KEY TO - Wisconsin REALTORS® Association

Transcription

AGENCY LAW REVISIONS
BEST OF LEGAL HOTLINE
Do you understand the revised law?
The questions we answer every week.
SPECIAL EDITION: WRA MEMBER ACCOUNT CARD PROGRAM
May 2006
WISCONSIN
$5.00
MAGAZINE
A PUBLICATION OF THE WISCONSIN REALTORS® ASSOCIATION
TM
NEWS.WRA.ORG
your
KEY TO
WRA
B E N E F I T S
WRA kicks off new membership
card program.
See address panel for your card, special contest and more!
YO U R S O U R C E F O R T H E L AT E S T R E A L E S TAT E N E W S
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WISCONSIN REAL
REAL ESTATE
ESTATE MAGAZINE
MAGAZINE
WISCONSIN
THE OFFICIAL
OFFICIAL PUBLICATION
PUBLICATION OF
OF THE
THE WISCONSIN
WISCONSIN REALTORS
REALTORS®® ASSOCIATION
ASSOCIATION
THE
MAY 2006
MARCH
2004
VOL. 20,
22, NO.
NO. 78
VOL.
Contents
FEATURES
COVER
8
Revised Agency Law
Starting July 1, agency law revisions make brokerage services easier
to understand for consumers. Here are highlights of the revisions.
13
Are You Ready for the Revised Agency Law?
20
Focus Groups
Get your Agency Law Update DVD, a 60-minute video explaining
the revisions to the law and how it will impact your business.
We visited brokerages across the state to hold broker and agent focus
groups about industry trends and concerns – here’s what we found out.
ARTICLES
your
KEY TO
WRA
B E N E F I T S
10
15
WRA Account ID is Your
Key to WRA Benefits!
Peel your WRA account ID card off
Best of the Legal Hotline
What are the typical calls that come in
to the Legal Hotline each week? Look
here to find the questions and the
answers.
Education
Do you want to know more about the
agency law revisions and earn three
continuing education credits? See our
schedule for CE 4B, “Bringing the Law
to the Practice.”
18
This profile highlights home buying
and selling trends in our state, and how
Wisconsin stacks up to the rest of the
country.
21
see if you’re an instant winner. Then
account and access member-only
benefits. And try your luck at our
online contest!
4
17
Product Showcase –
New Agency Disclosure Forms
Starting July 1, you will need new
agency disclosure forms when entering
into an agency relationship. New
forms are available from the WRA.
WISCONSIN REAL ESTATE MAGAZINE, MAY 2006
The Taxpayer Protection Amendment
– It’s Time for Plan B
The Legislature is considering multiple
plans to limit government taxing and
spending. Get the details on the policy
and political struggles from the WRA’s
perspective.
of your magazine mailing panel to
use your number to create an online
The Wisconsin 2005 Profile
of Home Buyers and Sellers
22
Some WRA-Backed Legislative
Initiatives Signed Into Law
A number of legislative initiatives
important to REALTORS® have made
it through the legislative process. Find
out which were signed into law, and
which weren’t.
1
Real Estate
n o t e s
f r o m
t h e
w r a
2006
REALTOR® CHILDREN
SCHOLARSHIP WINNERS
Wisconsin Real Estate MagazineTM is published by the
WISCONSIN REALTORS ASSOCIATION.
®
Trademark issued pursuant to Wisconsin state statute; federal trademark is pending.
Jeff Kitchen, CRS, GRI, Chairman
[email protected]
Roger Rushman, Chairman-Elect
[email protected]
Mike Spranger, ABR, CRS, GRI, Treasurer
[email protected]
William E. Malkasian, CAE, President
[email protected]
Editorial Staff
On April 26, 2006, the Scholarship Committee of the Wisconsin REALTORS®
William E. Malkasian
Foundation awarded its annual REALTOR® Children Scholarships. The scholarships
Publisher
are awarded on the basis of the individual’s scholastic achievement, leadership
ability and service to his or her school and community. Eligible applicants must be
Robert Uhrina
Managing Editor
children of REALTOR® members in active standing with the Wisconsin REALTORS®
Terry O’Connor
Association for at least three years prior to the scholarship application.
Publication Editor
The three recipients and their REALTOR® parents are: Frank Downing (Gwen
Nicole Breithaupt
Graphic Design & Layout
Downing), Hartford; Cassandra Heizler (Fredrick Heizler), Phillips; and Alyssa
Kurth (Mark Kurth), Green Bay. The Foundation congratulates these recipients and
their parents, and wishes them the best in their future endeavors.
Distinguished Service Award
Applications Available
At the January 1985 Board of Directors
meeting, the Wisconsin REALTORS® Association
established the Distinguished Service Award. The
purpose of the award is to provide recognition
to those REALTORS® who have provided many
year’s of leadership and distinguished service to
the Wisconsin REALTORS® Association.
All current members, local association executives
and employees of the Wisconsin REALTORS®
Association with at least five year’s membership or
employment are eligible. The application deadline
is June 2, 2006.
Applications are available on the WRA Web site at:
www.wra.org/DSAaward.
2
Wisconsin Real Estate Magazine, USPS 597-850,
ISSN 1548-0526, is published monthly by the
WISCONSIN REALTORS® ASSOCIATION, 4801 Forest Run
Road, Ste. 201, Madison, WI 53704. Periodical postage
paid in Madison, WI and additional
mailing offices. An annual subscription rate of $5 is
included in membership dues and a copy is mailed
to every paid REALTOR® and affiliate member of
the association. Nonmember subscription rate: $60.
POSTMASTER: please send address changes to the
WISCONSIN REALTORS® ASSOCIATION, 4801 Forest Run
Rd. Ste. 201, Madison WI 53704-7337
Permission to reprint or quote any material from this
issue is hereby granted, provided the Wisconsin Real
Estate Magazine is given proper credit in all articles
or commentaries, and the WISCONSIN REALTORS®
ASSOCIATION is provided with a copy of any reprint.
Advertising of third party products and services herein
does not imply endorsement by the WRA unless specifically stated. Furthermore, the WRA does not endorse,
approve, or otherwise warrant the accuracy or legality
of any information or content contained in advertisements. Any questions regarding advertising policies
should be directed toward the editor.
Contact Us:
4801 Forest Run Rd., Suite 201
Madison, WI, 53704-7337
(608) 241-2047 • (800) 279-1972
legal hotline: (608) 242-2296 • (800) 799-4468
general fax: (608) 241-2901
products/education fax: (608) 241-5168
legal hotline fax: (608) 242-2279
president fax: (608) 242-2267
e-mail: [email protected]
Web site: www.wra.org
Inside
the wra
with Bill Malkasian
E
Bill Malkasian
WRA President
nclosed with your magazine this month
is your new WRA account ID card.
You’ll find it on the mailing panel of
your magazine. Be sure to check the back of it
to see if you’re an instant winner. Then go to
www.wra.org/OnlineContest1 and enter our
online contest.
Why the contests and promotions for the new
card? For one thing, it makes it more fun! But
more importantly, we’re excited about rolling out
this new card, which represents a new level of
service to WRA members and your key to WRA
benefits.
As a REALTOR®, you know the expectations
of your clients and customers. And you know
they’re growing right in stride with advances in
technology. To succeed in today’s world, clients
want to be able to reach you 24 hours a day, seven
days a week. We want to be available to you in
the same full-service way that you are to your
clients.
The number on your card is unique, secure, and
password protected on the WRA Web site. Keep
it with you at all times. It’s your key to WRA
products and services at discounted member
pricing. We use your WRA account ID to identify
you as a member of the WRA, rather than using
your social security number or another form of
identification.
If you haven’t created a WRA online account,
be sure to visit www.wra.org/CreateAccount.
You’ll have access to products, legal information
and class registration 24 hours a day, seven days
a week. See page 4 for information on this new
initiative and the contests we’ve included to kick
off the new card.
On December 28, 2005, Governor Doyle signed the
Real Estate Modernization Act, which includes
changes to our agency law. The revisions to the law
are the result of three years of work by a special
news.wra.org
task force, chaired by our new general counsel
Kevin King. This issue of the magazine gives you
up-to-date information on the new agency law
– how it impacts your day-to-day business, what
forms you’ll need, and where you can get more
information on the changes to the law.
Each year we conduct broker and agent focus
groups around the state to strategize programs for
the upcoming year. Last month, I mentioned that
Roger Rushman (WRA Chairman-elect), Steve
Murray of REAL Trends, and I were traveling to
six sites in Wisconsin to conduct focus groups. I
promised you information on the results of those
focus groups – you’ll find it on page 20.
I also mentioned in last month’s column that May
16-20 are the dates when we will participate in
NAR’s Washington Legislative Conference. We’re
visiting our congressional delegation on May 17.
At the top of our agenda is the passage of SB 1955,
the Health Insurance Marketplace Modernization
and Affordability Act to help small businesses get
affordable health insurance coverage. You should
have received a special “Call to Action” from the
National Association of REALTORS® regarding
this issue, and I hope you’ve had a chance to
respond to this important law.
