1031 Exchange - Commercial Out-of-State Investment Property

[Stacey Loehrs]

If I am selling an investment property located in PA and looking to buy another but in a different estate - can I use a PA buyers agent to represent me?

Previously a local brokerage referred me to another agent in the state I was buying. But I recently heard that you can use a PA agent when buying commercial out of state properties?

[Dave Foster]

Thanks for that shout out @Bjorn Ahlblad.  It's all about your protection, benefit and interests @Stacey Loehrs.  PA does have some limited reciprocity which would let your PA realtor act as your realtor in those states I believe.  Last I heard it was only with these states - Arkansas Georgia Louisiana, Maryland,  Massachusetts, New York.

From a search and due diligence perspective, a local realtor representing you will almost always be better.  Unless you're dealing with a local site for a national type of real estate like @Joel Owens deals with every day. In particular, dealing with NNN leases from national companies someone like him is invaluable even if dealing in another state because of his national scope and the smaller pool of players at that level

If you're talking about smaller local commercial real estate then you really want boots on the ground there to understand the micro market.  There will be a listing realtor but I've never seen much good come from a buyer using a listing broker to represent them as well.  That is supposed to turn the listing broker into a transactional broker representing the deal and neither the seller nor buyer.  But that doesn't happen many times.  And you the buyer are at a disadvantage.  You need a local realtor to represent you as the buyer broker.

Your PA realtor may be able to work with a realtor lo local to where you want in a referral relationship.  Or their brokerage may have a presence where you want to be and you can leverage that.  But generally local representation is pretty key.

As the QI for your 1031 exchange if you're going to do that so you can defer paying tax on the sale, we have to be an unrelated 3rd party and cannot represent you in any part of the transaction other than administering the 1031.  But because 1031 is a federal statute it is available in all states yet the QI can perform it anywhere from anywhere.  So local representation is really only important from the actual real estate underwriting and deal perspective