New FinCEN Rules and Residential Transactions
QUESTION: I’ve heard that starting on March 1, 2026, a Residential Real Estate Rule put in place by the Financial Crimes Enforcement Network (“FinCEN”) may affect residential closings, particularly cash transactions, and that some new NC REALTORS® forms will include FinCEN language this summer. What should brokers know about these changes?
ANSWER: FinCEN is a bureau of the U.S. Department of the Treasury. The Residential Real Estate Rule it implemented requires certain professionals involved in residential closings (generally for properties with one-to-four residential units) to report information about specific non-financed transfers to legal entities or trusts. The purpose of the rule is to increase transparency and combat money laundering and terrorism financing. The new reporting requirements become effective March 1, 2026.
Brokers are not considered a “reporting person” under the rule. However, brokers need to understand that some buyers will be required to provide additional information to the closing attorney so the attorney can comply with FinCEN’s reporting obligations. For this reason, updated contract language coming later this year will advise buyers that, if applicable, they must cooperate with governmental reporting requirements. Revised agency agreements will also likely include a disclosure explaining the rule and noting that compliance may increase closing costs.
Brokers may encounter situations where a buyer questions or resists the closing attorney’s request for information. In those circumstances, brokers should avoid giving legal advice about whether a transaction is reportable or what must be disclosed. Instead, brokers should explain that the request comes from a federal requirement and that the closing attorney, not the broker, determines what information is necessary to complete the closing. If a buyer refuses to provide the required information, the attorney may be unable to proceed with closing, which could place the buyer in breach of the contract.
The best practice is to advise buyer clients that additional documentation may be required for certain all-cash purchases and encourage open communication with the closing attorney. Brokers can help by facilitating that communication, but questions about the scope of FinCEN reporting or privacy concerns should be directed to the closing attorney.
Release Date: 2/12/2026
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