includes:
Glossary of Terms ACCOMMODATOR or QUALIFIED INTERMEDIARY or FACILITATOR - A person or other entity who assists the Exchanger to effect a tax deferred exchange by holding the exchange proceeds and acting as the principal in the sale of the relinquished property and purchase of the replacement property. The accommodator/intermediary/facilitator cannot be the taxpayer, a related party or an agent of the taxpayer. CAPITAL GAIN - Generally speaking, this is the difference between the sales price of the relinquished property - less selling expenses - and the adjusted basis of the property. CONSTRUCTIVE RECEIPT - If the Exchanger has control over the exchange proceeds or property during the exchange period, he may be deemed in constructive receipt. If the Exchanger actually or constructively receives the exchange proceeds or property, the exchange will not qualify under IRC § 1031. DEFERRAL - The capital gains tax is not paid until such time (i.e., it is "deferred") as the Exchanger sells the replacement property without engaging in another tax deferred exchange. EXCHANGE PERIOD -The time allowed for the Exchanger to acquire the replacement property in a delayed exchange, or the time allowed to dispose of the relinquished property, in a reverse exchange. In a delayed exchange, it starts on the day the relinquished property is transferred or in a reverse exchange, it starts on the day the property is acquired by the EAT. It ends on the earlier of the 180th day after the transfer or if no automatic extension is applied for then on the day the Exchanger's tax return in due - often April 15th if the Exchanger is nor an entity on a different fiscal tax year. IDENTIFICATION PERIOD - Within 45 days from the close of the relinquished property; the replacement property must be identified in accordance with one of the three adopted rules. In a reverse exchange, the relinquished property must be identified within 45 days from the acquisition of the replacement property. LIKE KIND PROPERTY - Refers to the nature or quality of the property the Exchanger gives up or receives in the exchange, such as real property for real property. Real property does not have to be similar in use, such as raw land for raw land. Raw land may be exchanged for any other real property that will be used in a trade or business or held for investment. Real property located in the United Stares and real property located outside of the United Stares are not like kind. Personal Property must be either the same General Asset Class or Product Class. RELINQUISHED PROPERTY (Property Sold) - The property given up by the Exchanger in the 1031 exchange transaction. This portion of the exchange transaction is some- times referred to as Phase One. REPLACEMENT PROPERTY (Property Bought) - The property the Exchanger acquires in a 1031 exchange or Phase Two of the transaction.
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