Update, September 2026: On March 19, 2026, less than three weeks after this rule took effect, the U.S. District Court for the Eastern District of Texas vacated it nationwide in Flowers Title Companies v. Bessent, finding that FinCEN exceeded its authority under the Bank Secrecy Act. FinCEN has since confirmed that settlement agents are not required to file Real Estate Reports, and face no liability for not filing, while that order stands. The Department of Justice has appealed to the Fifth Circuit and filed its opening brief in August 2026, and a federal court in Florida upheld the rule in a separate case that is now on appeal to the Eleventh Circuit. In short: reporting is paused, not gone. If the rule is reinstated, the requirements below would apply again, so buyers purchasing through an LLC or trust should keep them in mind.
Starting March 1, 2026, the Financial Crimes Enforcement Network (FinCEN) rolled out new anti-money laundering reporting requirements for residential real estate transactions, and they apply nationwide, with no minimum purchase price. Here's what buyers and agents need to understand.
Does This Affect Your Deal?
A FinCEN Real Estate Report is required when all three of the following are true:
- It's a residential transaction (1-4 family homes, condos, townhomes, co-ops, or vacant land intended for residential construction)
- It's non-financed: cash or a private lender, not an institutional lender with an AML program
- At least one buyer is an entity or trust: an LLC, corporation, partnership, or similar non-natural person
Individual buyers purchasing in their own name are not subject to reporting.
Key Exemptions
Certain transfers are excluded, including those due to death, divorce, or dissolution; bankruptcy; court supervision; transfers to a qualified intermediary in a 1031 exchange; and buyers that are banks, government authorities, insurance companies, or investment companies.
Who Files and What's Needed
The settlement agent is the primary reporting person, though they may designate another party in writing. Escrow collects information on a Real Estate Reporting (RER) form, including the full legal name, date of birth, address, and TIN for sellers and for the beneficial owners behind any purchasing entity or trust.
What Buyers and Agents Should Do
Plan ahead, especially if you are buying through an LLC or trust. Even with reporting paused, it's worth talking with your escrow officer and attorney early about how you'll hold title and what documentation you may need if the rule returns. Missing or incorrect information can delay a closing, and escrow teams need lead time to gather and verify documents.
Many Santa Barbara and Montecito luxury buyers purchase in cash through trusts or LLCs for privacy and estate planning. If that's you, call or text me at (805) 607-9709 and I'll help you coordinate with escrow so nothing holds up your closing.