The Board of Directors met on May 5 to discuss
the end of the Wisconsin legislative session, get
financial updates, and discuss the upcoming fall
elections. We will soon be planning for fiscal
year 2007. I’m always interested in getting your
feedback on our planning and budgetary issues,
so feel free to drop me an e-mail at [email protected]
and let me know your ideas.
Sincerely,
Bill Malkasian
3
WRA Account ID ...
Your Key to WRA Benefits
E
nclosed with this issue of
Wisconsin Real Estate Magazine
is your Wisconsin REALTORS®
Association account ID card. It is
attached to the mailing panel behind
the back of this magazine. And that’s
not all you’ll find! When you peel off
your ID card, you have a chance to win
a $300 certificate from Best Buy. Just
look under the card and see if you are
an instant winner! More details can be
found on page 5.
Simply peel the card from the back of
this month’s mailing panel and keep it
in a safe location. If you lose your card or
do not have immediate access to it, you
can always look up your account online
and print a WRA Info Card that includes
your account ID from the WRA Web site.
That way, you’ll always have access to
the benefits available to you as a WRA
member.
What is the WRA account ID card?
It’s your pass to WRA products and
services. As a WRA member, you have a
unique ID number. Your WRA account
ID links your membership record to the
WRA’s database, which is used to confirm
your status as a member and your right to
member-only benefits.
Your WRA account ID card eliminates the
need for you to remember your number
while you’re away from your office. It also
gives you immediate access to member
discounts (on education and products),
legal information and a wealth of resources
on the WRA Web site!
To kick off this new program, the WRA has
yet one more reason for you to begin using
your account right away – it’s a chance for
you to win great prizes just by visiting
the Web site and logging in. Be sure to
check out the contest details on page 5.
What benefits will my WRA
account ID give me?
First of all, when you log in, you will
automatically see discounted member
pricing since the system will recognize
you as a member when registering for
classes and buying products.
Other benefits you’ll receive as a member
using your WRA account ID include
legal publications and answers to your
questions; tools that help make the real
estate transaction quicker and more costefficient; marketing resources; discounted
member prices; and much more.
Legal publications and answers to
your questions:
❖ Online access to issues of Legal Update
and Broker Supervision News
❖ Legal Hottips and other real estate law
resources
❖ WRA’s Legal Hotline
WRA Account ID ... continued on page 6
4
Do You Have
the
Winning
Number?
Your WRA Account ID
Could Win You Prizes!
To introduce the new WRA account ID card, the WRA
has created two contests.
Instant Winner Contest
See if you’re an instant winner! Simply peel your WRA account
ID card from the back of this month’s magazine mailing panel
and check the back of the card to see if you’re an instant winner!
$300 gift certificate from Best Buy.
Online Contest
Enter the online contest. Simply visit www.wra.org/OnlineContest1,
click on the contest entry link, and log in to the site. You will be
automatically entered in the WRA’s online contest!
Enter to WIN one of these
great prizes:
1st Prize - $400 gift certificate to Best Buy
2nd Prize - four $100 gift certificates to Best Buy
3rd Prize - four $50 WRA gift certificates for products or courses
1st Prize – odds are 1 in 18,500 | 2nd Prize – odds are 1 in 4,500 | 3rd Prize – odds are 1 in 4,500
No Purchase Necessary to Win Prizes!
A purchase will not improve the chances of winning. All winners
will be randomly selected from the pool of entrants. No given entry
stands a greater chance of winning over any other given entry.
Visit www.wra.org/OnlineContest1 to be entered in the contest.
Contest entries must be received by May 31, 2006.
The winner will be selected by June 1 and notified via
e-mail after that date. Taxes are the responsibility of
the winner.
*Void where prohibited.
5
WRA Account ID ... continued from page 4
Tools that help make the real estate
transaction quicker and more costefficient:
❖ ZipForm®, your real estate forms software
❖ Current Wisconsin housing market data
❖ Personalized myWRA section on the WRA Web
site
Marketing resources:
❖ Personalized virtual business card
❖ A listing in the state’s largest database
of REALTORS® and other real estate
professionals
Why is the WRA creating an account card?
The answer is simple: to service you better! Over the past
four and half years, the WRA has grown as an association
of 13,000 members to nearly 19,000 members. In efforts to
service our members more efficiently, we’ve developed
this card for you.
More importantly, we know you are very busy. We wanted
to design a tool you could take with you anywhere that
allows you to expedite your transactions. Please be sure
to put this card in your wallet and carry it with you so it’s
easily accessible whenever you need it.
What if my account is already set up online?
Discounted member prices:
If you have a WRA account set up online, then
you are already enjoying your
member benefits.
Nonetheless, we encourage you to log in at
www.wra.org/OnlineContest1 and enter the contest.
While you’re there, visit www.wra.org/memchange to
verify your contact information.
❖ Online registration for the WRA’s classes and
events
How do I create a personal WRA Web site
account?
❖ Customizable Wisconsin Home newsletter to
distribute to your clients
❖ Discounted prices on real estate products and
classes
❖ Comprehensive WRA membership benefit
package
And, you’ll be happy to know … You no longer
need to use your social security number when
completing exams at the WRA or your local board.
Just use your WRA account ID when logging in to
take an online exam.
To create a personal WRA Web site account, you will
need your WRA account ID from your card. Visit the
WRA Web site at www.wra.org/CreateAccount. You’ll be
asked to create a username and password, and then enter
your e-mail address, first and last name, WRA account ID
and the last four digits of your home phone number. The
account ID and home phone number link to the WRA’s
database, confirming your member status.
After entering the necessary information in all of the
fields and clicking on “Create/Update My Personal WRA
Account,” you will receive an e-mail confirming that your
WRA account has been created.
How do I update my contact information?
To update your contact information, such as home phone
or e-mail address, log in to our online member information
change form at www.wra.org/memchange to submit
a variety of changes to your contact information. Your
changes will automatically update the WRA member
information database when you click save.
6
I forgot my WRA account ID.
What do I do?
If you do not remember your WRA
account ID and cannot find your card,
visit www.wra.org/CreateAccount, and
scroll down to where it says, “Enter your
WRA Information below.” Click on, “Look
up your WRA ID” to the right. Enter your
first name and last name and then click on
“Search.” Your WRA account ID should
display in the results for your search.
Or,
log
in
to
www.wra.org
myWRAMemberInfo and scroll down to
“Additional Membership Information (for
WRA Internal Use Only),”and click on
“Printable WRA Info.”
And finally, if you have a copy of Wisconsin
Real Estate Magazine handy, you can always
find your WRA account ID on the mailing
label – it’s the number above your name.
If I forget my password,
can it be e-mailed to me?
Yes. With the Web site’s enhancements,
you are now able to have your password
e-mailed to you if you forget it, as
long as the WRA has your current
e-mail address. To have your password
e-mailed to you, visit the WRA Web site at
www.wra.org/Password and enter your
username and current e-mail address.
After clicking the “Email my WRA Account
Password” button, you will receive an
e-mail to the address you entered.
Do I use this number for
corresponding with NAR?
No. You will continue to use the card and
number you received from the National
Association of REALTORS® (NAR), which
entitles you to a number of benefits and
discounts on computer purchases, financial
services, office products and more! For
more information on NAR benefits,
visit www.realtor.org/realtorbenefits.
��
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September
25-27, 2006
�
Marriott Madison West • Madison, WI
WORKSHOPS ...
EDUCATION ... FUN ...
GOLF ... EXCITEMENT & MORE!
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7
Agency
Law
M odernization
Revisions Make Brokerage
Services Easier to Understand
BY RICK STAFF AND DEBBI CONRAD
W
isconsin’s Real Estate Practice Law, Wisconsin
Statutes Chapter 452, will be revised and updated
beginning July 1, 2006. The revisions are intended to
make brokerage services easier for the consumer to understand
and bring the law more in line with existing best practices. Some
of the highlights of the revised agency law include designated
agency, pre-agency brokerage services, broker disclosures of
agency and a definition of subagency.
Adding Designated Agency as a Consumer
Choice
One of the most talked-about aspects of the revised agency law
is designated agency. Under the current law clients entering into
agency agreements have the choice of consenting to or rejecting
multiple representation. Multiple representation means that one
broker/company provides brokerage services to more than one
client in a transaction, with the consent of those clients.
Under current law, when a seller with a listed property
rejects multiple representation, the seller is ruling out all of
the buyers who have a buyer agency agreement with that same
broker/company. A buyer with a buyer agency agreement who
rejects multiple representation is ruling out all of the properties
listed by that broker/company. In these scenarios, a rejection
of multiple representation has the unfavorable consequence
of actually diminishing the pool of consumers who might enter
into a transaction with the client. On the other hand, clients who
consent to multiple representation lose the advantage of receiving
full-service negotiation assistance because a broker in a multiple
representation situation cannot place the interests of one client
ahead of the other client in the transaction.
