Understanding the New FinCEN Residential Real Estate Reporting Rule

What Homeowners, Title Companies, and Real Estate Professionals Need to Know

Beginning March 1, 2026, a major change takes effect for the U.S. real estate industry. The Financial Crimes Enforcement Network (FinCEN) will begin enforcing its new Residential Real Estate Reporting Rule, designed to increase transparency in “non-financed” residential real estate transactions and prevent money laundering through anonymous property ownership.

If you buy, sell, or close real estate — especially without traditional financing — this rule will affect how your transaction is reported.
Here’s a breakdown of what’s changing, who’s responsible, and what you’ll need to know.

When Does the Rule Take Effect?

The new rule officially goes into effect on March 1, 2026.

Any qualifying residential real estate transaction closing on or after that date may require a report to be filed with FinCEN. Legacy Title Agency will begin collecting data in February 2026 to be prepared for this deadline.

What Transactions Must Be Reported?

FinCEN’s rule applies to specific non-financed (all-cash) purchases of residential real property in the United States.
A transaction is reportable when all of the following apply:

• The property is residential, meaning a 1–4 family home, condo, co-op, or residentially-zoned vacant land.

• The purchase is not traditionally financed — there’s no mortgage or loan from a financial institution already subject to anti-money-laundering (AML) laws. This means most purchases which utilize private money or hard money loans may be subject to these reporting requirements.

• The buyer (transferee) is an entity or trust, not an individual.

• No exemption applies (see below).

VISIT FINCEN.GOV for more information. Or view the Quick Reference Guide here.

Key takeaway:

If a trust or company buys a home without a traditional mortgage, a Real Estate Report may need to be filed with FinCEN. This report contains many pieces of information that will need to be provided by the buyer and seller securely through secure data collection methods.

Who Files the Report?

The rule assigns responsibility through what’s called a “reporting cascade.” That means FinCEN identifies a specific order of who must file if multiple professionals are involved.

1. The closing or settlement agent listed on the closing statement

2. If none, the person who prepared the closing statement

3. If none, the person who records the deed

4. If none, the title insurance underwriter

5. If none, the person disbursing the greatest amount of funds

6. If none, the title abstractor or searcher

7. If none, the person who prepared the deed

If more than one party fits these descriptions, they can enter a written designation agreement identifying which one will handle the reporting.

In most cases, the title or settlement company will be the reporting party. View the official FINCEN Reporting Cascade here.

Which Transactions Are Exempt?

FinCEN carved out several exemptions to avoid duplicating reporting or capturing personal, family, or court-supervised transfers. Some of the most common exemptions include:

• Transfers resulting from death, such as inheritance or estate administration

• Transfers incident to divorce or legal separation

• Transfers to a bankruptcy estate

• Transfers supervised by a U.S. court

• Transfers to government agencies or regulated financial institutions

• No-consideration transfers by an individual (or married couple) to a trust of which they are the grantor or settlor

• 1031 exchanges involving qualified intermediaries

These exemptions mean most routine family transfers and estate settlements won’t trigger a report — but business or investment entities purchasing homes typically will.

Do No-Consideration (Gift) Transfers Need to Be Reported?

In some cases, yes.

If a home is transferred without payment (a “gift”) to a trust or entity, and it doesn’t fall under one of the specific exemptions, it may still be reportable.

For example, gifting property to an LLC could require a filing — while transferring it to your own revocable living trust likely would not.

That’s why it’s important to let your title company or attorney review the details of your transfer.

What This Means for the Real Estate Industry

The new FinCEN rule is the most comprehensive federal reporting requirement ever applied to U.S. residential real estate - but how does this really affect our buyers and sellers? With these reporting requirements also come data collection requirements. We can expect that buyers and sellers may need to provide additional information to comply with these reports. Buyers will most likely be asked to provide MUCH more information about their entities and provide additional source of funds information.

An important thing to remember is that the following scenarios must be disclosed EARLY in the transaction:

• the name of the entity and all supporting ownership documents for that entity

• financing of a transaction, whether it will be private financing, traditional financing or cash,

• source of funds, whether there may be gift funds, etc

If any of this information changes during the course of a transaction it may trigger a new reporting requirement that may cause delays.

We should also be prepared to see additional terms in a purchase agreement surrounding a party’s contractual obligations to comply with these reporting requirements, and, in a timely fashion.

Lastly, buyers can expect some additional closing costs due to the cost of the reporting requirements.

At Legacy Title Agency, we’re preparing now to ensure our processes, technology, and training are ready well before the March 1, 2026 effective date. That means you can close with confidence knowing your transaction is compliant, secure, and handled the Legacy way.

The Bottom Line

The real estate industry is about to take a big step toward greater transparency — and preparation is key.

If you’re planning to buy, sell, or transfer property through a trust or entity, now’s the time to understand how the FinCEN rule could affect your closing.

Have questions? The Legacy Title team is here to help you navigate these changes — clearly, confidently, and compliantly.

📍 Learn more at www.LegacyClosings.com
Legacy Title Agency — Protecting Your Property, Your Family, Your Legacy.