Updated May 2026

Austin TX · QI Selection Guide

1031 Exchange Qualified Intermediary in Austin

Every 1031 exchange requires a Qualified Intermediary. The QI you choose holds your money, protects your timeline, and is the difference between a clean exchange and a five-figure tax surprise. Here is how to evaluate QIs in Austin.

$1K-$2.5KStandard Fee Range

BondedRequired Protection

Pre-SaleEngagement Timing

0Direct QI-to-You Funds

What a QI actually does

The QI is your insurance policy.

The IRS requires a third-party Qualified Intermediary to handle every 1031 exchange. The QI's role is structural, not advisory: they receive the exchange proceeds at the closing of your relinquished property, hold the funds in a segregated escrow account during the 180-day exchange window, and disburse the funds directly to the closing of your replacement property. You never touch the money. If you do, the exchange is immediately disqualified and the entire deferred tax bill comes due.

The QI also handles the formal identification documentation (your written 45-day identification of replacement properties goes to the QI), prepares the exchange agreement, and coordinates with both closings. They do not give tax advice, do not negotiate the deal, and do not select properties. That is your CPA's and your real estate agent's job. The QI is the structural conduit that makes the exchange legally valid. For the strategic agent role, see the Austin 1031 specialist guide.

Choosing a QI

What to verify before engaging.

Bonding and insurance

The QI is going to hold hundreds of thousands or millions of your dollars. Verify they carry fidelity bond coverage at least equal to your exchange amount, plus errors and omissions insurance. Most reputable QIs carry $5M+ bond limits. Ask for proof of coverage before signing.

Segregated accounts

Your exchange funds should sit in a separate FDIC-insured account in your name (with the QI as administrator), not commingled with the QI's general operating funds or other clients' exchanges. This is the structural protection if the QI firm has financial trouble. Ask explicitly whether your funds will be segregated.

Track record and longevity

QI firms are not licensed at the federal level (some states have begun regulating them). Pick a firm with at least 10 years of operating history, transparent ownership, and a clean record with state regulators. Ask for client references on transactions similar to yours in size and complexity.

Reverse and improvement experience

Standard delayed exchanges are operationally simple. Reverse exchanges and build-to-suit exchanges require significantly more sophistication. If your transaction might involve those structures, choose a QI with documented experience in those structures. Most QI websites disclose their service offerings; ask specifically about volume and case examples.

Timing the engagement

Engage the QI before closing.

The single most important QI rule is timing: the QI must be engaged and the exchange agreement must be signed BEFORE the relinquished property closes. If you close the sale first and then try to engage a QI, the exchange has already failed. The IRS treats receipt of sale proceeds (even temporary) as a taxable event.

Engage the QI no later than 1-2 weeks before your relinquished property closing. The agreement gets signed, your settlement agent gets QI wiring instructions for the closing escrow, and the funds flow directly from the buyer's lender to the QI rather than to you. This is non-negotiable structurally; even a one-day mistake is fatal.

Most Austin transactions involve a Texas-based QI for proximity and document-handling speed, but the QI does not need to be local. National QI firms are equally valid if they have strong Texas closing-coordination capability.

Fees and structure

What QI fees actually look like.

Standard delayed exchange QI fees range from $1,000 to $2,500 in the Austin market, typically charged at the relinquished property closing. The fee structure is usually flat, not tied to the exchange amount, so a $5M exchange and a $500K exchange cost about the same. Some QIs charge slightly higher for complex structures (multiple relinquished properties, multi-state coordination, or high-touch service tiers).

Reverse exchanges run $5,000 to $15,000 due to the additional EAT structure and operational complexity. Build-to-suit exchanges land in a similar range. Multi-asset exchanges (selling multiple properties into one replacement, or vice versa) typically add modest per-property fees.

The QI fee is the cheapest line item in a 1031 exchange. The mistake to avoid is choosing a QI based on price - the difference between a cheap QI and a quality QI is $500-$1,000, against a deferred tax bill that often runs $200K-$500K. Pay for quality.

For the full 1031 process from listing through close, see the main Austin 1031 guide. For the strict IRS rules see 1031 exchange rules and deadlines.

Common Questions

Qualified Intermediary FAQ.

What is a Qualified Intermediary in a 1031 exchange? +

A Qualified Intermediary (QI) is a third-party firm required by the IRS to handle 1031 exchange funds. The QI receives the proceeds at the relinquished property closing, holds them during the 180-day exchange window, and disburses them directly to the replacement property closing. You never touch the funds. Without a QI, the exchange is disqualified.

Do I need a Qualified Intermediary for every 1031 exchange? +

Yes for delayed exchanges (the standard structure). The QI must be engaged before the relinquished property closes. Direct simultaneous swaps between two parties can technically avoid a QI, but those are vanishingly rare in practice.

How much does a Qualified Intermediary cost? +

Standard delayed exchanges run $1,000-$2,500 in the Austin market. Reverse exchanges run $5,000-$15,000 due to the additional Exchange Accommodation Titleholder structure. Build-to-suit exchanges land in a similar range. Fees are usually flat regardless of exchange size.

What should I verify before engaging a QI? +

Fidelity bond coverage at least equal to your exchange amount, errors and omissions insurance, segregated FDIC-insured accounts in your name, at least 10 years of operating history, and documented experience in the structure you need (delayed, reverse, or build-to-suit). Ask for proof of bonding and references before signing.

When do I need to engage the QI? +

Before the relinquished property closes. The QI must be engaged and the exchange agreement signed prior to closing for the exchange to be valid. Engage 1-2 weeks before closing to allow time for the agreement and for your settlement agent to receive QI wiring instructions. Engaging after closing breaks the exchange.

Can my Austin real estate agent recommend a QI? +

A specialist 1031 agent will have working relationships with multiple Austin-area QIs and can refer one quickly. Luke partners with several reputable Austin and national QI firms and can coordinate the engagement so the timing matches your relinquished property closing.

Ready to start your QI engagement?

The 45-day clock starts the day your relinquished property closes. Engaging a specialist before listing - not after - is what protects your timeline and your replacement options.

Luke Allen · Licensed Texas Realtor · TREC #788149
(254) 718-2567 · [email protected]

About the Author

Luke Allen

Licensed Austin TX Realtor · TREC #788149 · Full-time since 2019

★★★★★ 5.0 on Google · 30 Reviews

Luke Allen is a full-time Austin TX Realtor with the Austin Marketing + Development Group brokerage. He works with buyers, sellers, and investors across every Austin ISD and the surrounding neighborhoods, from Downtown and East Austin to Round Rock, Cedar Park, and the Hill Country. Every page on this site is written and maintained by Luke. This page was last updated on August 20, 2026.

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