Wisconsin’s revised agency law adds a third representation choice
for clients by introducing the concept of designated agency into
Wisconsin real estate practice. Under current law, when a buyer
who signed a buyer agency agreement with Agent A from ABC
Real Estate wants to negotiate an offer on a property listed by
ABC Real Estate, the only choice is dual agency, which looks at the
broker/company as the agent of two clients.
8
Designated agency shifts the focus from the broker/company
to the two agents who separately negotiate on behalf of the two
clients. The term “designated agent” simply means that each
agent is assigned or designated to provide full-service negotiation
to the client the agent has been working with. Another agent in
the company is “designated” to provide full-service negotiation
to the other client. In other words, the focus in the revised law is
on the two agents who are each negotiating for a separate client.
With this new perspective, each agent is allowed to fully negotiate
on behalf of his or her client just as if the party on the other
side of the transaction was working with an agent from another
broker/company.
How does designated agency affect customers?
It doesn’t. Multiple representation with designated agency is
only an issue for clients, that is, buyers who have signed buyer
agency agreements and sellers who have signed listing contracts.
Customers don’t sign an agency agreement and therefore they do
not have to worry about designated agency.
How should an agent explain
designated agency to buyer clients if
the agent would like them to consider
the properties the agent’s company
has listed?
“Designated agency” means a multiple
representation relationship in which two
clients of a broker/company in the same
transaction receive negotiation services
from separate agents of the broker. This
means that one agent alone cannot provide
designated agency and full negotiation
services to two clients in the same
transaction.
What happens if there is only one
agent?
The agent should explain to the clients
when they sign their agency agreements
that if the agent negotiates for both the
buyer and the seller in the same transaction,
then the agent will have to be neutral.
In other words, this is the dual agency
Wisconsin licensees have been working
with for the past ten years. The agent will
be in “the middle” and cannot place the
interests of one client ahead of the other in
negotiations.
How do clients consent to multiple
representation?
The revised law provides three choices
for clients: no multiple representation,
multiple representation as it exists under
current law (dual agency) and multiple
representation with designated agency.
Clients will continue to select the form of
representation they prefer at the time they
execute the agency agreement. Most clients
will likely choose designated agency so
that they can have full-service assistance
from their agent while at the same time
not unnecessarily limiting the pool of
potential parties for their desired real
estate transactions.
The law talks about the designated agency
option beginning for agency agreements
taken after July 1, 2006. However, consent
to multiple representation with designated
agency may also be obtained for buyer
agency agreements and listings signed
before July 1, 2006. Brokers may go to their
existing clients and have them sign new
agency disclosures to take effect on July 1,
2006.
Pre-Agency Brokerage
Services
The revised law also recognizes that
there is an initial stage in the interactions
between an agent and a consumer when
it is not yet appropriate to require the
consumer to choose an agency relationship.
For example, a buyer first meeting a
salesperson and receiving market data and
property information is not always ready
to decide if he or she wants to enter into a
buyer agency agreement.
Accordingly, the revised law provides
that licensees may provide brokerage
services to parties without having any
agency relationship in place up to the time
when negotiations begin. This initial preagency role of providing information to
consumers may include showings prior
to negotiations, but appropriate agency
disclosures must be given and an agency
relationship must be established before
negotiations begin.
In this pre-agency stage, the salesperson
would owe all parties essentially the same
duties owed to all parties under current
law. In addition, an agent in the pre-agency
stage may not give any party advice or
opinions that are contrary to the interests
of any other party unless required by law.
Broker Disclosures
Regarding Agency
Relationships
The revised law establishes plain-English
agency disclosures to help brokers explain
agency relationships to consumers in a
more meaningful way.
The revised statutes establish mandatory
agency disclosure language for clients that
will appear in the agency contract between
the broker and client, that is, the listing
contract or buyer agency agreement,
once the Department of Regulation and
Licensing (DRL) revises those forms. The
WRA has developed a “Broker Disclosure
to Clients” form to be used until that time
comes (the goal is the beginning of 2007).
The new mandatory agency disclosure
language for customers will continue
to appear in a separate form. However,
because a consumer under the revised
law can wait until he or she is ready to
negotiate before selecting the type of
agency relationship he or she wants, the
deadline for giving the agency disclosure
form to customers is extended to the point
where negotiation begins. The WRA has
developed disclosure forms for customers
– one for residential and one for nonresidential transactions.
Defining Subagency
Relationships
Under the statutory revisions effective
July 1, 2006, cooperating brokers who are
engaged by another broker to provide
services in a transaction are subagents.
These cooperating brokers are agents of
the other broker, not the other broker’s
client. For example, a subagent helping a
buyer purchase a new home is working as
the agent of the listing broker. Subagents
cannot place their own interests ahead of
the interests of the other broker’s client (the
seller in the example) and cannot provide
advice and opinions to the parties in a
transaction that are contrary to the interests
of the other broker’s client (the seller),
unless otherwise required under law.
Learn More
Want to learn more about the revisions to
the real estate brokerage law? The WRA
has several ways for you to get more
information.
1) Visit the WRA Web site and look for
the April 2006 Legal Update entitled
“Chapter 452 Modernization Act,”
available at www.wra.org/LU0604. A
practice-oriented Legal Update will also
be available in June.
2) The changes to Wis. Stat. ch. 452 can
be found at www.legis.state.wi.us/
statutes/Stat0452.pdf.
3) See page 17 for information on the new
Agency Disclosure Forms. Use of these
forms is mandatory as of July 1, 2006.
4) Real estate continuing education
course CE4B, “2006 Agency Law
Revisions – Bringing the Law to the
Practice” will also help bring you up to
speed. Look for the course schedule at
www.wra.org/CEcourses.
5) See page 13 for information on the
WRA’s new, 60-minute Agency Law
Update DVD, available for $14.95
including tax, shipping and handling.
This one-hour tape will give you an
overview of the new law and its impact
on how you do business.
Rick Staff, former WRA senior staff attorney, is owner of Rick Staff Consulting, LLC.
9
Best of the Legal Hotline
A week doesn’t go by that the hotline team doesn’t answer the following questions:
Questions We Answer Every Week
BY DEBBI CONRAD AND TRACY RUCKA
Inspection Contingency: Notice vs. Amendment
The buyer should decide
An offer has a standard inspection contingency and the seller
has the right to cure. The home inspection is completed and
the report shows many items that appear to be defects. Should
the broker give a notice of defects or an amendment?
Let the buyer decide! The role of the real estate licensee is to
explain the inspection contingency and the buyer’s options, and
then let the buyer make an informed decision. In most situations,
the buyer basically has three choices:
1. Do nothing
The buyer accepts the property in its current condition and the
parties proceed to closing.
2. Give a notice of defects
This is essentially a demand that the seller repair all of the items
listed in the notice. Remember that the buyer should only list items
from the home inspection report that fit the definition of a defect,
as stated in the inspection contingency. Remember to include a
copy of the report with the notice.
Upon receipt of a notice of defects, the seller may:
•
Elect, in writing, to cure all listed defects in a good and
workmanlike manner
•
Prepare an amendment to propose a different way to
handle the listed defects, e.g., repair only some of the
defects, give the buyer an allowance for repairs and/or
reduce the purchase price
•
Elect, in writing, not to cure and allow the offer to become
null and void
•
Do nothing and allow the offer to become null and void
3. Propose an amendment providing a different way to
address the items listed in the inspection report
Rather than making a list of the defects to which the buyer objects
and having the seller repair them all in a good and workmanlike
manner, the buyer may propose a price reduction, repair
10
allowance or escrow, specify repair techniques or contractors or
any combination thereof. The seller may then:
•
Accept the amendment
•
Propose a different amendment
•
Do nothing and the underlying contract remains in place
unless the buyer gives a notice of defects before the
applicable deadline
As time allows, the buyer may use a combination of these
strategies. The buyer may not unilaterally make the offer null and
void if the seller has the right to cure.
For more information about the home inspection contingency,
see Legal Update 99.10, “Home Inspections,” online at
www.wra.org/LU9910 and Legal Update 04.08, “Effective Home
Inspections,” online at www.wra.org/LU0408.
Personal purchases
Licensees do not earn commission on personal purchases
An agent who wants to buy a property for him or herself
often asks, “How much commission will I earn if I buy this
property?”
The answer is almost always “none.” As a principal in the
transaction, that is, the buyer, this individual is not providing a
brokerage service to another person for which a commission may
be earned.
The first step when an agent wants to buy a property for him or
herself is to check company policy regarding personal purchases.
If that policy allows the buyer/licensee to proceed independently,
the buyer/licensee may write his or her own offer (as the buyer,
not as a licensee) and negotiate an incentive from either the listing
broker or the seller. An incentive from the seller may be requested
in the offer to purchase. An incentive from the listing broker, on
the other hand, should be negotiated separately outside of the
offer to purchase because the listing broker is not a party to the
offer to purchase. It may be prudent to establish the incentive
before submitting the offer to the listing broker and the seller
must consent to the incentive in the offer.
Buyer agency and the commission
The buyer’s agent is not automatically procuring cause
When a buyer begins to work with one agent to buy a property
and then decides to hire an agent from another company as
a buyer’s agent, is the buyer’s agent the procuring cause of
the sale?
