How the U.S. Treasury protects residential real estate transfers and the impact it has on real estate agents
What’s in It for Realtors
FinCEN’s future reporting requirements will impact certain all-cash or non-financed real estate transactions—and Realtors have an active role to play. You’ll help clients understand what’s reportable and the required Beneficial Ownership Information (BOI)—the detailed data that identifies the natural persons who ultimately own or control a business entity, rather than just the registered owners—to share with the title company. Staying informed ensures smoother, compliant closings and reinforces your value as a trusted professional.
Background
Every year, thousands of consumers, investors, and corporate buyers use legal entities and trusts to own residential real property — and with good reason. These entities, such as LLCs and corporations, and trusts can help keep property ownership private, avoid probate complications, and provide tax benefits.
However, illicit actors intent on laundering funds through residential real property may use entities and trusts to disguise their identities and mask the proceeds of their crimes. They favor non-financed transfers (including “all-cash” sales) of residential real estate to avoid scrutiny from financial institutions.
What’s coming:
To combat this criminal activity and increase transparency, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) is implementing new anti-money laundering regulations on a nationwide basis under the Bank Secrecy Act for residential real estate transfers.
The new federal rule requires certain persons involved in real estate closings and settlements to report information to FinCEN about specified transfers of residential real estate that are a high risk for illicit finance. Information will be reported electronically via a form on FinCEN’s website called the Real Estate Report and maintained in a secure database.
The final rule, known as the “Anti-Money Laundering Regulations for Residential Real Estate Transfers,” will take effect on Mar. 1, 2026. All individuals associated with the entities involved in closings and settlements of residential real estate to entities or trusts will be impacted. It’s important to note that the rule does not apply to transfers made directly to individuals.
To help you better understand FinCEN’s new regulations, here’s a list of answers to commonly asked questions:
1.What criteria must be met for a residential real estate transfer to be considered reportable?
A transfer is reportable under the new rule if it meets these specific criteria:
- The property is one to four family residential real property.
- The transfer is all cash, land contract, or hard money financing.
- At least one buyer/transferee is a legal entity, LLC, corporation, partnership, trust, trustee, or other non-natural person.
- An exemption does not apply.
2. What kinds of transactions are not considered reportable?
The rule does not include the following transfers:
- A transfer of an easement.
- A transfer resulting from the death of an individual, whether pursuant to the terms of a decedent’s will or the terms of a trust, the operation of law, or by contractual provision.
- A transfer due to divorce or dissolution of a marriage or civil union.
- A transfer to a bankruptcy estate.
- A transfer supervised by a court in the United States.
- A transfer made for no consideration by an individual, either alone or with their spouse, to a trust of which that individual, their spouse, or both of them, are the settlor or grantor.
- A transfer to a qualified intermediary for purposes of a like-kind exchange under Section 1031 of the Internal Revenue Code.
3. What types of properties are covered/included?
Reportable types of U.S. residential real property include: one to four single-family houses, townhouses, condominiums, and cooperatives, including condominiums and cooperatives in large buildings containing many such units, as well as entire apartment buildings designed for occupancy by one to four families.
The rule also requires reporting on transfers of land, such as vacant or unimproved land, on which the transferee intends to build a structure designed for occupancy by one to four families. A transfer of property may be reportable even if the property is mixed use, such as a single-family residence that is located above a commercial enterprise.
4. Who must file the Real Estate Report?
The reporting person is the one listed as the settlement agent on a settlement statement. If not available, the responsibility falls to the:
- Preparer of the settlement statement
- Person who records the deed
- Title insurance policy issuer
- Disburser of funds
- Title examiner
- Deed preparer
5. What information must be reported?
The reporting person must disclose the following details when filing a Real Estate Report:
- Transaction Details: Closing date, purchase price, and property address
- Parties Involved: Seller (transferor) and buyer (transferee) name, and all beneficial ownership individuals (BOI) date of birth, address, social security number
- Payment Methods: For each wire transfer and certified check, account owner, bank and account information, and the amount
6.When must the report be filed?
The deadline for filing the report is no later than 30 calendar days after the date of closing, or the last day of the month following the month in which the closing occurred, whichever is later.
Vanguard Stays on Top of Regulations That Keep Our Industry Safe
FinCEN’s new federal rule requiring mandatory reporting for all-cash residential real estate transactions involving legal entities or trusts is part of the federal government’s increased efforts to combat money laundering and financial crimes.
At Vanguard Title, we’re well versed in state and federal regulations that affect real estate closings, as well as consumer protection statutes that safeguard buyers and sellers against criminal activity. For more information about FinCEN, visit www.fincen.gov, or reach out to us any time.