FinCEN Real Estate Reporting: Why Compliance Matters to You

Partner with Menifee Valley Escrow – Where Compliance Meets Confidence

Starting December 1, 2025, new federal regulations from the Financial Crimes Enforcement Network (FinCEN) will impact real estate transactions nationwide. These rules require escrow companies to report certain types of real estate closings directly to the U.S. Treasury.

In a recent industry interview, it was revealed that 2 out of 3 escrow companies are not yet prepared for these sweeping changes. At Menifee Valley Escrow, we’re already ahead of the curve—our team is already using approved Buyer and Seller Collection Forms to ensure every covered transaction is properly reported

Working with an escrow company that is ready protects you, your clients, and your business reputation.

What is FinCEN?

FinCEN (Financial Crimes Enforcement Network) is a bureau of the U.S. Department of the Treasury tasked with combating money laundering, terrorist financing, and other financial crimes.

Under the new FinCEN Real Estate Rule (31 CFR 1031.320), settlement agents—including escrow companies—must report certain cash purchases of residential real estate

Who Does It Apply To?

These reporting requirements apply when:

• The property is residential real estate.
• The transaction is all-cash or non-financed (no bank or institutional loan).
• The buyer is a legal entity or trust (LLC, corporation, partnership, or similar).

Examples of transactions that must be reported:

• LLC or trust purchasing a home with cash.
• Purchases financed through private lenders, seller financing, or family loans (not regulated lenders)

How Many Transactions Are Affected?

Industry data shows 10–15% of residential transactions will fall under FinCEN reporting. That’s at least one in ten closings where compliance will be required—and where failure could expose agents and clients to risk.

What Are the Risks of Non-Compliance?

Failing to comply with FinCEN can trigger:

• Federal penalties and fines for escrow companies.
• Closings delayed or voided due to missing or inaccurate reports.
• Reputational damage that can cascade to real estate agents if clients feel their transactions were mishandled.

Since escrow is the “reporting person,” some agents may assume they’re not directly affected—but the reality is:

• If your escrow partner is unprepared, your closing can stall.
• Clients may hold their agent accountable if compliance failures cause delays or legal issues.

Choosing the wrong escrow partner could put your deals—and referrals—at risk.

Why Work With Menifee Valley Escrow?

At Menifee Valley Escrow, we’ve invested in training, technology, and compliance protocols so you don’t have to worry:

✔ Prepared Now, Not Later – All escrows closing after December 1, 2025 are already being reviewed for FinCEN applicability

✔ Standardized Collection – We use the official ALTA Buyer & Seller FinCEN forms to capture all required data

✔ Clear Process & Audit Trail – Every file is documented, reported, and secured for compliance.
✔ Protecting Agents & Clients – By staying ahead of federal requirements, we help agents avoid the fallout of delayed or failed closings.

The Bottom Line for Agents

If you’re working with an escrow company that isn’t FinCEN-ready, you could face:

• Last-minute scrambling to gather missing data.

• Deals delayed—or worse, lost.

• Clients who lose trust in the process.

With Menifee Valley Escrow, you can reassure your buyers and sellers that every closing is handled with federal compliance already built in.

Ready to Partner With Confidence?

Let’s keep your closings smooth, secure, and compliant.