Understanding New FinCEN Reporting Rules When Buying a Home on LBI
- 9 hours ago
- 3 min read
Buying a Home on LBI
Buying a home on Long Beach Island (LBI) has always come with its own set of unique considerations—coastal building requirements, flood zones, insurance complexities, and a highly competitive market. Now, there’s another important factor buyers and sellers should be aware of: new federal reporting requirements for certain residential real estate transactions.
The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has implemented updated regulations designed to increase transparency in real estate transactions and reduce the risk of illicit financial activity. These rules primarily affect non-financed transactions and purchases involving legal entities rather than individuals.
If you’re buying a home on LBI, selling in the LBI real estate market, or transferring LBI property—especially through an LLC or without traditional mortgage financing—it’s important to understand whether these rules apply.
By: Nathan Colmer | LBI Real Estate Agent | The Van Dyk Group
Cell: 609-290-4293 | Office: 800-222-0131 | ncolmer@vandykgroup.com
Which LBI Real Estate Transactions Are Affected?
FinCEN’s rules focus on non-financed residential real estate transactions, which are common in second-home and investment markets like LBI.
Transactions That May Trigger Reporting Requirements
A transaction may fall under the new rule if it involves:
Cash purchases
Non-financed transactions
This includes situations where:
A lender does not have an anti-money-laundering program
A lender does not report suspicious activity
Seller take-back mortgages
Private mortgages
Hard money loans
Notably, these transfers often involve LLCs, corporations, partnerships, or trusts, which are frequently used in LBI for asset protection and tax structuring.
Transactions Not Included
The following transfers are generally exempt:
Transfers resulting from the death of an individual
Transfers related to divorce
Transfers to a bankruptcy estate
Transfers supervised by a court
Transfers for no consideration to certain trusts
Transfers to a Qualified Intermediary (QI) for purposes of a 1031 exchange
Traditional mortgage-financed transactions with standard lenders are typically not affected because banks already follow strict reporting requirements.
Why This Matters for LBI Buyers and Sellers
LBI is a high-value coastal market with a large number of:
Second-home buyers
LLC purchases
Cash transactions
Investment and rental property transfers
Because these types of transactions are more likely to fall under FinCEN’s reporting requirements, LBI buyers and sellers should be especially alert.
If you’re purchasing a home through:
An LLC
A trust
A corporation
Or any other legal entity
—or if you’re completing the purchase without a traditional mortgage, you may face additional reporting responsibilities.
Failure to comply may result in significant civil or criminal penalties, so it’s important to fully understand the process.
What Home Buyers in the LBI Real Estate Market Should Do Next
If you’re planning to buy or sell a property on Long Beach Island:
1. Speak With Your Real Estate Attorney
They can explain how the new FinCEN rules apply to your specific transaction structure.
2. Discuss With Your Agent Whether Your Transaction Is “Non-Financed”
Cash purchases and unconventional financing are common on LBI, so this matters.
3. Review Your Entity Structure (If Applicable)
Purchasing through an LLC or trust may require additional documentation or reporting.
4. Don’t Delay
These rules can affect timelines, especially if additional reporting needs to be completed before closing.
Buying a Home in the LBI NJ Real Estate Sales Market
These new FinCEN regulations are part of a broader federal effort to increase oversight and transparency in real estate—especially in cash-heavy, high-value markets like Long Beach Island. While they may introduce an extra step in the buying or selling process, they’re manageable with the right legal and professional guidance.
Important Disclaimer: This article is for informational purposes only and is not legal advice. Any potential buyer, seller, or transaction participant should consult a qualified real estate attorney to understand how these rules apply to their specific situation.
If you are looking to buy, sell, or invest in the LBI real estate market, contact me, Nathan Colmer, for expert guidance backed by years of local experience, deep market insight, and a proven track record in helping clients navigate LBI's unique market. My experience extends over 20 years of selling homes on Long Beach Island, with a special focus on second homes and investment properties. In addition to representing buyers and sellers, I personally invest in the LBI real estate market and can share my firsthand knowledge of this investment strategy. Whether you are searching for a vacation home, planning a wise investment, or ready to list your property, I can offer you personalized strategies and unmatched knowledge to help you succeed.
By: Nathan Colmer | LBI Real Estate Agent | The Van Dyk Group
Cell: 609-290-4293 | Office: 800-222-0131 | ncolmer@vandykgroup.com
