Four Questions You Should Ask a Qualified Intermediary?
Posted by Andrew Gustafson on Tue, Aug 03, 2010
When considering engaging a Qualified Intermediary (QI) to accommodate a 1031 exchange there are a number of factors that should be considered.
4. How do you price your services?
Most qualified intermediaries price their services either on flat rate or percentage of the selling property. Interest earned on the exchange proceeds can be either split between the Exchangor and QI or all to the Exchangor or all to the QI. If the proceeds are over $2,000,000 then the Exchangor receives a minimum interest rate equivalent to the 13-week US Treasury bill auction.
3. How accessible is the Qualified Intermediary?
What are the office hours and is the QI available over the weekends?
2. How are the exchange proceeds protected?
There are a variety of types of security offered to protect the funds. FDIC insurance is available up to $250,000 per account. Is additional insurance available and if so at what price? To wire the funds out is the Exchangor’s signature or a personal identification number required?
1. What is the QI’s expertise?
Does the QI specialize or have adequate experience with the exchange? Is this there full time occupation or part time? Know who you are trusting with your funds and with the 1031 exchange documents.
Ask these questions, consider their references and interview three QIs before you make your decision. Call us at 850.496.0090 with your 1031 related questions.