Not necessarily. The buyer does not dictate which cooperating
broker receives compensation offered on the MLS. Procuring cause
is determined by reviewing the uninterrupted series of events that
resulted in the sale of the property to the buyer. Provided the first
broker introduced the property to the buyer and did not abandon
or estrange the buyer, the first broker might be procuring cause,
depending upon the circumstances.
The good news for the buyer’s broker is that the buyer’s broker still
may be entitled to the fee specified in the WB-36 Buyer Agency/
Tenant Representation Agreement. Before the buyer enters into a
buyer agency agreement, the agent should explain that choosing
buyer agency might increase the cost of the transaction for the
buyer, depending on how the contract is drafted and whether the
buyer agency fee is paid by the listing broker or seller.
For more information on buyer agency, see Legal Update 05.09,
“Buyer Agency Practice,” online at www.wra.org/LU0509. For
more information about procuring cause, see Legal Update 02.04,
“What is Procuring Cause?” online at www.wra.org/LU0204.
Is it Mortgage Fraud?
Use the sniff test
This question takes on many forms: the mortgage broker wants
an amendment to raise the purchase price and create a second
mortgage that will be forgiven after the closing, the lender wants
the price raised and the seller to give the buyer funds on the side,
or the lender has a limit on the amount of pre-paids and closing
costs.
Mortgage fraud occurs anytime a participant in a real estate
transaction misrepresents facts, or is coaxed into misrepresenting
facts, with the intent to bilk another party out of its money.
Mortgage fraud can be committed by any of the participants in
a transaction including sellers, buyers, real estate brokers and
salespersons, mortgage brokers, mortgage bankers, appraisers,
and loan originators. Fraud may occur when there are two sets of
offers drafted, one representing the “real deal,” and the other the
fraudulent transaction. Fraud can also occur when the parties have
inflated the sales price by using a “forgivable” second mortgage,
phony work orders or money passed under the table at closing.
A real estate licensee cannot participate in fraud. Wis. Admin.
Code § RL 24.085 provides that “No licensee shall draft or use any
document which the licensee knows falsely portrays an interest in
real estate.”
The Department of Financial Institutions (DFI) admits there is no
black and white test to determine if there is fraud, and suggests
that brokers apply the sniff test: if it smells funny, carefully
examine the transaction. If it appears to be fraudulent, submit a
detailed account to DFI.
Other effective tactics include:
•
Prepare any rewritten offers to purchase to be 100 percent
accurate, indicate that it is a rewrite of a previous offer,
and reference the original offer, purchase price and dates
therein.
•
Ask for the lender’s request in writing and submit that
documentation to the DFI.
•
If the lender and/or others persist with a fraudulent
scheme, issue a written memo or letter to the parties,
the lender and other involved providers warning of the
fraud and urging them to consult with their attorneys and
rectify the fraud. If they do not, the broker may need to
cease participation.
Bump Notice
Time starts running upon the buyer’s actual receipt, not
delivery
A buyer’s agent called the buyer and told him that she had
received a bump notice via fax. However, the buyer’s agent
did not take the notice to the buyer until some time later.
When does the 72 hours start?
According to the continued marketing provisions of the WB-11
Residential Offer To Purchase, the time runs from the buyer’s
actual receipt of the notice. The bump notice must be delivered
according to the delivery methods in the offer and the buyer must
11
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Education & Products
Earn Your SRES® Designation!
Broker Pre-license
The vast majority of seniors are homeowners. AARP estimates
that of the 83 percent of seniors who own their homes, nearly
3 million of them will change residences in the next two years.
These prospective clients need someone who can advise them on
the best way to maximize their equity and plan for the future.
This course will be offered on June 12-15, 2006 in Madison. It is
also available through a video self-study version or a self-study
Internet program. Completion of this program, passing the
broker exam and applying for your broker’s license fulfills your
2005-2006 continuing education requirements.
To help you meet the specialized needs of seniors, attend the
SRES program scheduled on August 3-4, 2006 in Brookfield.
Visit: www.wra.org/BKPLcourses
The Senior Advantage Real Estate Council is the sponsor.
The SRES® Designation is not affiliated with or endorsed by NAR.
Visit: www.wra.org/SREScourses
Sales Pre-license
Madison & Milwaukee
To obtain a real estate license in the state of Wisconsin, you must
first complete 72 hours of approved education courses such as
our sales and licensing course. Second, you must pass a stateadministered exam. The WRA is offering an eight-day accelerated,
72-Hour sales program on July 17-20 and 24-27, 2006 in Madison.
Due to the good response to the sales pre-license class held in
Milwaukee in early April, the WRA is adding another sales
pre-license class in Milwaukee, to be held July 31-August 3, and
August 7-10, 2006. Brokers can purchase a $50 discount coupon
for only $10, which entitles your new recruit to a $50 discount on
the registration fee. Your new recruits can be ready to take the
exam as soon as they complete the class. Ask them to call and
register today – 1-800-279-1972! This program is also available
through self-study video (VHS or DVD) or self-study Internet
programs.
Visit: www.wra.org/SalesPLcourses
QuickStart
As you recruit, don’t forget to send your new agents to the fourday QuickStart Program (offered in two, two-day sessions). The
course contents include prospecting, open houses, incorporating
technology into your business, creating a business plan, working
with buyers and sellers, and money management, plus much
more. Modules 1 & 2 will be offered on June 7-8, 2006 and
Modules 3 & 4 on July 13-14, 2006 at the WRA in Madison. Upon
completion of the four modules and passing the exam, agents can
receive credit for the completion of GRI Course 1. The fee is only
$240; however, the WRA offers a new member discount of $40,
which makes the cost of this course only $200. It’s a fantastic price
for four days of instruction for your new agents.
Visit: www.wra.org/QScourses
Appraisal CE
You can complete some of your Appraisal CE through the WRA’s
Distance Learning Program. Courses available include:
Relevant Environmental Issues for Residential Appraisers
This four-hour course is designed for residential appraisers
interested in learning how current environmental concerns affect
property values.
Procedures for the Unusual Residential Appraisal Assignment
This four-hour course was developed for the experienced
residential appraiser who wishes to gain insight to the nuances
of valuing unusual residential properties. It is based on the use
of case studies developed to illustrate the unique challenges that
can arise from these residential assignments.
Economics of Residential Finance
This four-and-a-half hour course outlines the basics of the
mortgage lending and brokerage industries and how they provide
the background for residential valuation.
National USPAP
This seven-hour course focuses on recent changes to the
Uniform Standards of Professional Appraisal Practice (USPAP)
(Mandatory course).
Fee per course: Appraisal Section Member - $60; USPAP: $130
WRA Member: $65; USPAP $140
Two-day Buyer Agency Course
Stand Out as an ABR® - join over 50,000 members who are
succeeding as Accredited Buyer Representatives. Get accredited
as an ABR® and move ahead with specialized courses. Start your
Accredited Buyer Representative (ABR) designation by attending
a class on August 23-24, 2006 in Appleton. This is probably one
of the hottest classes right now … because Buyer Agency is fast
becoming the way buyers want to do business. This two-day
course covers agency, service delivery, marketing and promotion,
and negotiation and risk management. To earn your ABR
designation, you need to complete the two-day Buyer Agency
course plus one elective Buyer Agency course and complete five
transactions representing a buyer. This course fulfills your 20052006 CE4 course. Call and register today!
Do you need an elective course to complete your ABR designation
course? Effective Negotiating for Real Estate Professionals (WCR)
August 25, 2006.
Visit: www.wra.org/ABRcourses
14
Sales & Mktg
Management
Pre-license
Education Calendar
Date
June 12-15, 2006
July 17-20; 24-27, 2006
July 31-Aug. 3; 7-10, 2006
August 14-17, 2006
Sept. 11-14; 18-21, 2006
Course
36-Hour Broker
72-Hour Sales
72-Hour Sales
36-Hour Broker
72-Hour Sales
Date
May 17-18, 2006
June 7-8, 2006
July 13-14, 2006
August 3-4, 2006
August 9-10, 2006
August 23-24, 2006
August 25, 2006
Course
Quickstart Module 3 & 4
SRES
Buyer Agency
Buyer Agency Elective:
Effective Negotiating for RE Professionals
September 7-8, 2006
September 24-27, 2006
September 25, 2006
September 25, 2006
Convention
Real Estate CE
Appraisal
CE
www.wra.org/CourseSchedule
Time
8:00 a.m. – 5:00 p.m.
8:00 a.m. – 5:00 p.m.
8:00 a.m. – 5:00 p.m.
8:00 a.m. – 5:00 p.m.
8:00 a.m. – 5:00 p.m.
Location
Madison
Madison
Milwaukee
Milwaukee
Madison
Location
Madison
Madison
Madison
Brookfield
Madison
Appleton
Appleton
Early Reg. Thru Early Reg.
$240 (1)
$240 (1)
$240 (1)
$400
$240 (1)
$260 (1)
$130 (1)
Madison
GRI Course 3
CRS202
CRB-The Recruiter Paradigm
Intro to CCIM
CRS Elective: CRS 107-Mastering the Art
of Selling New Homes
ABR
ABR Elective- Harnessing Your Power (WCR)
Annual Convention – The RUSH is On!
Regular Reg.**
$255 ❂
$325 ❂
$325 ❂
$255 ❂
$325 ❂
Location
Madison Marriott West
Madison
Madison
Madison
Madison
Madison
Before 8-15
$335
$285
$495
$320
$159
Regular Reg.
$240 (1)
$240 (1)
$240 (1)
$410
$240 (1)
$270 (1)
$140 (1)
$240 (1)
$240 (1)
Until 9-5
After 9-5
ATD
$345
$355
$375
$295
$305
$325
$505
$515
$535
$330
$340
$360
$169
$179
$199
Madison
Madison
$280
$159
$290
$169
Registration
1-800-279-1972
2-Day Pass
$89 (Before 8/15/06)
$300
$179
$320
$199
1-Day Pass
$65 (Before 8/15/06)
Check out the Appraisal Continuing Education Modules available by VHS
Date
May 11, 2006
May 13, 2006
May 17, 2006
May 24, 2006
May 24, 2006
June 7, 2006
June 14, 2006
Course
2005-2006 CE 4B & 3
2005-2006 CE 3-video
2005-2006 CE 2 & 1
2005-2006 CE 4B & 3
2005-2006 CE 4B & 3
2005-2006 CE 4B
2005-2006 CE 3 & 4B
June 15, 2006
June 15, 2006
June 16, 2006
June 21, 2006
June 22, 2006
June 22, 2006
June 23, 2006
June 29, 2006
June 29, 2006
June 30, 2006
July 12, 2006
July 13, 2006
July 20, 2006
2005-2006 CE 1 & 2
2005-2006 CE 1 & 2
2005-2006 CE 3 & 4B
2005-2006 CE 2 & 1
2005-2006 CE 1 & 2
2005-2006 CE 3 & 4B
2005-2006 CE 3 & 4B
2005-2006 CE 1 & 2
2005-2006 CE 4B
2005-2006 CE 3 & 4B
2005-2006 CE 3 & 4B
2005-2006 CE 3 & 4B
2005-2006 CE 3 & 4B
Time
9:00 a.m. – 5:00 p.m.
8:00 a.m. – 11:30 p.m.
8:30 a.m. – 4:30 p.m.
8:30 a.m. – 4:30 p.m.
9:00 a.m. – 5:00 p.m.
8:30 a.m. – 12:00 p.m.
9:00 a.m. – 5:00 p.m.
Location
Brookfield
Manitowoc
Cedarburg
Cedarburg
Madison
Sheboygan
Pewaukee
Registration
Member* Non-Member*
800-279-1972
$24/course $32/course
920-553-6227
Call for information
262-338-8114 or 262-375-4730
262-338-8114 or 262-375-4730
800-279-1972
920-57-7908
414-777-3007
sponsored by Amcore Bank
9:00 a.m. – 5:00 p.m. Brookfield
800-279-1972
8:30 a.m. – 4:30 p.m. Stevens Point 800-279-1972
8:30 a.m. – 4:30 p.m. Stevens Point 800-279-1972
9:00 a.m. – 5:00 p.m. Madison
800-279-1972
8:30 a.m. – 4:30 p.m. Marshfield
800-279-1972
9:00 a.m. – 5:00 p.m. Milwaukee
800-279-1972
8:30 a.m. – 4:30 p.m. Marshfield
800-279-1972
8:30 a.m. – 4:30 p.m. Mosinee
800-279-1972
9:30 a.m. – 12:30 p.m. Elkhorn
262-723-6851
8:30 a.m. – 4:30 p.m. Mosinee
800-279-1972
9:00 a.m. – 5:00 p.m. Madison
800-279-1972
9:00 a.m. – 5:00 p.m. Brookfield
800-279-1972
9:00 a.m. – 5:00 p.m. Milwaukee
800-279-1972
Nonmembers pay an additional fee for all courses. (1) Fee for all four modules. * Must be postmarked or received by the WRA 14 days prior to start of class. ** Fee until day of class – additional fee
charged at the door. # Group discount for six registrations mailed in one envelope. ┼┼ Includes 2005 USPAP book. ❂ Plus books.
15
spotlight on...
Brenda Uotinen
Brenda Uotinen
One of the First …
In the 24 years since Brenda Uotinen (pronounced Yootinen)
became a REALTOR®, there have been a lot of changes in
the industry. For one thing, Brenda was the first female
REALTOR® at her firm, and was among only a handful of
women agents in Superior, Wisconsin, when she entered the
real estate profession.
Brenda actually started out in the more “typical” female
profession of secretary for a real estate company. “As I typed
up contract after contract and saw what the agents were
making, I decided to try real estate sales for myself!” Shortly
after Brenda got her license, interest rates rose to 17 percent
and real estate sales slowed, but she stuck it out.
Coffee, Doughnuts, and the MLS
Brenda and Ginger Eckman, another area REALTOR®,
organized the MLS meetings. Each week, the agents would
gather and exchange sheets of listings. The next week they
would get together again, cross out those listings that had
sold, and update their sheets with new listings.
“Back then it was a great way to catch up and network with
other REALTORS® each week over coffee and doughnuts and
the MLS,” she says. “I miss that part of it. You got to know the
other agents pretty well. When I had my daughter the other
women REALTORS® had a baby shower for me. These days
the industry is more competitive and you don’t get to know
each other as well.”
So Much Change in So Little Time
Many other things have changed since Brenda started her
career, especially in the area of technology. “I had to buy a
new fax machine recently and I wondered, ‘how did we ever
live without the fax machine?’”
Well, as Brenda does happen to remember, they typed offers
with carbon paper and made several trips a day to the post
office or other delivery spots. “Technology does help make
things quicker and easier,” she says. “Now I can fit more into
my day, but sometimes it’s hard to keep up with all of the
technological advances.”
16
I remember when a couple of agents in our office got the first
computers made available to the public. They looked like
small TVs and the floppy disks were the size of 45 records
– and they were floppy! There wasn’t any Internet and then
came AOL. We thought that was something – waiting for the
dial up to connect to send a letter. It seems so archaic now!”
Selling Real Estate in a Small Community
“My favorite part of real estate is listing and selling singlefamily properties,” says Brenda. “I like meeting people.” Being
in a small community, she has many clients whom she also
calls her friends. However, being in a small community also
means she has to be able to sell vacant land and commercial
properties. “You have to be more diverse in a smaller area or
you really limit yourself,” she says.
Brenda became owner of Coldwell Banker/Van Vleck-Clemens
REALTORS® this past year, after having worked there for
22 years. She has two offices and 11 people in Superior and
Solon Springs, a recreational property area, about 45 minutes
away, where her brother also sells real estate. “I have good,
conscientious agents, and I like the small-office atmosphere.”
She is currently the Board President for the Superior Area
Association of REALTORS®. “I like being involved with the
board,” she says, “It gives me some say in what goes on.”
In addition, she was just appointed to the St. Mary’s Hospital
Foundation, and she enjoys volunteering in the schools.
Brenda’s husband, Al, enjoys dirt track racing in his spare time,
so they spend some time at the track. They have a daughter,
Alyssa, 16, and a son, Brady, 11, both of whom play hockey,
plus her son plays summer sports. Brenda likes to be outdoors
and the family enjoys camping.
Recommendations to new REALTORS®
“These days it’s so competitive – if you don’t know people
it’s tough,” she says. “However, don’t give up easily, treat
your clients/customers like you want them to come back, and
they will. They’ll also refer you. Don’t forget that the customer
comes first. Do your best job and make sure people know
you’re sincere. And treat everyone honestly and fairly.”
3
2
N
EV
1
The “Broker Disclosure to Clients”
form contains the mandatory disclosure
language for clients. This language
will eventually appear in revised listing
contracts and buyer agency agreements.
For the meantime, the WRA has developed
the “Broker Disclosure to Clients” form to be
used until the Department of Regulation and Licensing
completes the development of the revised agency contracts, slated
for 2007. The “Broker Disclosure to Clients” form gives clients a
choice of multiple representation relationships with designated
agency, multiple representation relationships without designated
agency, or no multiple representation relationships.
D
R
A
FT
The new forms follow the requirements of the modernized
agency law, which creates a friendlier, plain-English
agency disclosure model to help consumers
better understand the complicated world
of agency relationships. The Wisconsin
REALTORS® Association (WRA) has
created three different forms – one
with broker disclosure language for
clients, one with disclosure language
for customers, and one for nonresidential customers – so that every
party receives the most effective
agency disclosure possible.
The “Broker Disclosure to Customers” form for consumers not
entering into a client relationship will continue to be a separate
form. The customer does not need to determine the type of agency
relationship desired and sign an agreement or disclosure form
until he or she is ready to negotiate. The “Broker Disclosure to
Product Codes:
WRABDCL - Broker Disclosure to Clients
WRABDCU - Broker Disclosure to Customers
WRABDNC - Broker Disclosure to Non-Residential Customers
You may order forms via the Internet at www.wra.org/forms, by
calling 1-800-279-1972 or 608-241-2047, or by mailing in your order
with check made payable to the WRA to 4801 Forest Run Road,
Suite 201, Madison, WI 53704.
