Qualified Intermediaries

[Andrew Lamirande]

Hello BP! I am looking for some stories of the best and worst experiences that you have had with a qualified intermediary in your 1031 exchanges. I have heard of some lack luster and quite frankly shady intermediaries out there who could be risking the validity of the exchange. Thanks!

[Joe Splitrock]

@Andrew Lamirande like most things this probably varies by state. I was able to work with a title company that also handled the intermediary process in-house. Not all title companies in my area do this. I almost had a major problem because the title company I sold through was different than the title company I purchased through. They didn't talk to each other and the buying title company was not aware the purchase was done with an exchange. There is extra paperwork at closing and the transaction is handled a little different. Being new to this I didn't know that. My lesson learned in my city is in the future to use the same title company for sale and purchase. Also to use one that handles the 1031 exchange. Again, I am not sure if this can be done in all states. 

[Andrew Lamirande]

thanks @Joe Splitrock. Being a tax accountant I have been on the side of preparing returns with 1031 exchanges but have never been through the process myself. Just know the littlest things can invalidate an exchange especially when you get more complicated ( i.e. Improvement exchanges) and a lot of companies aren't always all that forthcoming with information.

[Robert Hetsler]

Just make sure to ask for references, ask for proof of insurance (malpractice and Fidelity Bond) as well as professional licenses as you can verify if they have had any complaints of any sort. See if the present at functions as a subject matter expert, look them up on LinkedIn or other social media outlets to check for reviews, education and experience. However, the most important thing is to ask for references and actually call them!

Now if you are looking for stories I have heard many that would blow your mind what I have seen and heard of people doing. Anything from day trading with the money to buying anything their heart desires so you definitely need to be careful. I would like to think that for every bad one we have 3 good ones as the bad ones, with time, will be weeded out.