1031 Exchange - Can funds be used for escrow?
Can the funds from a 1031 exchange be used for (second) escrow?

The situation: I represent the seller. The buyer is doing a 1031 exchange. 

He is refusing to come out of pocket for 2nd escrow after putting a very minimal 1st escrow down. He is saying that he does not want to come out of pocket.

I’ve spoken to various attorneys and intermediaries and I get conflicting info.

Has anybody had experience with this?
[{"id": "gouu4js", "text": "When we did a 1031 exchange the earnest money we put up out of pocket was refunded at closing.", "replies": [{"id": "gowqm0u", "text": "Seconded.", "replies": [], "depth": 2}], "depth": 1}, {"id": "gouz0w7", "text": "Yes you can use funds from the sale of a 1031 property as escrow (earnest money) on the replacement property. His 1031 intermediary should know this", "replies": [], "depth": 1}, {"id": "gov1kdf", "text": "From the intermediary POV why would they take the risk of some of the 1031 money getting disallowed and taxed because the deal fell through and seller kept the escrow? It's a headache for them and pisses off *their* client, the buyer.\n\nINAL but functionally yes, in practice unlikely.", "replies": [{"id": "gov5lv3", "text": "I was going to say the same thing.  You practically cannot use 1031 exchange funds being held by your exchange agent for your earnest money, because the earnest money is at risk of the deal falling through, and that would create an issue.  Maybe you can find an attorney and/or exchange agent who would facilitate this for you, but in my experience with 1031s, it's not possible.", "replies": [], "depth": 2}], "depth": 1}, {"id": "gov7x2o", "text": "Talk to your escrow officer with 1031 experiece.", "replies": [], "depth": 1}, {"id": "gowgfbb", "text": "Just tell him he can get the cash back at close that he is out of pocket,  It's even better to borrow the money than take a risk that everything falls apart aka max tax.  You could always lend him the money at 24% with a 1 year prepay, and have him pay you off at close if he's that adverse to bringing cash.", "replies": [], "depth": 1}, {"id": "gownw2m", "text": "If they use non exchange funds, they can be reimbursed from exchange proceeds at closing of the replacement property.", "replies": [], "depth": 1}, {"id": "gox9cqz", "text": "The seller is wanting the buyer to increase his deposit?", "replies": [], "depth": 1}]