How to Choose a 1031 Exchange Company: 2026 Checklist
Hundreds of firms offer 1031 exchange services, and no federal license separates them. This guide covers what to check and what to ask, written by a Certified Exchange Specialist. It is not a ranking.
Choose a 1031 exchange company that puts a Certified Exchange Specialist (CES) on your account, holds client funds in segregated accounts, shows you its current fidelity bond and E&O certificates, gives you one named contact, and sends its exchange agreement and an all-in written quote before any funds move. Then match the firm to your type of exchange, not to the size of its marketing.
The checklist: what to measure
The mistake most investors make is asking “who is the biggest?” instead of “who is set up to protect my money and my exchange?” The right criteria are structural, not promotional.
| Dimension | What to measure | Why it matters |
|---|---|---|
| Credential | An active CES on your account, verifiable in the FEA's public directory | A recognized industry credential in a field with no federal license |
| Account structure | Segregated accounts, never commingled with operating funds | Segregated funds are the main protection for your principal if the intermediary fails |
| Insurance | Current fidelity bond and E&O certificates, seen in writing | The backstop against employee theft or professional error; compare the amounts with your deposit |
| Continuity | One named contact from your sale to your replacement closing | Reverse, improvement and identification-change situations need someone who knows the file |
| Responsiveness | A named contact and agreed response expectations for the 45-day window | The 45-day deadline is strict; a slow answer can cost you a property |
| Document discipline | Exchange agreement in advance, written addenda for every change | The paper trail is what supports your exchange if it is examined later |
| Fee transparency | An all-in quote in writing, including who keeps the interest | Surprise charges at closing are a warning sign |
Match the firm to your deal
The right 1031 exchange company depends on your specific exchange. Use this matrix to decide what to ask for:
| Your situation | What to look for |
|---|---|
| Forward exchange, one property sold, one bought, plenty of runway | Any firm that passes the checklist; compare written quotes and who keeps the interest |
| Forward exchange with identification still being finalized | A named contact who will be reachable through the 45-day window |
| Reverse exchange (parked property) | Experience setting up and running exchange accommodation titleholder structures; ask how many it handles |
| Improvement (construction) exchange | Experience with construction draws and the continuity to coordinate them |
| Multi-property exchange (3+ replacements) | Careful handling of the identification rules and written identification records |
| Partnership exchange (drop-and-swap) | Attorney involvement, or close coordination with your own attorney |
| Very large exchange or fund-level volume | Bond and E&O amounts that match the money on deposit, and the back office to handle volume |
| NYC co-op or condo exchange | An intermediary experienced with co-op board and transfer-tax timing; ask for examples |
| Foreign seller (FIRPTA withholding) | Experience coordinating FIRPTA withholding with the exchange |
| Tight timeline before your sale closes | How fast the firm can issue the agreement and open your account |
Specific firms, compared
For a dated, side-by-side summary of nine firms from their own websites, see 1031 exchange companies compared.
What an exchange should include
Most investors over-weight the headline quote and under-weight what the exchange actually involves. What should be included tracks the exchange's structure:
| Exchange type | What it should include |
|---|---|
| Forward, single property | Agreement, assignment, fund custody, identification logging, replacement wire, 1099, 8824 support |
| Forward, multi-property (3+) | Above + per-property assignment |
| Reverse | Above + EAT entity, parking structure, EAT operating agreements |
| Improvement (construction) | Above + draw coordination, improvement escrow management |
| DST (QI portion only) | QI mechanics — DST sponsor fees separate |
Ask every intermediary in writing who keeps the interest earned on your exchange funds. A quote that looks unusually low deserves questions about who keeps the interest and what is excluded. Talk to Leah about what your exchange involves.
Mistakes that cost investors their exchange
After more than 11 years watching exchanges succeed and fail, I see the same patterns. They are rarely about the intermediary's competence. They are about choosing the wrong fit or acting too late.
