According to recent statistics, people file about 250,000 exchanges that require a qualified intermediary each year. Direct swaps can be challenging, but these experts can help you facilitate them so you can better exchange investments and property.
Choosing the right QI is critical for anyone looking to make an exchange. Read on for some tips on selecting a qualified intermediary the right way.
Experience
Anyone can become a qualified intermediary (QI). It's not a regulated process, which means that you need to do some research to find someone that's experienced and knowledgeable.
You can begin by looking at the Federation of Exchange Accommodators website. This trade association for QIs will give you more information on what to look for.
Once you find a potential QI, make sure to ask them about their prior experience. See how long they've been a QI and what they have done during that time. Inquire about references and testimonials to verify the information they give you.
Types of Cases
1031 exchanges are not one-size-fits-all. There are many different types including real estate exchanges, reverse exchanges, deferred exchanges, and construction exchanges.
Each of these has a different set of governing rules. Some QIs will only be experienced in one type of 1031 exchange and will not be a good fit for other exchange types.
Make sure that you ask about a QI's past cases. You need someone who has an in-depth understanding of the exchange type you're looking to make.
Insurance
Insurance keeps you safe as you work with a QI. It serves to protect your finances in the event of a QI error. The best QIs will carry multiple types of insurance, including:
Errors and omissions insurance
Fidelity bonds
Written performance guarantees
Ask them to show you documentation of these policies so you can feel confident in working with them. Transparency is key in any professional relationship, so it's important that they're willing to present their policy.
Security
Exchanges are not federally regulated. This is surprising because multiple parties need to move vast sums of money between them.
Luckily, you can protect your funds by working with a QI that has high-level security policies. Ask them about cybersecurity, verification, data storage, and identity matters. This will ensure that you're safe throughout the exchange process.
High-Quality Counsel
QIs aim to provide high-quality information relevant to your case. They'll help you as the exchanger understand what's legal in your exchange vs what isn't. You should have a way to contact them regularly and modes of open and honest transparency.
It's also important that your QI is willing to enlist an attorney to help you if need be. This will give you the information that you need to proceed without worrying about potential liability issues.
Find a Qualified Intermediary Today
Now that you know how to find a qualified intermediary for your upcoming 1031 exchange, it's time to reach out to leading experts in the industry. Professionals at 1031 Pros are committed to pairing you with someone knowledgeable about your specific situation.
Our top-notch counsel and simple methods are sure to make the process easier for you. Contact us to learn more and schedule a consultation ASAP.
Comentarios