Setco Services would like to share important information that may affect certain residential real estate transactions scheduled to close on or after March 1.
Certain residential real estate transactions are subject to federal reporting requirements issued by the U.S. Treasuryโs Financial Crimes Enforcement Network (FinCEN). These rules are designed to increase transparency and help prevent fraud and money laundering in real estate transactions.
Who This Applies To
A transaction may be subject to FinCEN reporting if the buyer is:
- Purchasing residential property without a traditional mortgage
- Using cash or wire funds
- Purchasing through an entity such as an LLC, trust, or partnership
- Most financed transactions are not impacted.
- What the Buyer May Be Asked to Provide
If a transaction qualifies, the buyer may be required to provide:
- Identification information, including name, address, date of birth, and government-issued ID
- Entity ownership details if purchasing through an LLC, trust, or other entity, including beneficial owners and controlling persons
- Confirmation of the source of funds, including how purchase funds were obtained and where they originated
- Basic transaction details such as property address, purchase price, and method of payment
- What the Seller May Be Asked to Provide
If applicable, the seller may be required to provide:
- Identification information, including name, address, date of birth, and government-issued ID
- Entity ownership details if selling through an LLC, trust, or other entity, including beneficial owners and controlling persons
- Basic transaction details such as property address and purchase price
- What Buyers and Sellers Are Not Being Asked to Do
These reporting requirements do not:
- Trigger additional taxes
- Change ownership rights
- Create public disclosure of personal information.
- Delay the transaction, provided all required information is submitted promptly.
Why the Title and Escrow Company Is Involved
Federal law requires settlement agents to collect and report this information for qualifying transactions. If reporting is required, there may be an additional closing cost associated with gathering and filing the required information.
These requirements are federal mandates. They are not lender-driven or discretionary. Our role is to guide all parties through the compliance process so the closing can proceed smoothly and on schedule. If a transaction requires reporting and the required information is not provided, we will be unable to complete the closing.
Bottom Line
If a transaction qualifies under federal law, additional information may be required. With timely cooperation from all parties, the closing timeline and transaction protections remain unchanged.
Setco Services remains committed to keeping our clients informed and ensuring every closing is handled with accuracy, compliance, and care.
