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Buying before you sell: what a reverse exchange takes.

A reverse exchange lets you acquire the replacement property first. It needs a separate titleholder, a signed agreement within days, and the same 45 and 180-day periods counted from a different start.

Updated September 30, 2026 · Reviewed by onezero3one professional staff on September 30, 2026

onezero3one handles reverse exchanges, including the exchange accommodation titleholder arrangement they require. Talk to us before you sign the purchase contract: the structure has to be in place when the titleholder acquires the property.

The deferred-exchange regulations cover selling first and buying second. When the replacement property has to be bought first, the usual route is Rev. Proc. 2000-37: an exchange accommodation titleholder (EAT) acquires and holds one of the properties, "parking" it, until the exchange can be completed.

Found the next property before yours has sold?

That is the situation a reverse exchange is for. The order of the steps matters more than in a forward exchange, because the arrangement has to be ready when the purchase closes.

Before you sign the purchase contract

  1. Contact us with both properties, their states and your target purchase date. We confirm whether onezero3one can act, and quote the fee in writing.
  2. Ask your lender whether it will lend to the titleholder’s entity. Not every lender will.
  3. Ask your attorney to make sure the purchase contract can be assigned to the titleholder.
  4. Agree with your tax advisor which property will be parked: the new one, or the one you own now.
  5. Plan the sale. Under the safe harbor the exchange has to be completed within 180 days of the titleholder’s purchase.

What to send us

  • The purchase contract or letter of intent, and the target closing date.
  • The address and state of both properties.
  • The exact name on title of the property you will sell.
  • Your lender’s contact details.
  • Your tax advisor’s contact details, if you would like them copied.

Do not send Social Security numbers, bank details or documents through the website form. We arrange a secure way to receive them once you engage us.

What the safe harbor requires

  • The EAT holds legal title or other qualified indicia of ownership, often the membership interest in a single-member LLC that holds title. It cannot be you or a disqualified person.
  • A written qualified exchange accommodation arrangement is signed no later than five business days after the EAT acquires the property.
  • The agreement treats the EAT as the beneficial owner for federal income tax purposes while it holds the property.
  • The relinquished property is identified within 45 days of the EAT's acquisition, and the exchange is completed within 180 days. The combined time the properties are held under the arrangement cannot exceed 180 days.
  • The safe harbor does not apply to property you owned at any time in the 180 days before the EAT acquires it (Rev. Proc. 2004-51).

What makes reverse exchanges harder

  • Financing. Lenders must be willing to lend to the EAT or its LLC, and to accept its structure.
  • Cost. Forming and running the titleholding entity, and the additional documents, make reverse exchanges considerably more expensive than forward ones.
  • Timing. The 180 days run whether or not your existing property has sold.
  • State rules. Some states treat acting as an EAT as a regulated activity, and some transfer taxes apply to transfers to and from the titleholder.

Questions to settle before you buy first

  1. Which entity will hold title, and who controls it?
  2. Will my lender accept the structure? Has the provider worked with lenders on it?
  3. What is the total cost, including entity formation, and what happens if the old property does not sell within 180 days?
  4. Which property will be parked, the new one or the old one, and why?

The guide to reverse and improvement exchanges covers the rules in more depth.

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