FinCEN Is Changing Some Real Estate Closings Starting March 1, 2026: Here’s What You Need to Know
Starting March 1, 2026, certain residential real estate transactions will be subject to new federal reporting requirements through the Financial Crimes Enforcement Network (FinCEN).
Before you panic — this does not affect every transaction.
But it will affect a specific (and fairly common) type of deal. And if you have a property currently under contract that could fall into this category, now is the time to call your title company.
Let’s break this down in plain English.
Why Is This Happening?
FinCEN is part of the U.S. Treasury, and their job is to combat money laundering and financial crimes.
For years, regulators have raised concerns that some residential properties — especially all-cash purchases made through LLCs or trusts — have been used to hide who actually owns the property.
So beginning March 1, 2026, certain transactions will require additional transparency. That means the title company will need to gather and report ownership information to FinCEN before closing.
Which Transactions Are Affected?
A transaction is likely reportable if it includes all three of the following:
1. It’s Residential Property
This includes:
- Existing 1–4 family homes
- Condos and townhomes
- Vacant land intended to become a 1–4 family property
2. It’s Non-Financed
This means:
- Cash purchases
- Hard money loans
- Seller financing
- Private lending
If the buyer is getting a traditional mortgage from a regulated financial institution, the rule typically does not apply.
3. The Buyer Is an Entity or Trust
Examples:
- LLC
- Corporation
- Partnership
- Trust
Take note: if someone is buying in their personal name and using traditional financing, this likely won’t affect them.
If the purchase is being made in cash through an LLC, that is precisely the type of transaction this rule is designed to address.
What Does This Actually Mean at Closing?
If a transaction falls into this category, the title company will be required to file a real estate report with FinCEN.
That means they must collect additional documentation before closing.
If they don’t get everything they need, closing can be delayed.
This isn’t optional for title companies — it’s a federal compliance requirement.
What Buyers Need to Provide
If the buyer is an entity (like an LLC), they’ll need to provide:
- The legal name of the entity
- The names of anyone who owns 25% or more of the entity
- The name of the person signing on behalf of the entity
- Addresses and identifying information (SSN, EIN, or TIN) for each 25%+ owner
If the buyer is a trust, the title company will need:
- The trustee’s information
- The grantor(s)
- Anyone signing for the trust
In short: FinCEN wants to know who actually owns or controls the entity behind the purchase.
For investors who frequently buy through LLCs, this just means being prepared with documentation early.
What Sellers Will Need to Provide
Sellers aren’t off the hook either.
For reportable transactions, sellers must provide:
- Name
- Address
- SSN, EIN, or TIN
It’s basic identifying information, but it must be collected for reporting purposes.
What About Split Closings?
If the transaction is a split closing (two title companies involved):
- The buyer’s title company is responsible for filing the report.
- Sellers may need to provide their information to both title companies.
Keep in mind: this is where communication really matters.
Why REALTORS® Should Care
This is where it gets important.
Under Section 3.1 of the Utah REPC, buyers and sellers must deliver all documents required by:
- The contract
- The lender
- The title insurance and escrow closing offices
If the title company needs beneficial ownership documentation to comply with FinCEN, that documentation becomes a required closing item.
If it’s missing the file cannot close.
The most common issue we expect to see is simple: someone waits too long to start gathering ownership documents.
That’s why REALTORS® should:
- Identify early if the buyer is an entity
- Confirm whether the transaction is non-financed
- Loop in the title company immediately
- Set expectations with clients early
This isn’t complicated — but it does require proactive communication.
Will There Be Additional Fees?
Yes.
Buyers in FinCEN-reportable transactions should expect to see an additional fee of roughly $300–$400. ($150.00-$200.00).
This covers:
- The reporting process
- Compliance review
- Record retention requirements
Remember: this will not affect most traditional homebuyers.
If the buyer is:
- Purchasing in their own name
- Using traditional financing
This rule generally will not apply.
It primarily affects:
- Cash purchases
- Non-traditional financing
- Entity or trust buyers
What Should You Do Right Now?
If you have a property under contract today and it will close on or after March 1, 2026:
- Call your title company.
- Ask:
“Will this transaction require FinCEN reporting?”
- Ask:
- If you regularly work with investor clients, start educating them now. Let them know they may need to disclose beneficial ownership information for certain purchases.
- If you’re a seller in a split closing, be prepared to provide information to both title companies if requested.
Final Takeaway: The Big Picture
This rule is about transparency. It’s part of a broader federal effort to prevent anonymous shell companies from using U.S. real estate to conceal funds.
For most transactions, nothing changes.
For certain cash or entity purchases, it simply means:
- More documentation
- Earlier communication
- Slightly higher fees
- A little more time built into the closing process
That’s it. No need to panic — just plan ahead.
Starting March 1, 2026, some residential real estate transactions will require title companies to file a report with FinCEN. The most common scenario will involve:
- Residential property
- A non-financed purchase
- A buyer purchasing through an LLC or trust
If that sounds like a transaction you’re working on, reach out to US Title now. A five-minute phone call today could prevent a delayed closing later.
And, as we all know, in real estate, timing is everything.
Have Questions? We’re Here to Help.
US Title Insurance is a trusted resource for Realtors, mortgage lenders, real estate investors, builders and developers across Utah. If you need guidance on a transaction or have questions about this topic, our escrow officers are ready to assist.
