Albuquerque Real Estate | Venturi Realty Group

⚠️ Important Disclaimer

This summary is provided for general informational purposes only and is not intended as legal advice. Buyers, sellers, and real estate professionals should not rely on this material as a substitute for professional legal counsel.

For complete details and official guidance, please visit FinCEN’s Residential Real Estate Reporting page. Always consult with a qualified real estate attorney or compliance professional regarding how the rule applies to specific transactions.

FinCEN Residential Real Estate Reporting

Quick reference for Realtors, buyers, and sellers
Effective for closings on/after March 1, 2026

Overview

FinCEN requires reporting of certain residential property transfers to deter money laundering. Your job: identify potentially reportable deals early and get the right parties ready. All three conditions below must be met — then you still must check the exclusions.

1 Property Type

  • 1–4 family residences
  • Unit within a 1-4 family structure (Condo/Townhome)
  • Share in a co-op
  • Vacant land intended for 1–4 family construction

2 Buyer Type

Transferring to a legal entity or trust.
  • Corporation, LLC, Partnership, Association, or Estate
  • Trusts (grantor places assets under a trustee's control)
Note: Certain regulated entities (like banks, credit unions, and insurance companies) are excluded.

3 Without Traditional Financing

Transfer without traditional financing.
  • Cash transactions
  • Seller financing (real estate contracts, mortgages)
  • Private money lender transactions
Important: If the loan is from a financial institution subject to the Bank Secrecy Act or AML/SAR regulations, it is traditionally financed and excluded.

Before You Decide “Reportable”… Check Exclusions

Even if all 3 criteria are YES, the transfer may be excluded (examples: death/inheritance, divorce, court-supervised transfers, bankruptcy, and certain estate-planning transfers).
Use the official list and definitions at fincen.gov/rre.

What Buyers Must Provide (to the Reporting Person)

Entity / Trust Identification

  • Legal name, trade name (DBA), and Unique ID/TIN
  • Complete current street address of the principal place of business
  • For Trusts: Date trust instrument was executed

Beneficial Owners & Signers

  • Beneficial owners: Full legal name, DOB, residential street address
  • Country or countries of citizenship
  • Unique ID number
  • Signer identifying information

Transaction & Payment Details

  • Total consideration paid
  • Amount of the payment and the method by which it was made
  • Name of financial institution and account number (if applicable)
  • Name of payor on wire/check if payor is not the transferee

Transferor (Seller) Info

  • Full legal name and Date of Birth
  • Complete current residential address
  • Unique identifying number
Title companies (or other reporting persons) will not close the transaction without having all of the necessary information, which could cause closing delays.

Who Files the Report? (Cascade)

Each transaction only requires one reporting person, designated by the following cascade:
Professional listed as the agent on the closing or settlement statement
If none → Professional that prepared the closing or settlement statement
If none → Party who files the deed/transfer instrument
If none → Party who underwrites the title insurance policy
If none → Party who disburses the escrow funds
If none → Party who evaluates title
If none → Party who prepares the deed/transfer instrument
No reporting person carve-out: If none of these functions occur, there is no reporting person and the transfer is excluded.

Is Reporting Required? (Quick Decision Tree)

Step 1
Is this a residential property transfer?
1–4 unitsCondoTownhomeCo-opResidential land (1–4)
Step 2
Is the buyer a legal entity or trust (not an individual)?
If the deed will be in a natural person’s name, answer NO.
Step 3
Is this without traditional financing?
CashSeller financingPrivate money
If a regulated lender with AML/SAR obligations makes the loan, it’s not reportable.
Potentially Reportable
Next step: confirm no carve-out applies.
Not Reportable (based on this test)
One or more conditions not met — or regulated financing is present.
This tool is a simplification. If you hit “YES” to all three, check carve-outs and confirm with the reporting person/title/legal counsel.

Common Exclusions (Not Reportable)

  • Transfers resulting from the death of an individual
  • Transfers incident to divorce or dissolution of marriage
  • Transfers supervised by a court in the United States
  • Transfers made to a bankruptcy estate
  • Individual → own trust for no consideration
  • 1031 transfer to a qualified intermediary
  • Grant, transfer, or revocation of an easement
  • No reporting person per the cascade

FAQ: FinCEN Residential Real Estate Reporting

What is the FinCEN Residential Real Estate Reporting rule?

It’s a reporting requirement for certain non-financed transfers of residential real estate to legal entities or trusts to combat and deter money laundering.

FinCENReal Estate Report
Does this affect most everyday home sales?

Usually, no. Most typical transactions involve a natural-person buyer and/or a traditional mortgage from a regulated lender, which generally means the transaction is not covered.

What transactions are most likely to be reportable?

Transactions are most likely to be reportable when all three are true:

  • The property is residential (1–4 family residences, condos, land for 1-4 units).
  • The buyer is a legal entity or a trust.
  • The transfer is without traditional financing (cash, seller financing, private money).
What does "without traditional financing" mean?

In plain English, it means there is no loan from a financial institution that is subject to the Bank Secrecy Act, Anti-Money Laundering regulations, or Suspicious Activity Reporting requirements. Cash transactions and seller financing are common examples.

Who is considered a beneficial owner?

For an entity, a beneficial owner is an individual who exercises substantial control over the entity OR owns/controls at least 25% of the entity's ownership interests.

What are the penalties for not reporting?

Negligent violations can result in civil penalties up to $1,430 per violation. Willful violations can result in higher civil penalties or criminal penalties including imprisonment for up to five years and a fine up to $250,000.

Who files the report?

The “reporting person” is determined by a cascade (often the professional listed as the agent on the closing or settlement statement).

Where can I see the official requirements?

The official source is FinCEN’s Residential Real Estate Reporting page: https://www.fincen.gov/rre.