STEP 1: Seller (Exchangor) decides to sell investment property.
Prior to closing of the sale, Exchangor engages an Intermediary (aka Qualified Intermediary "QI", Facilitator, or Accommodator) to facilitate the exchange. If Exchangor receives funds instead of the Intermediary, a 1031 Exchange is voided.
STEP 2: Proceeds of sale are wired to Intermediary.
Net proceeds of sale are wired to the Qualified Intermediary for placement in a Qualified Escrow Account "QE" with federally insured institution.
STEP 3: Identify properties to buy within 45 days.
Exchangor must identify replacement properties by midnight of the 45th day by a written document delivered to Qualified Intermediary.
STEP 4: Close on replacement property by day 180.
Exchange funds held by Qualified Escrow Account are transferred to the replacement property closing by the 180th day.
From the sale date, the Exchangor has 45 days to identify replacement property; and 180 days to close on the identified replacement property.