Qualified Intermediary Coordination

The qualified intermediary holds the exchange funds and the paperwork that keeps a sale from being taxed as a straight disposition, and coordinating with that party is closer to running a submittal log than a single phone call. On a Park City transaction, that log usually spans a title company, an escrow officer, a lender, and the investor's own CPA, all working off the same document set. Keeping that group aligned on dates matters more than any single document in the file.

Not every intermediary handles every asset type equally well, and a firm accustomed to single-family relinquished property sometimes moves slower on a commercial parcel with multiple tenants or a reverse structure. Scope of engagement is confirmed before the relinquished property closes, not after, so the exchange agreement matches what the transaction actually requires.

Fee structure, funds handling procedure, and the intermediary's process for identification notices are all reviewed at engagement rather than assumed to be standard across providers.

A short reference call with the intermediary's operations team, rather than only the sales contact, usually surfaces whether their process fits a commercial closing before the engagement is finalized.

The paperwork moves in a set order, and missing a step out of sequence creates rework rather than saving time. A typical submittal sequence includes:

• exchange agreement execution before relinquished property closing
• assignment of the relinquished property sale contract
• notice to the buyer of the assignment
• funds transfer instructions to the intermediary
• identification notice within the forty-five-day window
• assignment of the replacement property purchase contract
• closing instructions to escrow for the replacement purchase

Each step is confirmed in writing as it happens rather than assumed complete, since a verbal confirmation from an escrow assistant does not hold up the same way a countersigned notice does.

When should a qualified intermediary be engaged relative to the relinquished property sale?

The exchange agreement needs to be signed before the relinquished property closes, since a QI cannot be added after the fact to fix a closed sale. Engagement is typically confirmed while the relinquished property is still under contract.

What is constructive receipt and why does it matter here?

Constructive receipt happens if exchange funds pass through the investor's control at any point, which can disqualify the whole exchange. Closing instructions are structured so the intermediary, title company, and closing parties move funds directly without routing through the investor.

Does the lender need to coordinate directly with the qualified intermediary?

Loan proceeds and exchange funds need to stay distinct on the closing statement, so a lender is typically looped in alongside the intermediary rather than left to reconcile the numbers independently at the closing table.

How long does the intermediary hold exchange funds?

Funds generally stay with the intermediary from the relinquished property closing until the replacement purchase closes, which has to happen within the one-hundred-eighty-day exchange period. Coordination continues through that entire window rather than ending at identification.

What if the intermediary has not handled a commercial or multi-tenant property before?

That gap is worth surfacing at engagement, since some intermediaries specialize mainly in single-family relinquished property and move slower on assignments involving multiple tenants or a reverse structure. Confirming process fit early avoids delay later in the transaction, and a short reference call is usually enough to settle the question.