Did you know that there are anonymous international buyers paying all cash for luxury properties in America under LLCs? Regardless of your personal feelings on the matter, the U.S. Treasury Department has announced that they’ll be monitoring those transactions in New York City and Miami to identify buyers.

There were hints that this two-city program could roll out nationally, but the program must first prove to be a success.

Why the Feds care

This purchasing method is becoming increasingly common across major cities in America, and the Treasury Department’s Director of Financial Crimes Enforcement Network, Jennifer Shasky Calvery told the NYT:

“We are concerned about the possibility that dirty money is being put into luxury real estate. We think some of the bigger risk is around the least transparent transactions.”

Why you should care

Making money as a Realtor is pretty appealing, especially if you want to survive, and saying no to a transaction based on their funding my prove difficult for some who are trying to just make an honest living.

There’s an ethical issue at play here – the reason for the monitoring is that our government believes this is one way money is being laundered.

“We are seeking to understand the risk that corrupt foreign officials, or transnational criminals, may be using premium US real estate to safely and secretly invest millions in dirty money,” said Calvery.

So how does this effect you?

If you’re in NYC or Miami, if you sell a property that’s over $3M, the government will require the title insurance company to discover the buyers’ names and submit that info to the Treasury database which law enforcement will have access to.

It sounds like a minimal number of deals, but the NYT reports that in Manhattan, 1,045 apartments would have qualified for this information collection process in the second half of 2015 alone, representing over $6.5B in total.

This marks the first time the Feds have required this level of disclosure in transactions, and the pilot program will run from March through August, becoming permanent nationally if the task force offers significant findings of money laundering.

So, the secret deals are over in these two cities, at least until August.

If this goes national, we expect international purchases of luxury properties to diminish, as it becomes less appealing for a very specific, yet exceedingly wealthy type of buyer. Further, real estate practitioners profiting from this type of purchase will likely see a rapid and sharp drop in volume.

#SecretDeals

What’s the relationship between the National Association of Realtors (NAR) and upcoming presidential elections? As the largest trade association in America, NAR advocates every day on behalf of the nation’s 1 million REALTORS® and 75 million property owners. NAR is widely considered one of the most effective advocacy organizations in the country. With numbers like that, it’s no wonder candidates pay attention to the collective needs and wants of NAR members.

But the interest goes both ways and according The Voice for Real Estate, NAR will be watching this year’s presidential election with a keen eye.

The housing recovery in particular is expected to play a large role in the outcome between the parties. According the NAR’s President Moe Veissi, NAR is working with policymakers “to ensure that mortgages are more readily available for qualified buyers.”

What is the goal here?

The goal is to help potential and creditworthy home seekers to obtain mortgage financing and help more people keep their homes or avoid foreclosure through a streamlined short sale process. The realtors believe housing recovery shouldn’t be a partisan issue, but lawmakers must understand the steps needed to keep the upward momentum that has finally begun, going, and cited several initiatives implemented by the present administration that has helped turn the market around.

Republican and Democratic candidates for president often touch on issues important to real estate while on the campaign trail. NAR follows candidates’ proposals carefully, but NAR Deputy Chief Lobbyist Jamie Gregory provides a reminder that proposals must travel a long road through Congress before anything happens: 

“Candidates are posturing and positioning to the voters and trying to attract their votes. So while [the candidates] are saying what their ideal plans are, even if they get elected they can’t do it alone. They still have to go to Congress; they still have to have a partner in this process. And Congress will have a lot of day about what happens.”

Staying up to speed

Current issues regarding NAR and political advocacy on Capitol Hill can be found on NAR’s Political Advocacy Page.

Below, NAR explains more in depth their connection and involvement in the upcoming elections:

#2016election

With the resignation of Congressman Aaron Schock, there is a seat in Illinois that desperately needs to be filled. Schock resigned in light of several allegations that he defrauded his constituents by misspending their money, received inappropriate gifts, and sponsored zero bills during his three-plus terms.

A bit about Brady

Enter Ed Brady. His name will more than likely ring a bell. He is the National Association of Home Builder’s (NAHB) Vice Chairman of the Board and a home builder from Bloomington, Illinois. He has been active in the NAHB leadership structure at the local, state, and national levels throughout his career. Brady has served on the NAHB board of directors for more than ten years and has been a member of the NAHB Executive Board since 2005.

Brady also served as a member of the Bipartisan Policy Center Housing Commission from 2012 to 2014, which was formed in the wake of the housing market crisis to examine the nation’s housing policy and suggest new ideas and approaches to contribute to the dialogue and help further the housing policy reform debate and now, he has thrown his hat into the Congressional arena.

The NAHB pledges their support

Tom Woods, chairman of the NAHB, has issued a statement regarding Brady’s run for the United States House of Representatives: “Ed has been recruited by many in his home district to consider running for the congressional seat being vacated by Rep. Schock. This should come as no surprise, given that he has been active in politics for over 27 years.”

“While Ed remains dedicated to NAHB, he has told his fellow officers and leaders of the association that he feels a strong sense of duty to explore this opportunity to run for Congress. Whatever he may decide, he will have the unwavering support of this association. Ed has said he will decide early next week what his next steps will be.”

Until he makes an official announcement, we can only hope that one of real estate’s own will make an entrance into the office that was so unappreciated by its last occupant.

#RepBrady