BIC TIP #1151: Cash Buyers and the New FinCEN Rule
There is a new rule coming down from the US Treasury, and brokers need to be ready for buyer questions. Stephen Long explains that FinCEN, the Treasury’s Financial Crimes Enforcement Network, has a rule aimed at cash transfers of residential property to an LLC or a trust. It takes effect in March 2026, and you will start seeing it reflected in transactions and forms.
What the Rule Targets
The rule applies when residential property is transferred in a cash transaction and the buyer is an LLC or a trust. In those cases, additional reporting must be made to FinCEN that identifies the parties involved.
The purpose, as Stephen describes it, is to help mitigate money laundering and terrorist financing. Anonymous cash purchases through entities have long been a concern, and this rule is designed to bring more transparency to them.
Watch for Contract Revisions
Stephen notes that you will see revisions to the Offer to Purchase and Contract. In the version coming out in July, the buyer will be required to share information if they are a cash buyer and are titling the property in an LLC or trust.
Keep an eye on form updates and make sure you are using the current version when it is released. Your broker-in-charge can help you stay on top of the changes.
Your Role: Heads Up, Not Legal Advice
Ultimately, the closing attorney will explain the reporting requirements to the buyer at closing. Brokers are not the ones handling the filing.
But you can give your buyers a heads up. If you have a cash investor who buys through an LLC, or a client who purchases through a trust, let them know early that extra information may be requested. Nobody likes a surprise at the closing table, and a buyer who has been prepared will not be caught off guard. For specific questions, refer them to the closing attorney.
The Practical Takeaway
A new FinCEN rule requires additional reporting for cash residential transfers to LLCs and trusts, with changes showing up in the Offer to Purchase and Contract. The attorney will handle the details at closing, but you can prepare your buyers so they know what to expect. A quick heads up now saves a lot of questions later.
