As the principal broker for a RE/MAX franchise in coastal Cannon Beach, Oregon, Alaina Giguiere’s typical responsibilities include marketing homes for sellers, touring homes with buyers, generating new business leads, managing client relationships, and drafting and reviewing contracts with buyers and sellers. Never in her decades-long career did Giguiere think she might be responsible for monitoring and reporting potential criminal activity in the real estate market.
“It is just ridiculous to put that on real estate agents and companies,” Giguiere said. “That is not the role of a real estate agent. There is already so much liability and so many things put on us, as agents, it should not be our job to keep track of who paid cash for a home and who didn’t.”
But she may soon not have a choice: In December, Financial Crimes Enforcement Network (FinCEN), a bureau within the U.S. Treasury Department, disclosed that new reporting requirements were coming for all-cash real estate transactions, with the goal of cracking down on individuals who use the U.S. real estate market to launder money.
According to the National Association of Realtors, all-cash purchases accounted for 23% of existing-home purchases or $518 billion out of the total of $2.25 trillion in existing home sales in 2021.
There are currently only 12 metropolitan areas in the U.S. in which title insurance companies are required by law to file reports identifying individuals who made all-cash real estate purchases exceeding $300,000 through shell companies. These metros are known as “geographic targeting orders” (GTOs) and include Boston, Chicago, Dallas-Fort Worth, Honolulu, Las Vegas, Los Angeles, Miami, New York City, San Antonio, San Diego, San Francisco, and Seattle. The GTOs and $300,000 reporting requirement were established in 2016 by FinCEN and were originally designed to target shell companies purchasing real estate in Manhattan and Miami. <<<Continues on HousingWire.com
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