The short answer
Very little changes on your side. You consent to the buyer assigning the purchase contract to its qualified intermediary, you receive written notice of that assignment on or before the closing as Reg. §1.1031(k)-1(g)(4)(v) requires, and the purchase money arrives from the intermediary rather than from the buyer's own account. The deed still runs from you to the buyer. The one thing to check is whether your property is already on the buyer's written identification list, because after their day 45 exchange funds cannot be spent on a property that was never named.
At a glance
| What you sign | A consent to assignment and a written notice of it, on or before the closing |
|---|---|
| Regulation behind it | 26 CFR 1.1031(k)-1(g)(4)(v): assignment plus written notice to all parties |
| Cost to you | None; the published clause promises no delay and no additional expense to Seller |
| Their hard stop | Midnight on the 180th day, or their return due date if that comes first |
| The deal-killer to check | Your address must be on their identification list once their day 45 has passed |
| Who you may hear from | You can be the recipient of their identification notice under (c)(2)(i) |
| Where the money comes from | The buyer's intermediary wires the closing agent; the deed runs from you to the buyer |
| If they buy before they sell | An accommodation titleholder takes title and may park it up to 180 days |
Three dates to ask for before you sign the contract
A buyer in a forward exchange has already sold something, and the calendar that governs their side started on that closing. Get the dates in writing at the offer stage rather than a week before closing.
- The date their relinquished property closed, which is day zero for everything else
- Their day 45, and whether it has already passed; Reg. §1.1031(k)-1(b)(2)(i) ends the identification period at midnight on the 45th day
- Their day 180, and whether their tax return due date cuts it short, because (b)(2)(ii) ends the exchange period on the earlier of the two
- The name of their qualified intermediary and a contact there for your closing agent
- Whether they have other identified properties, which tells you how badly they need yours
The question that decides whether their money can reach your closing table
Exchange funds can only buy identified property. Reg. §1.1031(k)-1(b)(1)(i) treats replacement property that was not identified before the end of the identification period as property that is not of a like kind, which is the same as saying their exchange cannot pay for it.
If their day 45 has passed, ask to see the signed identification naming your property. A buyer who found you on day 70 and never named you is either abandoning their exchange or making an offer they cannot fund with exchange money.
Inside their first 45 days the problem disappears, because paragraph (c)(1) provides that replacement property received before the identification period closes is in all events treated as identified. You may also be the addressee: under (c)(2)(i) the identification may be sent to the person obligated to transfer the replacement property, which is you.
One more subtlety if you are carving out a parcel. Paragraph (d)(1)(ii) requires the property received to be substantially the same as the property identified, so a late change to the legal description is worth mentioning to their intermediary.
What you sign, and why it costs you nothing
The buyer will ask for a clause acknowledging the exchange and permitting assignment. IPX1031's published purchase-side language has the seller acknowledge the buyer's intent to effect an exchange 'which will not delay the closing or cause additional expense to Seller', and has the seller agree to cooperate with the buyer and the intermediary to complete it.
You take on no tax consequence, keep every contract remedy against the buyer, and have no relationship with their intermediary. The wording itself is covered from the other side on Do I need an exchange cooperation clause?.
Your deed is unchanged. Reg. §1.1031(k)-1(g)(4)(iv)(C) treats the intermediary as acquiring and transferring the replacement property where it enters an agreement with the owner of that property and the property is then transferred to the taxpayer, which is why the grantee on your deed is still the buyer.
Where the money comes from, and the two things to verify a week out
The purchase price is wired to your closing agent by the buyer's intermediary, not by the buyer. Ask your closing agent to confirm the sending institution and to obtain the intermediary's wire instructions through the exchange documents rather than from an email.
Verify the gap as well as the source. Exchange funds rarely match a purchase price to the dollar, so ask where the difference comes from: new financing, the buyer's own cash, or both. An exchange does not create buying power, it preserves it.
None of this changes your own reporting. You report an ordinary sale, receive the ordinary settlement statement and 1099-S, and if you want to defer your own gain you open your own exchange before your deed transfers, as Is it too late to start a 1031 exchange? explains.
The clock is leverage on price and terms, and a risk on certainty
A buyer on day 130 with one property named is in a very different position from one on day 20 with three. Their deadline does not bend for hardship; under IRS Fact Sheet FS-2008-18 only a presidentially declared disaster moves it.
Use that in the terms rather than only in the price: a firm closing date, a short inspection window, a larger and earlier non-refundable deposit, and no financing contingency stretching past their day 180 are all easier to obtain from a buyer with a running clock.
The risk runs the other way if their own sale has not closed yet. In that case there are no exchange funds, only an intention, so ask for written confirmation from the intermediary that it is holding proceeds for this buyer, and keep the deposit with escrow rather than releasing it.
If they are buying before they sell, the grantee may be an LLC you have never heard of
A buyer who has not yet sold anything is doing a reverse exchange, and in that structure title goes to an exchange accommodation titleholder, usually a single-purpose LLC formed by the intermediary. The IRS recognises the arrangement in FS-2008-18, which allows the parked property to be held for up to 180 days.
Rev. Proc. 2000-37 supplies the safe harbor: the Service will not challenge the qualification of the property or the treatment of the accommodation titleholder as its beneficial owner if the property is held in a qualified exchange accommodation arrangement. Your sale is still a sale, but the deed, the title commitment and the lender's documents will name that entity.
Tell your title company early and have your attorney confirm that the entity is properly formed and authorised, and that your state's transfer tax and recording treatment is unaffected. Confirm any tax question raised by the structure with your own CPA or attorney rather than with the buyer's intermediary.
Related questions
Can I charge more because the buyer is under a deadline?
You can ask, and a buyer with a short clock and few alternatives may agree, but nothing in the tax rules gives you a claim to it. Terms and certainty are usually easier to win than price.
Am I liable if the buyer's exchange fails?
No. The published clause has the seller take on no cost or liability, and the buyer's tax outcome is their own. Your remedies for a failure to close are the ones written in the contract.
Can I refuse to sign the cooperation clause?
You can negotiate the wording, but there is little to gain: the regulation requires that all parties be notified in writing of the assignment on or before the transfer, and refusing the consent only invites a buyer to walk.
Does the buyer's exchange change my closing date or my proceeds?
It should not change either. The clause promises no delay and no additional expense to you, and the assignment alters who sends the wire rather than what you receive.
The buyer wants to close in 12 days. Should I worry?
Speed is normal near a day 180 and is not by itself a warning sign. Ask why, confirm the intermediary holds the funds, and keep the deposit non-refundable and with escrow.
Should I be doing my own exchange on the same sale?
That is a separate decision with its own deadlines, and it has to be set up before your deed transfers. What the QI needs to open my exchange sets out the lead time.
Sources
Checked against these publications on September 19, 2026. Rules and figures change; confirm the current version with your CPA or attorney before you act. This page is general information, not tax or legal advice.
- 26 CFR § 1.1031(k)-1, Treatment of deferred exchanges (identification and receipt requirements; (g)(4) assignment and written notice)
- IRS Fact Sheet FS-2008-18, Like-Kind Exchanges Under IRC Section 1031 (time limits; reverse exchange through an accommodation titleholder)
- Rev. Proc. 2000-37 (qualified exchange accommodation arrangements; the Service will not challenge property held in a QEAA)
- IPX1031: exchange cooperation clauses (purchase-side language acknowledging the buyer's exchange)
- 26 U.S.C. § 1031 (identification and 180-day requirements at §1031(a)(3))