A Qualified Intermediary is essential to the completion of a successful 1031 exchange. Technically, he or she sells your property on your behalf, buys the new replacement property, and then transfers the deed to you. It is the QI’s responsibility to hold the proceeds, prepare the legal documents, and attempt to ensure that the transaction is completed within the IRS guidelines.

To preserve tax deferral benefits and complete a successful 1031 exchange, you, the (seller or exchanger) must execute a written agreement with a Qualified Intermediary before closing on the sale of your existing property, known as the relinquished property.