A Qualified Intermediary is an independent third party that holds your sale proceeds, facilitates funds for closing, and handles the paperwork during the exchange process.
The QI exists because of one rule that trips up most sellers: if you take the sale proceeds yourself, even for a day, the exchange is dead and the tax is due. Your QI has to be genuinely independent, which means it cannot be your attorney, CPA, or real estate agent if that person has worked for you in the last two years.
Beyond holding the money, a good QI prepares the exchange documents before your closing, tracks your 45-day identification and 180-day closing deadlines, and tells you when a proposed replacement property is going to create a problem.
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