Starting March 1, 2026, there will be new reporting requirements for real estate transactions. Here’s what you need to know whether you are a real estate agent or in the title industry.
What IS FinCEN and Why the New Rules?
FinCEN is part of the U.S. Treasury Department, and their job is to combat money laundering and other financial crimes. They’ve decided that certain all-cash real estate purchases by LLCs and trusts need more transparency – basically, they want to know who’s really behind these transactions.
Does This Affect Your Transaction?
The reporting requirement applies when ALL THREE of these things are true:
1. It’s a residential property
This includes 1-4 family homes, mixed-use properties with residential units, or undeveloped land zoned for residential use.
2. There’s no traditional bank financing
If there’s a mortgage from a regulated financial institution securing the property, you’re probably exempt. This mainly affects cash deals or creative financing situations.
3. The property is being transferred TO a legal entity
This means an LLC, corporation, partnership, or trust – not an individual person.
If your transaction meets all three criteria, someone involved needs to file a report with FinCEN.
Who’s Responsible for Filing?
Here’s where it matters for all of us in the real estate industry. There’s a priority order of who needs to file:
- Closing agent/title company
- Person preparing the closing statement
- Seller’s attorney
- Buyer’s attorney
- Person who prepares the deed
- Person who records the deed
The responsibility falls to whoever is first on this list and involved in your specific transaction. Since I hold a Title Producer’s License, that would fall on me to file.
What Information Gets Reported?
The FinCEN report includes:
- Information about whoever’s filing the report
- Details about the LLC or entity receiving the property
- Beneficial owner information (anyone who owns 25%+ of the entity or has substantial control)
- Who’s signing documents on behalf of the entity
- Seller information
- Property details and location
- Purchase price/consideration
Real Estate Deals Exempt from Filing
You DON’T need to file a FinCEN report if:
– There’s traditional bank financing (mortgage from a regulated lender)
– The transfer is due to death/inheritance
– It’s part of a divorce settlement
– It’s pursuant to a court order
– It’s a 1031 like-kind exchange
– Property is going into a trust where the seller is also the trustee
– The buyer is a highly regulated entity (bank, credit union, insurance company, etc.)
What This Means for Different Types of Buyers
First-Time Homebuyers (buying as individuals with a mortgage):
This doesn’t affect you at all. Carry on!
Real Estate Investors:
If you’re buying properties and taking title in an LLC – which is smart for liability protection – just make sure you’re working with a closing team that understands FinCEN requirements. Have your beneficial ownership information ready.
FSBO Sellers:
If your buyer is an LLC or trust paying cash, make sure someone in the transaction knows about this reporting requirement. Don’t let it slip through the cracks.
Creative Finance Investors:
Many seller-financed deals, subject-to acquisitions, and other creative strategies will trigger this requirement. Build compliance into your systems now.
What You Should Do Before March 1st
1. Talk to your title company
Ask if they’re prepared to handle FinCEN reporting. Most reputable companies are getting trained on this now.
2. Know your entity structure
If you own property through an LLC or plan to, make sure you can quickly identify your beneficial owners and have their information documented.
3. Update your processes
If you’re closing deals, add FinCEN compliance to your checklist. If you’re buying/selling, ask your team about it.
4. Don’t panic
This is a new layer of paperwork, but it’s manageable. The key is working with professionals who are staying current on the requirements.
Questions About FinCEN or Your Upcoming Transaction?
That’s what I’m here for. As both a licensed Realtor and a Notary Public, I bring dual expertise to the table – plus bilingual services if you’re more comfortable discussing this in Spanish.
And while this article covers FinCEN from the REAL ESTATE side, I will also be writing an article for my Notary and Title peeps, about the things YOU need to know specifically. Whether you are an independent mobile closer, or work directly with a title company, this is now part of the closing process. For more information, visit https://www.finCEN.gov
