WI Real Estate cheat sheet

Wis. Stat. ch. 452 governs broker and salesperson licensure and practice; the Real Estate Examining Board (REEB) within DSPS adopts implementing rules in Wis. Admin. Code chs. REEB 11-26.

A license is required to list, sell, buy, exchange, lease, or negotiate real estate for another person for compensation or the promise of compensation.

Two license levels: salesperson (must be affiliated with and supervised by a licensed broker) and broker (may own and operate a brokerage firm).

Licenses expire December 14 of each odd-numbered year; renewal requires 18 hours of approved continuing education per two-year license period.

Client funds (earnest money, security deposits, rents) must be held in a brokerage trust account; personal and business funds may not be commingled, and transaction records must be retained.

A licensee must disclose material adverse facts about the property that are known to the licensee, unknown to the parties, and not discoverable by reasonable diligence, while still protecting the principal's confidential information.

Compensation for brokerage activity may not be paid to an unlicensed person; paying referral fees to unlicensed persons is prohibited.

Advertising must identify the brokerage firm, and a licensee may not advertise another person's property without written authority from the owner or the listing firm.

A licensee must disclose in writing which party the firm represents before the party signs a listing contract or an offer to purchase.

Wis. Stat. ch. 706 (conveyancing): a conveyance must be in writing, signed by the grantor, identify the parties and the land, state the interest conveyed, and be delivered.

Wisconsin is a race-notice recording state: an unrecorded conveyance is void as against a later good-faith purchaser for value who records first.

Wis. Stat. ch. 709 requires a residential seller to deliver a Real Estate Condition Report; if delivered after acceptance the buyer may rescind in writing within 2 business days of receipt.

Chapter 703 governs condominiums (declaration, common elements, percentage interests), ch. 707 time shares, ch. 708 land contracts, ch. 704 landlord-tenant law, and ch. 236 subdivision plats and certified survey maps.

Wis. Stat. 106.50 (Open Housing Law) prohibits housing discrimination based on race, color, sex, sexual orientation, disability, religion, national origin, ancestry, marital status, family status, age, lawful source of income, and conviction record.

Wis. Admin. Code ATCP 134 regulates residential rental practices, including return of a security deposit with an itemized written statement within 21 days after the tenancy ends.

Real estate transfer fee: $3.00 per $1,000 of value, generally paid by the grantor; a transfer return is filed with the county register of deeds before the deed is recorded.

Wis. Stat. 815.20 exempts up to $75,000 of equity in a homestead from execution by creditors.

Federal lead-based paint disclosure and the EPA pamphlet are required for sales and leases of housing built before 1978.

Fiduciary duties owed to the principal are summarized as COLDAC: Care, Obedience, Loyalty, Disclosure, Accounting, and Confidentiality.

In Wisconsin the brokerage firm, not the individual licensee, is the agent; licensees act on behalf of the firm and its client.

Agency status must be created in writing: a listing contract for the seller, a buyer agency agreement (WB-36) for the buyer.

Multiple representation (one firm representing both parties in the same transaction) requires the written consent of all parties; the firm must treat the parties fairly and may not advocate one side over the other.

A broker acting as a multiple representative must not disclose one party's confidential information (price motivation, negotiation strategy, financial position) to the other party.

Confidentiality survives termination of the agency relationship; the duty ends only if the information becomes public or the principal releases it.

Honesty and fair dealing are owed to all parties in the transaction, including unrepresented parties, but advocacy and full loyalty are owed only to the principal.

A licensee may not receive compensation from more than one party to a transaction without the knowledge and written consent of all parties.

Procuring cause determines which cooperating broker earned the commission; the amount and split are set by contract, not by law or REEB rule.

Valid contract elements: competent parties, mutual assent (offer and acceptance), consideration, lawful purpose, and - for land - a writing that satisfies the statute of frauds.

Acceptance must be unequivocal and communicated to the offeror; a change in any term creates a counteroffer, which rejects and terminates the original offer.

Under the mailbox rule, an acceptance is effective when dispatched, unless the offer specifies that acceptance is effective only on receipt.

Wisconsin's statute of limitations for a written contract is 6 years (Wis. Stat. 893.43).

A 'time is of the essence' clause makes stated deadlines enforceable; without one, performance is due within a reasonable time.

Earnest money is held in trust by the listing firm or a designated escrow agent; if the buyer defaults, the seller may retain it as agreed liquidated damages.

Contingencies (financing, appraisal, inspection, sale of the buyer's home) must be satisfied or formally waived by their stated deadlines or the contract may be terminated.

A land contract (contract for deed, ch. 708) is seller financing: the buyer takes possession and pays installments while the seller retains title until the final payment.

Any change to a signed contract must be written and signed by both parties; Wisconsin's standard amendment form is the WB-40.

Wisconsin standard forms: WB-11 Residential Offer to Purchase, WB-13 Vacant Land Offer, WB-14 Residential Condominium Offer, WB-15 Commercial Offer, WB-44 Counter-Offer, WB-40 Amendment, WB-45 Cancellation Agreement and Mutual Release, WB-46 Multiple Counter-Proposal.

The offer states price, earnest money, financing terms, contingencies, title evidence, closing date, and a binding acceptance deadline (date, time, and delivery method).

Federal TRID rules: the lender delivers the Closing Disclosure at least 3 business days before consummation and the Loan Estimate within 3 business days of a completed application.

