If you are an all cash buyer you may be surprised by the new rules the FEDS are putting into place. You will no longer be able to hide your identity behind an LLC or other ruses. You are going to need to provide your name and proof of identity to the Title company in order to close the escrow. The proof of identity can be a driver’s license, passport or any other document the authorities may request. The names of owners and their proof will only be available to regulatory agencies and law enforcement. The general public will not have access to the information.
The changes begin in August and run through next February. The initial changes for all cash buyers on purchases over $2,000,000 are temporary, This is a trial run to see how effective the new rules are. If they work the way the FED hopes you can bet they will be permanent.
Manhattan Beach and the Beach Cities see a number of all cash home sales. Many of the buyers are individuals who do not want their names made public. Often the buyer may be a celebrity or a partnership that consists of investors who may be involved in a major remodel or new construction. Some folks are just very private and don’t want the public to know their names.
Since January 1, 2016, 30%, of the total sales in Manhattan Beach were all cash. In Hermosa Beach the figure was 28%. The number of all cash sales in North Redondo and El Segundo was 11%. South Redondo showed 22% of closed sales as all cash.
The FEDS are looking to catch folks who launder money as well as those who might be doing a bit of creative financing at tax time. While there are ways around the law( wire transfers are not included) you can bet that loop hole will be covered in the near future..