The replacement property must be identified in writing to the Intermediary with the forty-five day identification period which begins from the date of close of escrow for the relinquished property.  The three identification rules are: 

1. The Three Property Rule- you may identify three properties of any value and buy one or more of the identified properties. This is the most popular rules and provides flexibility in valuation.

 

2. The 200% Rule- you may identify as many properties as you like, but the total value of the property you identify cannot exceed 200% of the value of the property you sold (the relinquished property).

 

3. The 95% rule-you may identify as many properties as you wish with no restrictions on value, but you are required to close on 95% of the properties you identify or the entire exchange fails.

 

The identification process is a key aspect of the exchange process and the success of the exchange depends on properly adhering to the identification rules.