FinCEN Reporting Requirements for Real Estate Transactions
Real estate transactions have long been susceptible to illicit financial activity, such as money laundering. And, real estate sales and transfers have been an ideal means to launder money.
In an effort to combat illicit activity, the US Treasury’s Financial Crimes Enforcement Network (FinCEN) is enacting expanded reporting requirements for real estate transactions effective March 1, 2026.
This requirement only applies to certain real estate transfers, thus it will not affect the vast majority of buyers or sellers.
In a nutshell, the new reporting requirements for real estate transactions will be triggered when all three of the following conditions are met:
- Purchased by an entity, such as trusts, LLCs, corporations & partnerships.
- Residential properties (1-4 unit structures including individual condo and co-ops units, residential / commercial multi-use properties, vacant land intended to be used as residential).
- Purchased with other than conventional mortgage financing. That is, purchased with cash, hard money financing, gifts, seller financing, etc.
There are a few certain exemptions to the reporting requirements that may apply.
For transactions triggered by the reporting requirements, Escrow will collect the necessary information from buyers and sellers. They will then file it with FinCEN. The required reporting information may include:
- Full legal name
- Street Address
- Date of Birth
- Email Address
- Phone Number
- IRS Taxpayer Identification Number
The information required will be dependent on several factors such as the reporting party, type of entity / trust, ownership interest, and so forth.
Escrow’s receipt of complete information from buyers and sellers are required in order to close the sale. If not received in time, or failure to provide the information to escrow, will delay the closing.
Additional Escrow fees for FinCEN related transactions and reporting may be incurred.
This post is meant to provide a high level overview only. For more detailed information, visit the FinCEN website at: https://www.fincen.gov/rre
