What Real Estate Agents Need to Know About FinCEN Reporting

Understanding FinCEN Reporting

FinCEN (Financial Crimes Enforcement Network) reporting is a federal initiative focused on preventing money laundering in real estate transactions. The requirement will add a new step to the closing process for certain transactions, particularly those involving LLCs or trusts purchasing property with cash.

Cash transactions have been identified as the most susceptible to money laundering. Financed transactions already have safeguards built in through lender anti-money laundering protocols, but cash deals currently don't require the same level of scrutiny. FinCEN reporting will bring cash transactions under the same anti-money laundering oversight that financed transactions already have.

This is a federal reporting requirement, which means agents can't sidestep it by choosing a different attorney or title company. "It's kind of like 1099 reporting or FIRPTA," says Emily Grant, attorney and member at Bluegrass Land Title. "These are federal requirements that apply across the industry, and we all have to comply with them."

However, FinCEN reporting differs from these other federal regulations in its timing requirements. Forms such as 1099s can be handled at the closing table, while FinCEN reporting cannot. The information must be collected and reviewed for compliance before closing happens, which means delays if the paperwork isn't complete.

"What we want to avoid is an agent sending us a contract for a cash transaction with an LLC buyer and expecting to close later that week," Grant says. "We're doing everything we can to educate agents now so they're prepared. Once this requirement takes effect, the reporting will be mandatory, and closings can't proceed without the necessary information."

FinCEN reporting is currently scheduled to take effect on March 1, 2026. The deadline has moved before and could shift again, but agents need to understand the regulations now, before they're managing active transactions that would trigger reporting requirements. 

Who is Impacted by FinCEN Reporting Requirements

Fortunately,  FinCEN reporting will affect a relatively small portion of real estate transactions. If you're a residential agent working primarily with individual buyers who are getting mortgages, you will likely experience limited impact. "If you're a real estate agent and you focus on residential transactions, most of your clients are probably humans, not entities," Grant says. For Bluegrass Land Title's transaction mix, FinCEN will impact about 10% of closings. 

FinCEN reporting applies to residential cash transactions where the buyer is an LLC, trust, or other entity rather than an individual. Transactions that do not require reporting include:

• Any transaction with financing from a lender that has an anti-money laundering program 
• Individual cash buyers
• LLCs or trusts using any form of financing from a lender that has an anti-money laundering program

In short,  if there's a lender involved with proper anti-money laundering protocols or an individual is purchasing the property, no reporting is required. "It's the LLC buyer or the trust buyer paying cash that triggers FinCEN," Grant explains. "And then everybody in the transaction has to comply with it."

When FinCEN requirements are triggered, both buyer and seller must provide information. Even though only the buyer side triggers the requirement (an entity purchasing with cash), the seller still has reporting obligations once FinCEN applies to the transaction. "A seller LLC is fine. But if the buyer is also an LLC, FinCEN reporting is required," Grant says. "In this situation, the seller will have to report information because the buyer brought them under the purview of the rule."

Agents who specialize in investor transactions will encounter FinCEN requirements regularly. If you work with clients who purchase rental properties or investment properties through LLCs, you need to become fluent in these requirements and prepare your clients for what's coming.

For everyone else, this is awareness-level information. Know it exists, understand the basics, and be ready to contact your title company early if an LLC buyer enters the picture.

Reporting Information with FinCEN

The information required as part of FinCEN reporting isn't complicated. Beneficial owners of LLCs must provide their names, addresses, Social Security numbers, and financial institution information, which should be readily available. The challenge comes from ensuring that all parties provide the appropriate information within the required timeframe. 

For an LLC with multiple members, beneficial owners will need to provide their information. Beneficial owners are those with a 25% or more ownership stake or who exercise significant control over the entity. For example, if an LLC has four equal partners at 25% ownership each, all four would need to provide information. If an LLC has 10 members but only three own 30% each and manage the company, those three would report. 

The information itself is straightforward, but coordinating responses from multiple beneficial owners takes time. All of this information must be gathered from all parties before closing. Without it, the transaction cannot proceed.

This also means no last-minute changes. "Agents won't be able to change from an individual buyer to an LLC buyer at the last minute and still maintain their closing timeline," Grant explains. "If the buyer is an LLC that plans to pay with cash, we need to know that from the beginning."

How Bluegrass Land Title Manages FinCEN Reporting

Bluegrass Land Title is handling the heavy lifting on FinCEN reporting. The team has prepared for these requirements and understands what's needed. As a result, agents don't need to become FinCEN experts. They just need to respond to document requests and help their clients do the same.

"We'll do the reporting," Grant says. "You're giving us the information, and then we're submitting it to the government. That obligation is on us."

Bluegrass Land Title is working to streamline the process through our partnership with a trusted third-party vendor called FinCEN Real Estate Report. When an LLC or trust buyer triggers FinCEN requirements, the transaction will be flagged, and the appropriate parties will be directed to submit the requested information via the FinCEN Real Estate Report platform. In a transaction process that already involves substantial paperwork, this is just one more simple form to complete.

The agent's role is straightforward: they need to facilitate the reporting and follow through with providing that information to the title company. When clients receive information requests, encourage them to complete everything promptly. When information comes back, get it to Bluegrass Land Title quickly. The faster everyone responds, the less risk there is of a delay in the closing timeline. 

How Agents Can Prepare for FinCEN

Understanding and preparing for FinCEN reporting requirements now will save agents time and frustration later. 

Before FinCEN Takes Effect

1. Understand what triggers reporting. If you work with investor clients who purchase property through LLCs, learn what transactions will require FinCEN reporting and what information will be needed. Knowing the basics now means you can answer client questions confidently when the requirement goes into effect.
2. Educate your investor clients. Clients who understand the reporting requirements upfront are less likely to be frustrated by additional paperwork or potential delays.  "If you're an agent that tends to represent investors who buy residential property through their LLC, you need to become an expert on this, and you need to educate them on what's going to be required," Grant explains. 
3. Be proactive and learn about FinCEN requirements. If you're uncertain about any aspect of FinCEN reporting, reach out to Bluegrass Land Title now rather than waiting until you have an active transaction. Learn the requirements ahead of time so that you'll be prepared to guide your clients through the process. 

Once FinCEN is in Effect

1. Flag LLC and trust buyers immediately. When you're working with an LLC or trust buyer, let Bluegrass Land Title know at the beginning of the process so the right workflows can be triggered. Early identification prevents delays and ensures information requests go out with enough time for responses.
2. Set clear expectations with clients. Let them know upfront that additional information will be required and that closing speed depends on how quickly they respond. "You might want to set the expectation with your clients that we can do this as quickly as they get the information back to us," Grant says. 
3. Don’t be afraid to ask questions.  If you're uncertain whether FinCEN applies or what's needed, reach out to Bluegrass Land Title at the start rather than discovering issues days before closing. A quick clarifying call at the beginning of a transaction is far less stressful than trying to gather missing information at the last minute.

FinCEN reporting is part of the broader regulatory environment that real estate operates within. Like 1099 reporting, FIRPTA, and other federal requirements that initially seemed burdensome, the industry will adapt. There will be an adjustment period as everyone learns the workflows and requirements, but it will then become standard practice.

Agents can be assured that Bluegrass Land Title is ready. The team has prepared for these requirements and will comply as soon as they take effect. More importantly, BLT is providing proactive education so agents aren't caught off guard when FinCEN reporting begins.

"We generally like to position ourselves as the expert on all things in this industry," Grant says. "Whether agents have questions about FinCEN reporting or any other aspect of their transactions, we're here to support agents before, during, and after the closing, no matter what comes up."