In order to start a 1031 exchange, you need to take a few steps. The most important is you need to hire an exchange agent prior to your first closing. In fact, ideally your exchange agent will be consulted prior to even signing the first contract (whether buying or selling).
For the property you are selling, you will want to include some language about your use of a 1031 exchange in the earnest money contract. This contract language is called the “cooperation clause.” For example, to use Brazos 1031 Exchange Company, you should include the following language: