It could be a sign of money laundering but not always.
Some millionaires may have the full amount in cash saved up in a savings account or in their bank account over the years to afford to pay off a multi million dollar home in cash and in full.
So although it can sometimes be a case of money laundering it isn't always a case of money laundering although the bank may get suspicious but if the money was obtained legally then the bank won't have any problem with someone paying off a multi million dollar home in full from their bank account.