Manufacturer: Wisconsin REALTORS® Association
Web site: www.wra.org/forms
Pricing: Pricing: Prices for each form are as follows (shipping and tax included): Pack of 25 = $14.50, Pack of 50 = $20.85, Pack of 100 = $34.00,
Pack of 250 = $70.40. For quantities over 250, visit the WRA Web site or call the WRA.
17
20
06
The new forms will be available in late
May … so don’t wait to order them! Advance
orders are accepted.
al
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New Agency Disclosure Forms Needed July 1
T
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he License Law Modernization Act, signed into law by
Governor Doyle last December, revises the information
that real estate brokers must disclose to consumers about
agency relationships. Starting July 1, 2006, the new forms must
be used when entering a new agency relationship.
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REALTOR
®
productSHOWCASE
Non-Residential Customers” is similar to the “Broker Disclosure
to Customers” form, but it does not have a section prompting
the party to acknowledge receipt of the form in writing. Written
acknowledgement of the party’s receipt need not be requested if
the transaction does not involve property used, or intended to be
used (e.g., a vacant lot in a subdivision), for one-to four-family
residential purposes.
The new forms replace:
WRADMR Disclosure of Real Estate Agency
w/Multiple Representation
WRADRA Disclosure of Real Estate
Agency
WRARAC Disclosure of Agency with
no Signature Lines
WRARMC Disclosure of Agency
w/Multiple Representation with
Signature Lines
For more information on the revised
agency law, see pages 8 and 9.
The Wisconsin 2005 Profile of
Part III
or across the country. Consequently,
home buyers and sellers are
becoming increasingly sophisticated
and require real estate professionals
to meet their heightened expectations
for service. Even with increasing
access to information, however, most
home buyers and sellers depend on
the experience and expertise of real
estate professionals to assist them
with the complex task of completing
a real estate transaction. Because of
this evolution, it is important for
real estate professionals to have a
clear picture of today’s home buyers
and sellers. The 2005 NATIONAL
ASSOCIATION OF REALTORS®
Profile of Home Buyers and Sellers
describes the characteristics and
motivations of recent home buyers
and sellers and in so doing will help
real estate professionals track the
changing demands of consumers in
a dynamic real estate market. Results
for the Wisconsin area show:
Characteristics of Home Buyers
• The median age of home buyers
was 37 years old compared to 40
years old in the U.S.
I
n the February and March issues of
Wisconsin Real Estate Magazine, we
covered two segments of a report by the
National Association of REALTORS® (NAR)
dealing with the demographics and patterns
of home buyers and sellers in Wisconsin,
including the use of REALTORS®, what
clients look for in a REALTOR®, how they
use the Internet, and other statistics. We
offer one final look at Wisconsin home
buying and selling trends.
Compiled in conjunction with NAR’s “Survey
of Home Buyers and Sellers,” “The Wisconsin
2005 Profile of Home Buyers and Sellers”
report highlights Wisconsin and the Midwest
in perspective with the rest of the U.S. It gives
Wisconsin REALTORS® vital information
about how our state stacks up to the rest of the
country.
18
Throughout 2005, the U.S. housing market
remained one of the strongest segments of
the U.S. economy with record sales volumes
and strong price appreciation in many areas.
Existing home sales set a record in 2005 as
the combined forces of low mortgage interest
rates, strong demand and a strengthening
economy contributed to robust sales of new
and existing homes. The strength of the housing
market was reflected in a homeownership rate
that approached 70 percent, a remarkable
increase from 65 percent 10 years ago.
Highlights – Wisconsin Area
Today’s consumers have access to a vast
amount of information about the home
buying and selling process, including a large
and growing number of Internet-based tools
that provide detailed information about local
property markets whether they are across town
• The median household income
of home buyers was $56,800
compared to $71,600 in the US.
• Fifty-eight percent of home
buyers reported that there were
no children under age 18 years
residing in the home.
• First time home buyers accounted
for 48 percent of homes purchased
in 2005.
• Fifty-six percent of first time
home buyers were between 25
and 34 years old.
• The median income of first time
home buyers was $51,400.
Characteristics of Homes Purchased
• Eighty
percent
of
homes
purchased in Wisconsin were
Home Buyers and Sellers
detached single family homes compared
to 75 percent of homes purchased in the
U.S.
• Eighty-two percent of home buyers
used only one agent in their home
search.
• Twenty-nine percent of home buyers
remained in the suburbs when they
purchased another home.
• Thirty-seven percent of first time
buyers were referred to their agent by
a friend, neighbor or relative.
• The typical homebuyer purchased a
home 9 miles from their previous
residence.
• More than half of recent buyers wanted
their agent to help them find the right
home.
• Sixty-six percent of recent buyers
ranked neighborhood quality as the
most important factor influencing the
location of their home purchase.
• Buyers ranked reputation as the most
important factor when choosing a real
estate professional to assist with a
home purchase.
• Thirty-seven
percent
of homes
purchased were in the suburbs.
• Sixty-four percent of recent buyers will
definitely use their agent again.
• The median price of homes purchased
was $152,000 compared to $195,000 in
the U.S.
Financing the Home Purchase
The Home Search Process
• Home buyers searched for a home for a
median nine weeks and saw a median
eight homes.
• Ninety-one percent of home buyers
used a real estate professional during
their home search.
• Thirty-three percent of home buyers first
learned about the home they purchased
from a real estate professional; down
from 36 percent in 2004.
• Sixty-three percent of first-time home
buyers used the Internet frequently to
search for homes compared with 49
percent of repeat home buyers.
• Ninety-two percent of home buyers
financed their home purchase and 32
percent financed the entire purchase
price.
• Almost all first time home buyers (98
percent) financed the purchase of their
home compared to 78 percent of repeat
buyers.
• Savings was the primary source of firsttime home buyers’ downpayment.
• Sixty-nine percent of repeat buyers
used equity from the previous home as
a downpayment.
• Ninety-five percent of all buyers
believe that their home purchase was a
good financial investment.
Home Sellers and Their Selling Experience
• Eighty percent of sellers used an agent
or broker to sell their home.
• The typical home was on the market
for six weeks.
• Sixty percent of all sellers were very
satisfied with the selling process.
Home Sellers and Real Estate Professional
• Seventy-six percent of sellers contacted
only one agent before selecting one to
help assist in the sale of their home.
• When
selecting
a
real
estate
professional, 36 percent of sellers
received a recommendation from a
friend, neighbor or relative.
• More than half of sellers used the same
agent for their home purchase.
• Thirty-six percent of sellers wanted
their real estate professional to help
them find the right buyer to purchase
their home; twenty-one percent wanted
help pricing their home competitively.
• Ninety-one percent of sellers used the
Internet to market their home.
• Fifty-three percent of sellers reported
they would definitely use the same real
estate agent again.
For Sale by Owner Sellers (FSBO)
• Seventeen percent of sellers sold their
home without the assistance of an
agent.
• Sixty-five percent of FSBO sellers sold a
detached single-family home.
• Twenty-five percent of buyers first
found their home on the Internet.
• The median age of home sellers was 44
years in 2005.
• Thirty-two percent of FSBO’s previous
homes were in a small town.
• The majority of Internet home searchers
were looking for properties for sale.
• The median income of home sellers
was $61,900.
Home Buying and Real Estate Professionals
• Sixty-seven percent of home sellers
were married and 52 percent have no
children under 18 years old living at
home.
• The median selling price of FSBO
homes was $129,900 compared with
$174,900 for agent-assisted home sales.
• Seventy-eight percent of home buyers
purchased their home through a real
estate agent.
• Buyers searched for a median of three
weeks on their own before contacting a
real estate professional.
• Seventy-eight percent of homes sold
were detached single-family homes.
• Twenty percent of sellers spent three to
four years in their previous home.
• The primary reason FSBO sellers did
not use a real estate agent was to avoid
paying a commission.
• Seventy-nine percent of FSBO sellers
relied on yard signs to help them
market their home.
19
State of the State
Focus Groups Held in April
Here’s What We Found Out!
I
n April, Wisconsin REALTORS® Association (WRA) President Bill
Malkasian, Roger Rushman (WRA Chairman-elect), and Steve Murray of
REAL Trends traveled around the state to conduct broker focus groups.
They visited Chippewa Falls, Rhinelander, Wausau, Madison, Milwaukee and
Janesville. The reason for the focus groups is to help the WRA plan for 2007.
Brokers around the state are generally in agreement that Wisconsin’s housing
markets have slowed but there is a steady increase in inventory of homes for
sale, and that sales have slowed only slightly with the expectation that they may
slow more in 2007.
The number and quality of new sales associates continues to rise. The quality and
numbers of younger sales associates (35 and younger) is especially promising.
Referral leads from all sources, including Internet firms, lending organizations
and others continue to increase measurably.
