The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) rolled out new regulations on reporting of non-financed real estate transactions purchased through trusts this week, increasing the amount of paperwork closing and settlement agents will need to complete on certain transactions.
The new regulation went into effect on March 1 and aims to curb money laundering in the U.S.
Under the new rule, when a legal entity or trust purchases a piece of residential real estate without the use of financing or through a non-regulated lender, closing or settlement agents must report details of the transaction, including the legal entity or trust involved, the owners of that entity, any individuals signing documents on behalf of the entity, the seller, the property being transferred, Social Security Numbers, information about payments made and more.
Reports must be filed by the last day of the month after the month in which the transaction occurred or 30 days after the closing date, whichever is later.
“Although there are many legitimate reasons to use legal entities and trusts to own residential real property, illicit actors intent on laundering funds through residential real property often use legal entities and trusts to disguise their identities and make the proceeds of crime more difficult to identify,” FinCEN said on a FAQ page about reporting. “Illicit actors often favor non-financed transfers (including ‘all-cash’ sales) of residential real estate to avoid scrutiny from financial institutions that have anti-money laundering and countering the financing of terrorism program and Suspicious Activity Report filing requirements under the Bank Secrecy Act.”
Although closing and settlement agents will largely be responsible for reporting and not real estate agents, the National Association of Realtors (NAR) noted it is important for agents to be aware of the change so they can educate and prepare buyers for the new reporting protocol.
NAR added that it is unclear just how many transactions this may impact since the association only has a lump estimate for how many all-cash residential transactions were completed in the U.S. last year by both individuals and entities, which was about 28 percent of all buyers, according to an average of the NAR monthly Realtors Confidence Indexes. NAR said that last year about 22 percent of residential transactions were bought by an entity, including trusts.
The proportion of all-cash purchases by trusts and entities may well be higher than those figures among luxury transactions, where it is much more common to buy with cash and through the use of trusts to maintain buyers’ privacy. During the first half of 2025, about half of all U.S. homes priced between $2 million and $5 million were purchased with cash and over 65 percent of homes priced between $5 million and $10 million were paid in all-cash, according to Realtor.com.
The trade association will host a free webinar with a FinCEN official at 2 p.m. ET on Wednesday, March 11, so that NAR members can better understand the new regulation and best practices. A new FAQ page on NAR’s website regarding FinCEN’s residential real estate rule is also now live.
FinCEN said that the individual responsible for reporting on transactions can either be decided on by real estate professionals involved in the transaction, or through a “reporting cascade” the department created, which specifies a hierarchy of reporting obligations depending on what functions were performed by which real estate professional during the transaction.
The Treasury Department first proposed the new reporting rules in early 2024. They were initially set to go into effect in December 2025, but were postponed to give the industry “more time to comply.” The new law has already withstood a challenge in court by a title insurance company that sought to argue it violated the Fourth Amendment.
“FinCEN’s new reporting requirements will help deter the most egregious cases of money laundering through real estate while giving law enforcement and national security officials better tools to investigate and tackle these flows,” Ian Gary, executive director of the Financial Accountability and Corporate Transparency (FACT) Coalition, said in a statement emailed to Inman.
“Money launderers make poor neighbors and poor landlords. In turning off the spigot of dirty cash, this rule may help correct ongoing market distortions in the residential real estate sector caused by money laundering and give tenants facing negligent landlords a better chance at accountability.”
