It's important that you choose a good qualified intermediary in a 1031 exchange, in the same way that you should choose a good realtor. Both of these advisors can guide you through an exchange smoothly, or cause it to run into obstacles. And, since extra care needs to be taken in a 1031 exchange transaction, it is best to choose wisely right from the beginning.
An intermediary should first consult with you about your individual situation. Just like your real estate agent, they will know the particulars of what you are trying to accomplish, and the best way to go about it. They can then prepare customized documents on your behalf depending on the complexity and specifics of your exchange.
Next, the intermediary will be holding on to your money - the proceeds from the sale of your relinquished property. Make sure that they are bonded, that they hold the money in a way and with a financial institution that you are comfortable with, and that they can always provide you with an accounting of your funds. It is also a good idea to use someone who is reputable and has experience in such matters.
The qualified intermediary business is surprisingly an unregulated one, so anyone can set up shop and become an intermediary. Make sure that you consult with yours, ask any questions to become comfortable, and that the intermediary is always there and able to respond to your needs and concerns, and can guide you through the entire transaction. We work with many different QIs, and I'd be happy to refer you to one!
An intermediary should first consult with you about your individual situation. Just like your real estate agent, they will know the particulars of what you are trying to accomplish, and the best way to go about it. They can then prepare customized documents on your behalf depending on the complexity and specifics of your exchange.
Next, the intermediary will be holding on to your money - the proceeds from the sale of your relinquished property. Make sure that they are bonded, that they hold the money in a way and with a financial institution that you are comfortable with, and that they can always provide you with an accounting of your funds. It is also a good idea to use someone who is reputable and has experience in such matters.
The qualified intermediary business is surprisingly an unregulated one, so anyone can set up shop and become an intermediary. Make sure that you consult with yours, ask any questions to become comfortable, and that the intermediary is always there and able to respond to your needs and concerns, and can guide you through the entire transaction. We work with many different QIs, and I'd be happy to refer you to one!
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