When it comes to selling your property, nobody thinks of involving a third party. The last thing that comes into the minds of people is about going for a qualified intermediary.
Most of the qualified intermediaries that people use aren’t regulated by a body. Unlike banks and insurance companies, there is no supervision of these qualified intermediaries.
The importance of working with a good and decent qualified intermediary is what is going to be the real difference between an easy and smooth 1031 exchange and a disaster, and companies such as Dst 1031 properties are available to make the process smoother.
The QI performs three different kinds of tasks, including preparing the legal agreements necessary to structure a 1031 exchange. It also helps hold and safeguard the money you receive from your property’s sale until you find a replacement property to buy. Moreover, the QI ensures that your exchange complies with the Internal Revenue Services rules and regulations.
Only a qualified intermediary is capable of facilitating a smooth 1031 exchange. The QI holds on to the funds from the sold property and uses the funds for getting a new replacement property. The funds that are attained don’t ever really come in contact with the property owner, who is involved with 1031, according to the rules and regulations of the Internal Revenue Services.
It has been mentioned earlier that any agency or government institution does not regulate the QIs. Therefore, to find the right QI, there is a lot of research that understands the expertise and knowledge of the QIs. If you have received someone’s reference by word of mouth, it is still recommended to go ahead and conduct your research for every single QI that you are considering for your work.
The QI role is significant, as they are responsible for conducting and facilitating the whole exchange process. The first step is to form an agreement. Once the deal is done correctly and fully finalized, the next step is to move on to the 1031 exchange. This means that they are responsible for all the different stages and aspects of transferring and acquiring the properties between the buyer and the seller, including the management and handling of funds exchanged. The QI must ensure that the taxpayer has restricted or limited access to the funds under the QI control.
Therefore, you must take a full understanding of the QI before you go ahead with your 1031 Dst exchange process. Most of them are quite honest and take over their responsibilities in a fair, orderly fashion. But one must always conduct thorough research to gain tons of information before going ahead with such a significant transaction.