- Choosing on price alone. A small saving on the intermediary is not worth an unreachable contact on Day 44.
- Choosing on brand alone. Hiring the biggest name and discovering you can't get the same person on the phone twice.
- Hiring too late. The intermediary must be in place before the sale closes; it cannot be added afterward. Engaging the week of closing leaves no time to review the agreement or coordinate with your attorney.
- Skipping the agreement review. Signing the exchange agreement at closing without your attorney reading it. Read the interest, indemnification and dispute-resolution clauses.
- Using your own agent or attorney as the intermediary. Someone who has acted as your agent, such as your real estate agent or attorney, within the prior two years is generally a disqualified person and cannot serve as your qualified intermediary.
- Letting sale proceeds be paid to you, even briefly. If you receive or control the money, the exchange fails. Proceeds go from the closing agent directly to the QI.
- Missing the 45-day identification by hours. Identification must be in writing, signed, and delivered by midnight of Day 45. A 12:01am email is too late.
- Not keeping proof of identification. The identification must be received by the intermediary. Get a written confirmation of receipt.
The right 1031 exchange company helps you avoid each of these, whatever its fee or the size of its logo. This is general information, not tax or legal advice; confirm your own situation with your CPA or attorney.
Frequently asked questions
What should I look for in a 1031 exchange company?
Five checks: a Certified Exchange Specialist (CES) on your account, client funds held in segregated accounts and never commingled with operating funds, a current fidelity bond and E&O policy you have seen in writing, an exchange agreement provided before funds move, and a named contact rather than a rotating desk.
How much does a 1031 exchange company cost?
Cost tracks the exchange's structure: a reverse or improvement exchange involves far more work than a single-property forward exchange. Ask each firm for an all-in written quote, what it excludes, and who keeps the interest earned on your exchange funds while they are held.
Are 1031 exchange companies regulated?
There is no federal license for qualified intermediaries. The IRS sets the rules for the exchange itself, not for the companies. Several states regulate exchange facilitators, including California, Nevada, Washington, Virginia, Idaho, Oregon, Connecticut and Maine; check your state's statute. The CES credential, a fidelity bond and segregated accounts are the protections to ask about everywhere.
Do I need a 1031 exchange company in my state?
Usually not. Exchanges run by wire and email, so a firm in another state can serve you. Several states regulate exchange facilitators, including California, Nevada, Washington, Virginia, Idaho, Oregon, Connecticut and Maine; check your state's statute and ask the firm how it complies where your property is.
How long has the 1031 exchange industry existed?
The like-kind exchange provision dates to the Revenue Act of 1921. The qualified intermediary safe harbor in Treasury Regulation §1.1031(k)-1(g)(4) was finalized in 1991, which is when the modern 1031 exchange company industry took shape.
What is the success rate of 1031 exchanges?
There is no public industry-wide success-rate statistic. Most failures trace to investor-side mistakes: missing the 45-day identification, identifying property that does not qualify, or receiving the sale proceeds before an intermediary is in place. A careful intermediary helps you avoid these.
Can I do a 1031 exchange without a qualified intermediary?
A simultaneous swap with the other party at one closing does not need one, but those are rare. For a deferred exchange, nearly every investor uses a qualified intermediary. The regulations' other safe harbor, a qualified escrow account or qualified trust, exists but is rarely used to hold the full exchange.
What happens if my 1031 exchange company fails?
If an intermediary fails and your exchange cannot be completed, the gain is generally taxable. IRS Rev. Proc. 2010-14 gives limited relief to taxpayers whose intermediary defaults in bankruptcy or receivership, letting them report the gain as they actually recover their money. Segregated funds are the main protection for your principal. Ask your CPA about your own situation.
Is it safe to use a small or new 1031 exchange company?
Safety is structural, not size-based. Ask any firm, large or small, how your funds are held, for its current bond and E&O certificates, and for its exchange agreement in advance. A short track record is harder to assess, so ask for more documentation, not less.