Dec 1, 2025
Effective Date
$0
Minimum Price Threshold
800K+
Est. Annual Reports
What Triggers a Report? The 4-Part Test
A real estate transaction must be reported to FinCEN only if it meets all four of the following criteria. This new rule is designed to capture high-risk transactions that could be used for money laundering.
- 🏠
Residential Property
Includes 1-4 family homes, condos, co-ops, and even vacant land intended for such construction.
- 💸
Non-Financed Transaction
All-cash deals or those with private financing from lenders without AML/SAR obligations.
- 💼
Transferee is an Entity or Trust
The buyer is an LLC, corporation, partnership, or trust, not an individual.
- 📜
No Exemption Applies
The transfer is not due to death, divorce, bankruptcy, or other specified low-risk events.
Who is Responsible for Reporting? The Cascade
The rule establishes a "reporting cascade" to identify the single party responsible for filing the Real Estate Report. The obligation falls to the professional who performs the function highest on the list, unless a written designation agreement is in place.
1. Closing or Settlement Agent
As listed on the settlement statement.
2. Preparer of Settlement Statement
If no agent is listed on the statement.
3. Filer of the Deed
The person who files the transfer instrument.
4. Title Insurance Underwriter
The company that underwrites the owner's policy.
Operational Impact on the Real Estate Industry
Estimated First-Year Compliance Costs
FinCEN's own analysis projects a significant financial impact on the industry, primarily due to training, new procedures, and the time required to complete the detailed reports.
Key Challenges for Professionals
- 📋 Data Acquisition & Verification
- 🔒 Secure Handling of Sensitive Information
- ⏱ Tight Reporting Deadlines
- ✍ Lack of Finalized Report Form
- ⚠ Severe Penalties for Non-Compliance
✨ AI Compliance Assistant
Utilize our AI assistant to clarify compliance jargon or check the reportability of a hypothetical transaction.
Jargon Explainer ✨
Enter a term related to FinCEN or real estate compliance for a simplified explanation.
Reportability Checker ✨
Enter details of a transaction to see if it might be reportable under the new rule.
Legal and Legislative Headwinds
The rule faces significant opposition, creating uncertainty about its final form and implementation. Challenges have been mounted in both courts and Congress.
Judicial Challenges
Multiple lawsuits have been filed, arguing that FinCEN has exceeded its statutory authority under the Bank Secrecy Act. They claim the rule is "arbitrary and capricious" and raises constitutional concerns under the First and Fourth Amendments.
Congressional Challenges
Joint resolutions have been introduced in both the Senate and the House of Representatives aiming to disapprove of the rule and prevent it from taking effect, signaling political opposition to the new mandate.