It appears that all buyers and many sellers are now using the Web prior to contact
with a sales associate. They usually come to meetings with a sales associate
equipped with significant information.
While there’s a rise in use of the Internet for both buyers and sellers, there is
a great deal of confusion about how realty firms can market and interact with
search engines, Internet marketing firms and Web hosting sites. Realty firms are
unsure of claims made by firms offering Web marketing services.
The number and variety of new realty service models continues to grow in
virtually all markets, and while there is confusion about how these models work
and how to work with them, traditional brokerage firms have made progress in
their understanding and acceptance of these alternative model realty firms and
have adapted for the most part.
There is a feeling that the industry has suffered a diminution of its status with
consumers as negative news about the realty industry continues unabated. Some
indicate that they have to defend the industry in meetings with consumers.
While there is an overall view that professional standards and broker supervision
should be enhanced, this was not an area that many participants thought would
result in long lasting positive change.
Some ideas to increase the level of education and knowledge among associates
and brokers included increasing the continuing education requirements to yearly
instead of every two years and increasing the pre-license course requirements.
Other points raised by focus group participants:
• Particular to lake and second home markets is the concern that sales associates
are traveling with their buyers, joining the local MLS and transacting business
without the requisite knowledge of these markets.
• Downward pressure on commission rates continues throughout the state
with varying degrees of pressure in different regions.
• There is some indication that foreclosure inventories are increasing.
• There is widespread concern about online lenders being able to fund loans
and consumers’ inability to understand the difference in dependability
between in-person lending organizations and online lenders.
20
Market Summaries
Northwest: Sales are strong, inventories are slowly
rising and there are more foreclosures.
North Central/Lake Country: Sales have been
very strong, with steady inventories and an
increase in second home/retirement purchases.
Central: The market is better than a year ago
generally, with steady sales and inventory levels.
Madison: Inventory levels are rising, sales are
steady to a bit down, and the foreclosure rate is
climbing.
Janesville/South Central: The market is very
good with a significant increase in buyers from
Madison and across the state line from Illinois.
Concerns about the market are largely dependent
on General Motors.
Looking Toward the Future
Wisconsin REALTORS® remain upbeat about the
current and near-term market. Both experienced
and quality new associates believe they have
and will continue to adapt to changing consumer
requirements.
Most believe that buyers and sellers alike will use
the Internet more, but REALTORS® will continue to
find ways to enhance their value to the consumer
and traditional realty providers will retain the
largest share of the market.
Areas of concern to focus group participants included:
• Continued dissatisfaction with the quality and
level of broker supervision of sales associates.
• Lack of knowledge about online marketing
tools, resources and performance.
• Continued growth of referred business with
higher fees.
Focus group participants did not voice concerns
about health insurance, protection from referral
sources, or strong feelings about land use and/or
development restrictions.
A majority of both broker-owners and sales
associates believe that market conditions will
remain positive this year and for the next few years.
Wisconsin REALTORS® are adapting quite well
to increased competition and the market remains
healthy, with some concerns about short sales and
the rising foreclosure rate.
The Taxpayer
Protection Amendment
It’s Time for Plan B
L
egislative Republicans are pushing for passage
of constitutional spending and tax limits on
state and local governments in Wisconsin.
They’ve been struggling to pass these limits since they
were first introduced in 1999.
BY JOE MURRAY
This shouldn’t surprise anyone. Local government
officials, school districts and the UW System are united
in their opposition to the popular “Taxpayer Protection
Amendment” (TPA), and the intensity of their opposition
is unmistakable. Thus, the final disposition of this issue is
very uncertain, at best. But with many of the original plans
being too lengthy, too complex, and too controversial, we
believe it’s time for an alternative. It’s time for Plan B.
Public Supports Limits
The concept of limiting government spending has broad
and bipartisan support with the public. In a recent
Wisconsin Homeowners Alliance poll conducted by
Wood Communications Group of Madison, 64 percent
of those surveyed said they would personally vote for
a “constitutional amendment that limited state and local
taxing and spending increases to the rate of inflation,
but allowed some flexibility to accommodate growth
resulting from development.”
Surprisingly, support for a constitutional amendment
to cap government spending comes from self described
political conservatives and liberals alike. The strong
support stems from several factors including the weak
overall economic outlook and, to a certain extent, the lack
of public trust in government’s ability to deliver services
in a cost-effective manner.
While the concept of limiting government taxing and
spending is clearly popular with homeowners, one
important reason several recent versions of the TPA have
not generated support in the Legislature is that people
are very uneasy about inserting extremely detailed and
specific language regulating government spending in
the state constitution. They simply do not believe a ninepage, 2,500-word fiscal document that could produce
unforeseen consequences should be inserted into the
constitution – which is what the original legislative drafts
proposed. Moreover, there’s no guarantee the public
would adopt an amendment that takes 10 minutes to
read.
It’s Time for a Simpler Alternative
Alternative ideas floating around the Capitol in recent
weeks propose adopting very general, but direct,
language in the state constitution and then pass more
specific implementing language in the statutes. This is
the way many other states have implemented tax and/or
spending limits.
Under this approach, the constitutional limits would
apply only to spending at the state level and mandate
that state spending or revenues go up no faster than the
taxpayer’s ability to pay, as measured by personal income
growth. Once the overall limits are set and tied to ability
to pay, the Legislature would then enact statutory laws
to prescribe exactly how spending at the state and/or
local level would be limited.
Supporters of this approach say details should be left to
statutes and not placed in the actual constitution. They
argue that this approach will be easier for voters to
understand and easier for
the Legislature to amend
if necessary in response to
unforeseen future changes
in our economy.
Opponents
argue
that
this approach leaves too
much uncertainty in the
limits with no guarantees
that meaningful limits
will ever be enacted.
These Republicans say if
Jim Doyle is re-elected in
November, this approach
will surely fail because
the Democratic governor
will never agree with the
Republican
Legislature’s
spending limits.
Taxpayer Protection Amendment ... continued on page 26
21
Some WRA-Backed Bills Signed
Into Law – Others Vetoed
O
ver the last several months, a number
of legislative initiatives important to
REALTORS® and property owners have
made it through the legislative process and have
been acted upon by Governor Doyle. Some of these
legislative initiatives were signed into law; others
were not.
BY TOM LARSON
Many of these bills were drafted based upon recent
court cases, regulatory trends, and/or concerns
raised by REALTOR® members involving issues that
negatively impact the real estate industry or property
ownership. As part of the legislative process, these
bills were discussed at public hearings, received
favorable votes by the legislative committees in
both the Assembly and the Senate, and were then
approved by the full Legislature before being sent to
the governor for his consideration.
Legislation Signed Into Law
Individual notice for land use changes
Assembly Bill 620 (Rep. Sheryl Albers)
• Allows property owners to receive written notice
any time a proposed zoning regulation or land
use plan changes the use of their property. The
property owner must pay any costs associated
with such notice.
•
Signed into law on March 29, 2006
(2006 Act 208). Effective date April 11, 2006.
Time period for using impact fees
Assembly Bill 1077 (Rep. Andy Lamb)
• Requires impact fees to be used for the purpose for
which they were imposed within seven years after
the fee was received or the fee must be returned to
the current property owner. Also, creates a threeyear extension (total of 10 years) if the community
can show just cause.
Status:
Eminent domain – Assembly Bill 659
•
• Prohibits government from condemning singlefamily, owner-occupied homes and selling them to
a third party, unless the homes are in a high crime
area. For other types of property, requires property
to be “blighted” if condemed and transferred to a
third party.
Neighborhood Improvement Districts (NIDs) –
(Rep. M. Williams and Sen. Dave Zien)
•
Status: Signed into law on March 29, 2006 (2006
Act 229). Effective date April 13, 2006.
Nonconforming structures
Senate Bill 253 (Sen. Cathy Stepp)
• Allows property owners to rebuild nonconforming
structures destroyed by certain natural occurrences
(wind, fire, flood, mold, snow, ice, vandalism).
•
22
Status:
Status: Signed into law on February 15, 2006
(2006 Act 112). Effective date March 2, 2006.
Assembly Bill 366 (Rep. Jon Richards)
• Authorizes communities to create NIDs to pursue
redevelopment opportunities in areas that are not
eligible to become a business improvement district
due to the fact that some of the property is tax
exempt or otherwise unsuitable.
•
Status:
Priority Issues Vetoed
Reliance on permits
Assembly Bill 597 (Rep. Sheryl Albers)
• Protects property owners and holds local
governments accountable for mistakes made
Legislative Initiatives ... contined on page 28
The Wisconsin Homeowners
Alliance (WHA) is a 501(C)(4)
THE VOICE OF THE WISCONSIN HOMEOWNERS ALLIANCE
organization dedicated to representing
the interests of Wisconsin homeowners
and protecting Wisconsin’s quality of life
W I S C O N S I N
one home at a time. As part of this effort,
the WHA conducts a series of statewide
public opinion surveys designed to help us
Homeowner Insights for Wisconsin Decision Makers
V O L U M E
1
•
I S S U E
7
•
M AY
understand what homeowners are thinking
2 0 0 6
and talking about. This monthly publication
is intended to share issues of importance
wiscon
homeo
alliance
and concern to homeowners with decision
makers around the state.