The deed must be delivered at closing and recorded with the register of deeds in the county where the property is located; recording gives constructive notice to the world.

Prorations divide taxes, rents, and utilities between buyer and seller as of the closing date, typically computed on actual days owned out of the year.

The lender requires a loan (mortgagee) title policy; an owner's title policy is optional but customary, and the title commitment lists schedule A requirements and schedule B exceptions.

The seller signs a 1099-S for reportable sale proceeds; FIRPTA requires 15% withholding when the seller is a foreign person.

Wisconsin listings and offers require delivery of the Real Estate Condition Report and, for pre-1978 housing, the federal lead-based paint disclosure.

The buyer's pre-closing walk-through verifies the property's condition and that required repairs were completed and items included in the sale remain.

Fee simple absolute is the fullest ownership interest; lesser freehold interests include the life estate, and leaseholds are personal property interests in land.

Tenancy in common allows unequal shares with no right of survivorship; joint tenancy requires equal shares, unity of title, time, interest, and possession plus the right of survivorship.

Wisconsin is a marital property state (ch. 766): property acquired during marriage is generally marital property unless classified as individual property by election or by law.

Easements appurtenant benefit and run with a parcel of land; easements in gross benefit a person or entity and are not tied to ownership of land.

Adverse possession in Wisconsin requires 20 years of open, notorious, continuous, hostile possession with payment of the taxes assessed on the property.

Every deed needs a grantor and grantee, the grantor's signature, words of conveyance, an adequate legal description, delivery, and acceptance by the grantee.

Encumbrances include liens, mortgages, easements, covenants and restrictions, and encroachments; recorded CC&Rs run with the land and bind later owners.

Governmental powers over land: taxation, eminent domain, police power (zoning and land use), and escheat.

Condominium ownership under ch. 703 combines ownership of a unit with an undivided percentage interest in the common elements.

Loan-to-value = loan amount ÷ lesser of purchase price or appraised value; down payment percentage = 1 − LTV.

Monthly principal and interest: M = P × [ i(1+i)^n ] ÷ [ (1+i)^n − 1 ], where i = annual rate ÷ 12 and n = number of monthly payments.

One discount point = 1% of the loan amount, paid at closing to permanently lower the interest rate; 2 points on a $200,000 loan cost $4,000.

Common qualifying ratios are 28% housing / 36% total debt for conventional loans; FHA guidelines run roughly 31% / 43%.

Private mortgage insurance is generally required above 80% LTV; the borrower may request cancellation at 80% of original value, and PMI terminates automatically at 78%.

FHA requires as little as 3.5% down with mortgage insurance premiums; VA offers 0% down with a funding fee; USDA offers 0% down on eligible rural properties.

An adjustable-rate mortgage has a fixed initial period, then adjusts by index plus margin, subject to periodic and lifetime caps.

Wisconsin is a lien-theory state using mortgages, not deeds of trust; the mortgage must be recorded to establish priority, and a satisfaction is recorded when the debt is paid.

Fully amortizing loans retire the balance over the term; balloon loans require a large lump-sum payoff before the amortization period ends.

Three approaches to value: sales comparison (best for owner-occupied residences), cost (new construction and special-purpose property), and income (investment property).

Market value is the most probable price in a competitive, arm's-length transaction where both parties are informed, prudent, and not under undue pressure.

Adjustment rule: if the comparable is superior to the subject, subtract the difference; if the comparable is inferior, add it.

Capitalization rate = net operating income ÷ price; value = NOI ÷ cap rate; NOI = effective gross income − operating expenses and ignores debt service and income taxes.

Effective gross income = potential gross income − vacancy and collection loss + other income.

Gross rent multiplier = sale price ÷ gross monthly rent; a smaller GRM indicates a lower price relative to rental income.

Cost approach: value = replacement or reproduction cost − accrued depreciation + land value; depreciation may be physical, functional, or external.

Highest and best use must be legally permissible, physically possible, financially feasible, and maximally productive.

Key principles: substitution, contribution, conformity, progression and regression, and anticipation; in Wisconsin assessors value property at full market value (Wis. Stat. 70.32(1)).

Listing types: exclusive right to sell (commission is owed no matter who procures the buyer), exclusive agency (seller may sell without commission), and open listing (only the procuring broker is paid).

A listing contract must be in writing, signed by the seller, and contain a definite expiration date; the WB-1 is the standard residential exclusive-right-to-sell listing.

Commission is negotiable and set by agreement; no standard or suggested rate may be published or agreed upon among competitors.

Months of inventory = active listings ÷ average sales per month; roughly 5-6 months indicates a balanced market, fewer months indicates a seller's market.

Absorption rate = number of homes sold in a period ÷ total number of homes available in that period.

Pricing is set from a competitive market analysis of closed sales, pending sales, active competition, and expired listings rather than from the seller's financial needs; overpricing extends days on market and leads to price reductions.

Fair housing advertising rules bar language or images indicating preference or limitation by protected class; ads identify the firm and, where used, the Equal Housing Opportunity logo.

The CMA compares recent closed sales, pending sales, active competition, and expired listings to support the listing price recommendation.

Showing and marketing accuracy matters: correct MLS data, verifiable square footage, and disclosure of known defects reduce liability and misrepresentation claims.