I just witnessed an attorney blow his client’s 1031. It was both shocking and sad. I found a great property for the buyer and secured it with an accepted letter of intent. The seller delivered all the due diligence materials instantly. We were off to a good start. However, the buyer’s attorney could not focus on getting the purchase agreement done and get his clients 1031 property safely under contract. I saw it coming early and offered to help the attorney sub out the work to someone that could get it done, but he refused any help. He was his own worst enemy. He was too busy to help his client. I even suggested to the buyer that maybe he should get someone else to help them, but he was not interested in changing attorneys.
Bottom line, this attorney lost his client over a million dollars by having the 1031 property identified not close. The seller had a hot property and moved on to another buyer that had an attorney that could get the deal done.
There are several ways to blow a 1031. This is just one of them. It’s sad when your own attorney does it to you. Lesson: Make sure your attorney can perform under the pressures of a 1031. A good attorney will not only insure that you have a clean transaction, but he/she can also help you save a ton in taxes.