Costing out the FinCEN residential reporting build for a five person title shop

Your 45 minute floor is optimistic and I'd stress test the top end too. When the buyer is an LLC owned by two other LLCs and a trust, collecting the individual level information means emails to people who don't answer email, and the file sits open. My team's experience with any ID collection task is that the median is fine and the tail is brutal. I'd model it as 60 minutes median, 3 hours at the 90th percentile, and see if your $125 still holds.

Also, who does it? If it's your closer, you're taking her off closings during the crunch week. If it's a dedicated person at 63 files a year, that person is idle most of the time.

Where did the 9 percent come from, contract data or a hand count? I'd want to know how many of those 63 were non-financed versus how many just had an entity buyer, because those are different filters and the rule cares about both together. If financing loosens up and more entity buyers take a loan, does the reportable count drop?

Before they sign a $4,200 a year software subscription for 63 files, what does the module actually do that a checklist and a person filing directly can't? At 63 files that's $67 a file of software. I'd run the first two quarters manually, see where the time actually goes, then buy the tool that fixes the part that hurt. Buying the tool first means you never learn which part hurt.

Studying for the exam and this is the part I don't have straight yet. When you say the cascade, who is actually first in line? I understood the settlement agent usually ends up holding it, but is that automatic or does it depend on what the other parties do?

The E&O renewal is the number that could make the other numbers irrelevant. Everything else here is a few thousand dollars a year. A carrier deciding this exposure is worth another 20 percent on premium is a different conversation, and you won't know until you know.

On the separate line item, has anyone asked what the two competing agencies in that market are doing? A $125 line nobody else charges is a reason for an agent to send the file elsewhere, and referral is the whole business for a shop that size. If everybody adds it, fine. If nobody does, thatch's advice costs them files.

Small thing from the management side. Trust transfers show up more than people expect with older owner clients, deed into a living trust, deed out to the kids. Those aren't purchase closings and they may never hit the contract screen at all, because there's no contract. If they do any of that deed prep work, the triggered approach misses it entirely.

Sounds exactly like permit intake. The shops that ask everyone the same three questions never get caught out. The ones that use judgment get caught out about twice a year.

From the buyer chair, I close in LLCs and I move fast. What I care about is when they ask. If the questionnaire lands two days before closing I'll be annoyed but I'll do it. If it lands the morning of and my member is on a plane, that's a delayed closing and I'm calling the other agency next time. Whatever they build, put it at file open.

@cobalt is right about the tail and @thatch is right about mandatory, and those don't actually conflict. Mandatory screen, cheap. The work only fires on the yes. Warrant, the thing I'd worry about is scope creep inside the yes files, where the closer starts doing informal entity cleanup for the client because nobody else will, and suddenly you're the paralegal for free.

I'd be careful with the designation agreement idea. Shifting a reporting obligation onto another party generally requires that party to actually agree in writing, and a settlement attorney who signs one has taken on work he isn't being paid for, so he'll say no most of the time. You also inherit the question of what happens if the designee blows the filing. That's a question for their counsel, not for a workflow diagram.

Do builder sales count? On the projects I've worked, the buyer entity on a spec sale is sometimes a single purpose LLC set up by an investor paying cash. Feels like exactly the shape the rule is pointed at, and a production builder's title partner would see a lot of them.

Can someone say plainly what a designation agreement is? I gather it's a way to hand the filing job to someone else on the deal, but I don't understand who would want it.

The whole cost stack is $8,000 a year at the top end. That's about eleven dollars per closed file across all 700. I'd stop optimizing it and spend the energy on the failure mode instead, because the downside of one missed filing sits in a different order of magnitude than the labor line, and I have no idea how enforcement will actually run in year one. Neither does anyone else.

Is there a version where they build the mandatory intake now and hold off on the software until they have two quarters of real files? @lantern said something close to that and it's the part I'd want, because you'd be buying the tool with data instead of with a guess. I'd also want to know what the underwriter is telling its agents to do, since that tends to set the floor for what's defensible.