HOMEOWNER SATISFACTION TRENDS


HOME OWNERSHIP
Local land-use policies and property rights continue to
concern homeowners. Wisconsin residents say that local
land-use planning is often controlled by people who do
not reflect what they think.
EDUCATION
Wisconsin residents are confident in their public schools.
Parents believe that their children have an excellent or
good chance of getting the education they need to
succeed and be admitted to a college or technical school
of their choice.
THE ECONOMY
The worry about the economy holds steady. While
residents think that things are on the right track in
their local community, they are pessimistic about the
local economy.
TAXES
A majority of residents trust local governments to provide
services in a cost effective manner, but would support a
constitutional amendment limiting taxes that included
flexibility to accommodate growth.


PROPERTY USE
Homeowners should be
required to preserve the
property values and look of
the neighborhood
able to require that the
farmers in the area reduce
the odors, dust and noise
their operations create
free to do whatever they
want with their home or
property, unless they are
creating an environmental
problem
Home Ownership
Property rights and land use continue to concern our citizens. Slightly more than half of all
Wisconsin residents (55%) agree that “there are too many restrictions on what homeowners
can and cannot do with their property” and nearly three-fourths of us (71%) believe that “local
land-use planning is too often controlled by a handful of people who don’t really reflect what
the rest of us think.”
Responses related to both issues appear to be affected by age. For example, more than twothirds (69%) of 18- to 24-year-olds agree that homeowners face too many restrictions.
And, while only 31 percent of people between ages 35 and 54 agree strongly with that
statement, 54 percent of 18- to 24-year-olds agree strongly.
By way of contrast, half of all respondents over 35 agree strongly that local landuse planning is controlled by people who don’t reflect what they think, while just
over a third (37%) of those under 35 agree strongly. This alienation from and
cynicism about the land-use planning process is apt to be reflected in older
homeowners’ opposition to future land-use proposals.
Education
In a recent public agenda survey, parents of America’s high school
students expressed satisfaction and confidence in their children’s
schools’ performance. Wisconsin residents voiced a similarly high
level of confidence in the state’s public schools.
Seven out of 10 people with one or two children under 18 years old
say that the chances are excellent (23%) or good (48%) that their
children will get the education they need to succeed. Two-thirds
of these parents think their children’s chances of being admitted
to and doing well at the colleges or technical schools of their
choice are excellent or good.
Moreover, respondents without children give their local public
schools similarly high votes of confidence. More than threefourths think that the chances that students will get the
education they need are excellent (28%) or good (48%). They
are also confident that students will be admitted to and do
well at the school of their choice once they graduate from
their local public school system—27 percent excellent and
48 percent good.
Majorities of all age groups give their local schools
excellent or good ratings for managing important issues,
from 68 percent of people 65 and older to 53 percent for
people 55 to 64.
WWW.HOMEOWNERSALLIANCE.ORG
wisconsin
homeowners
alliance
wisconsin
homeowners
alliance
The Economy
FUTURE
When you think about Wisconsin’s future, what do you
think is the most important issue Wisconsin is facing at the
moment?
Lower Taxes/Taxpayer Bill of Rights
Funding Education
Loss of Jobs
Healthcare/Insurance
Government Spending
Worries about the economy continue to plague state residents. Although twothirds of respondents think that things are on the right track in their communities,
less than half think their local economies are excellent (7%) or good (40%). And,
once again, age affects responses. For example, more than half (55%) of those
less likely to be in the job market (i.e. 65 and older) give their local economies a
positive rating, while nearly two-thirds (63%) of those most likely to be entering
the job market (i.e., 18 to 24) say local economies are only fair or poor.
Nevertheless, this younger group is the most optimistic about the chances
of students finding jobs in their communities upon graduation. Three out of
five say the chances are excellent or good, almost double the percentage of
people in all other age groups who were optimistic about job prospects for
young people in the local community.
Looking ahead, 18- to 24-year-olds are, once again, the most pessimistic
about local economic conditions. Fewer than one in 10 of the youngest
respondents (8%) think that the local economy will get better over
the next year, while one in four between the ages of 25 and 54 sees
improved economic conditions for the near future.
Taxes
INSTITUTIONS
Although state residents express a high level of trust in
their local officials, when it comes to the job they are doing
in addressing important issues, some respondent groups
are notably critical. Fewer than half of respondents ages
25 to 54 give county boards an excellent or good rating
for addressing issues important to respondents. Local city,
town and village officials fare somewhat better. Almost
two-thirds (62%) of people 65 and older give local officials
excellent or good ratings, while just under half of 35- to
44-year-olds (47%) give them positive ratings.
On the other hand, all age groups give the Wisconsin
Legislature lower than a 50 percent positive rating, and
excellent ratings are all in the single digits. The Wisconsin
Legislature earns its highest job rating from respondents
65 and older (42% excellent or good) and its lowest job
rating among 55- to 64-year-olds (24% excellent or good),
while 75 percent of people between ages 35 and 44 rate
the Legislature as fair or poor in dealing with important
issues.
Overwhelming majorities of all age groups—in some cases over
90 percent—say they trust local governments to provide services
in a cost effective manner. But they differ about some important
details. When it comes to local spending, people 18 to 24 and
45 to 54 are most likely to think that local governments are
doing a good job of making ends meet in difficult times (62%
and 43% respectively). At the same time, people 25 to 34
and 55 to 64 are most likely to think that local governments
could hold costs down if they managed better.
And, when it comes to holding the line on taxes, 35- to
44-year-olds are most likely to support a constitutional
amendment to limit state and local taxes and spending
(70%). Support is weakest among 25- to 34-year-olds
(51%) and people 65 and older (53%).
If a constitutional amendment limiting taxes included
flexibility to accommodate growth, three out of four 18
to 24 and 35- to 44-year-olds would support it. Support
for this modified amendment remains at 53 percent
among people 65 and older.
The Spring 2006 Wisconsin Homeowners Alliance Survey interviewed 600 randomly selected Wisconsin residents
statewide between February 12 and February 16, 2006. The results are an accurate reflection of the opinions of
Wisconsin residents within a margin of error of plus or minus 4 percentage points.
W W W . H O M E O W N E R S A L L I A N C E . O R G
The W isconsin Homeowners Alliance is a 501(c)(4) organization dedicated to representing the
interests of W isconsin homeowners and protecting W isconsin’s quality of life one home at a time.
wisconsin
homeowne
alliance
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Taxpayer Protection Amendment ...
continued from page 21
REFERRALS
Political Considerations
If this approach is adopted by both the
Senate and Assembly, the Legislature may
finally be able to break the impasse over
TPA and present voters with a viable and
understandable plan to bring government
spending in Wisconsin more in line with
the taxpayers’ ability to pay. What are the
political considerations to this approach?
Door County Referrals
Egg Harbor - Sister Bay
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John Sargent
800-377-0177
920-421-0009
• With Democrats united against any longterm spending controls, Republicans
must pass a plan without their help.
The alternative approach could generate
more support from nervous Republicans
who are reluctant to vote for the more
detailed and restrictive constitutional
plan.
• If Republicans enter the 2006 elections
with a long-term plan to control taxes
and spending at the state and/or local
level, the GOP will have an alternative
to the Democrats’ “Hope” plan, which
would allow homeowners to exempt
the first $60,000 of their home value
from school property taxes. In 2004,
Democrats offered no property tax plan
to counter the GOP “freeze” proposal,
thereby losing two seats.
• Governor Doyle is opposed to the TPA
and Congressman Mark Green, his GOP
opponent, supports it. The alternative
approach sets up a clear difference
for voters in the November 2006
gubernatorial election. If voters re-elect
Doyle, they can be assured there will be
no support from him for the follow up
statutory limits on spending. If they elect
Green, they will see controls of taxes and
spending in Wisconsin.
The WRA has long supported the concept of
rational and reasonable constitutional limits
on government spending and/or revenues.
However, we oppose versions that limit
revenues local governments can realize from
new growth and real estate development. If
this kind of an approach passes, it will act as
a disincentive for growth. We believe growth
should be encouraged, not discouraged. We
believe it’s time for Plan B.
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REFERRALS
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Jim Tait Sr.
Minocqua
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www.jimtaitrealestate .com
Legislative Initiatives ... contined from page 22
by local governments in granting building or zoning
permits.
•
Status: Vetoed by Governor Doyle on March 30,
2006.
Shoreland zoning after annexation
Assembly Bill 299 (Rep. Scott Gunderson)
• Allows cities and villages to apply their own zoning
standards (rather than county standards) to newly
annexed land in shoreland areas.
•
Status: Vetoed by Governor Doyle on April 19, 2006.
If you have any questions on these or other legislative
initiatives, please contact Tom Larson ([email protected])
at (608) 241-2047.
��
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KEY TO - Wisconsin REALTORS® Association

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