New FinCEN Rules for Cash Buyers: What Every Real Estate Investor Needs to Know

If you’re buying real estate with cash, there’s a new federal requirement you need to know about. As of March 1st, title companies across the United States are now required to file a Real Estate Report Form for all cash transactions and that includes Hawaii.

What the New Rule Means for Buyers

This new rule comes from FinCEN, the Financial Crimes Enforcement Network, a division of the U.S. Department of Treasury that has been operating since 1990. The goal is to combat money laundering in real estate, and it applies to what’s called a “non-financed transfer” which is any purchase that doesn’t involve a traditional mortgage or a lender regulated under federal anti-money laundering rules. That means all-cash purchases, seller financing, and private loans are all included.

The report must be filed by the last day of the month following closing, or 30 calendar days after closing, whichever is later. If it’s not filed, both the buyer and the title company can face civil fines.

What to Expect During the Process

A quick note: your title company is not making this harder on purpose. They’re simply complying with a federal mandate, and frankly, they didn’t ask for this extra step either. Be patient with them when they start requesting documentation.

Here’s what they’ll be asking for: identification documents, details about the purchasing entity or trust, information about the property, how the funds were acquired, and information about the reporting person.

This applies to virtually all property types: single family homes, condominiums, vacant land, co-ops, and more.

Stay Informed, Stay Prepared

If you’re planning a cash purchase in Hawaii or anywhere in the U.S., this video is your heads up. Cash deals will never be quite as simple as they used to be, but knowing what to expect makes the process smoother for everyone.

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Aloha!  

Lynda Gill RS Lic. 63088  

Hawai’i Life Real Estate Brokers 808.346.0056  

LyndaGill@HawaiiLife.com