A qualified intermediary (QI) is the independent party that holds sale proceeds and documents a 1031 exchange; the exchanger never touches the funds.
Using a QI is what allows a 1031 exchange to qualify as deferred rather than taxable. The QI holds the sale proceeds in a segregated account, prepares the exchange documents, and uses the funds to acquire the replacement property on the investor's behalf. The investor cannot receive the funds directly or act as the QI. Anyone who has acted as the investor's agent, such as an attorney, accountant, or broker, within the past two years is generally disqualified. Choose an experienced, well-capitalized intermediary and engage them before the relinquished property closes.