The mechanism
How the No Fee 1031 Exchange Works
There is no trick in it. The money that pays for a 1031 exchange has always come from two places, and we only use one of them.
The Easy1031 Exchange DeskReviewed September 9, 2026
The short answer
Every qualified intermediary holds your sale proceeds for up to 180 days, and that balance earns interest. Most firms keep all of it and charge you a setup fee on top. We take our income from the interest alone, charge $0 to set the exchange up, and pay you a share of the interest as well. Everything the IRS cares about is unchanged.
Start to finish
Five steps, and only one of them is different
- 01
You engage us before your sale closes
This has to happen first. Once you have taken receipt of the proceeds, no intermediary can undo it and the exchange is dead.
- 02
Your sale closes, funds come to us
The proceeds go into a segregated account at a commercial bank with up to $175M of FDIC coverage. Not a pooled account.
- 03
The funds earn interest while we hold them
This is the part that pays for everything. Most intermediaries keep all of it. We share it with you, from 0.50% to 2.00%.
- 04
You identify in 45 days, close in 180
Statutory deadlines, identical at every intermediary in the country. We do not control them and neither does anyone else.
- 05
We wire the funds and document it
Straight to your replacement closing, with the paperwork your CPA needs for Form 8824. No wire fee, because there are no fees.
Why the fee was always optional
A qualified intermediary has two revenue lines. One is the fee it charges you, which appears on the settlement statement. The other is the interest earned on your money while it is held, which appears nowhere at all.
The second is much the larger of the two on any exchange of size. Held for four months at a typical deposit rate, $2,000,000 generates roughly $26,000 of interest. Set that against a setup fee of $800 to $1,500 and it becomes obvious which line the business actually runs on.
Which is why the fee can be zero. It was never carrying the business. It was simply charged because it could be, on top of a revenue line nobody was talking about.
| Revenue line | Conventional intermediary | The no fee 1031 exchange |
|---|---|---|
| Setup fee charged to you | $800 to $1,500 | $0 |
| Wire and per-property fees | Billed separately | $0 |
| Interest on your funds | Kept in full | Shared with you, 0.50% to 2.00% |
| Appears on your settlement statement | Yes, the fee | Nothing |
What does not change
Everything the IRS cares about. The 45-day identification window and the 180-day completion window are statutory. What qualifies as like-kind property is set by the Internal Revenue Code. The requirement that you never take actual or constructive receipt of the proceeds is the whole basis of the deferral.
None of that moves with your choice of intermediary, and any firm suggesting otherwise is telling you something untrue. The things that genuinely do vary are here, including the ones that count against us.
No small print
How the mechanism works
How does a no fee 1031 exchange make money?
From the interest earned on the exchange funds while they are held. Every qualified intermediary holds a client's sale proceeds for up to 180 days, and that balance sits in a bank account earning interest. Most firms keep all of it and charge a setup fee on top. We take our income from the interest alone, and pay a share of it back to the investor.
Is the no fee 1031 exchange a real 1031 exchange?
Identical in every respect that touches the IRS. The 45-day identification deadline, the 180-day completion deadline, the rules on what property qualifies and the requirement that you never take receipt of the proceeds are all statutory. They do not change with your choice of intermediary. What changes is what the intermediary charges and what happens to the interest.
What are the steps in a no fee 1031 exchange?
The same five as any forward exchange. You engage the intermediary before your sale closes. Your sale closes and the proceeds go to the intermediary rather than to you. You identify replacement property in writing within 45 days. You close on the replacement within 180 days. The intermediary wires the funds to that closing and prepares the documentation for Form 8824.
Do I have to do anything differently for a no fee exchange?
Nothing. The paperwork, the deadlines and the mechanics are the same. The only difference you will notice is on the settlement statement, where the line for the intermediary's fee reads zero, and afterwards, when the interest share is paid to you rather than retained.
Start a 1031 exchange that costs you nothing
No setup fee, no wire fee, no per-property fee. Segregated funds at a commercial bank, and a share of the interest paid back to you.