WI Real Estate flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Wisconsin Real Estate Examining Board

The Wisconsin board within the Department of Safety and Professional Services that issues broker and salesperson licenses and adopts administrative rules for real estate practice under Wis. Stat. ch. 452.

Salesperson license

A Wisconsin license that allows a person to perform brokerage services only while affiliated with and supervised by a licensed broker; a salesperson may not operate an independent brokerage firm.

Broker trust account

A separate account a brokerage firm maintains to hold client money such as earnest money or security deposits; personal and business funds may not be commingled in it, and records must be kept.

Material adverse fact

A condition the licensee knows that significantly and adversely affects property value, is unknown to the parties, and cannot be discovered by reasonable diligence; Wisconsin licensees must disclose it to the parties.

Wis. Stat. chapter 706

Wisconsin's conveyancing statute: a conveyance must be written, signed, identify the parties and land, and be delivered; an unrecorded deed is void against a later good-faith purchaser who records first.

Real Estate Condition Report

The Wisconsin residential seller disclosure required by Wis. Stat. ch. 709; if it is delivered after acceptance, the buyer may rescind in writing within two business days of receipt.

Wisconsin real estate transfer fee

A fee of $3.00 per $1,000 of value on taxable Wisconsin real estate transfers, generally paid by the grantor, with a transfer return filed with the county register of deeds before recording.

Wisconsin open housing protected classes

Wis. Stat. 106.50 bars 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.

Fiduciary duties of an agent

A broker owes the principal care, obedience, loyalty, disclosure, accounting, and confidentiality; honesty and fair dealing are owed to all parties, but advocacy is owed only to the principal.

Multiple representation

A Wisconsin brokerage firm representing both buyer and seller in the same transaction must obtain the written consent of all parties and treat them fairly without advocating for either side.

Buyer agency agreement

A written contract, written on the WB-36 form in Wisconsin, that creates an agency relationship with a buyer and defines the term, territory, and compensation owed to the firm.

Confidentiality after termination

A licensee's duty to keep the former principal's confidential information secret continues after the agency relationship ends, unless the information becomes public or the principal releases the duty.

Statute of frauds

The rule requiring real estate contracts and conveyances to be in writing and signed by the party to be charged; an oral agreement to sell land is generally unenforceable.

Counteroffer

A response that changes the terms of an offer; it operates as a rejection that terminates the original offer and creates a new offer the other party may accept or reject.

Earnest money as liquidated damages

Under Wisconsin's standard offer, if the buyer defaults the seller may retain the earnest money as agreed liquidated damages, and both parties are released from further claims under the contract.

Land contract

Also called a contract for deed: seller financing under Wis. Stat. ch. 708 in which the buyer takes possession and pays installments while the seller keeps title until the final payment.

Closing Disclosure three-day rule

Under federal TRID rules the lender must deliver the Closing Disclosure at least three business days before consummation, and a Loan Estimate within three business days of a completed application.

WB-11

Wisconsin's standard Residential Offer to Purchase form, stating price, earnest money, financing and inspection contingencies, title evidence, closing date, and a binding acceptance deadline.

Proration

The division of items such as property taxes, rents, and utilities between buyer and seller as of the closing date, usually calculated by the number of days each party owned the property.

WB-44 counter-offer

Wisconsin's standard form used to respond to an offer with changed terms; using it rejects the original offer and creates a new offer for the other party to accept or reject.

Joint tenancy

Co-ownership with equal undivided shares and the right of survivorship, so a deceased joint tenant's interest passes automatically to the surviving joint tenants instead of through probate.

Easement appurtenant

An easement that benefits a particular parcel of land and passes automatically with ownership of that parcel, unlike an easement in gross, which benefits a person or entity.

Adverse possession

In Wisconsin a person may acquire title by open, notorious, continuous, and hostile possession for 20 years while paying the taxes assessed on the property during that period.

Marital property

Under Wis. Stat. ch. 766, property acquired during marriage by either spouse is generally marital property, and a spouse may elect in writing to classify assets as individual property.

Loan-to-value ratio

The loan amount divided by the lesser of the purchase price or appraised value; a $240,000 loan on a $300,000 property produces an 80 percent LTV and a 20 percent down payment.

Discount point

A fee equal to one percent of the loan amount paid at closing to reduce the interest rate permanently; two points on a $200,000 loan cost $4,000.

PMI cancellation

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

Capitalization rate

Net operating income divided by property value or price; with $30,000 of NOI and a 6 percent cap rate, the indicated value is $500,000.

Highest and best use

The legally permissible, physically possible, financially feasible use that produces the greatest value; an appraiser tests it before selecting a valuation approach.

Comparable adjustment rule

In the sales comparison approach, if a comparable sale is superior to the subject, subtract the value of that advantage; if the comparable is inferior, add the amount it lacks.

Months of inventory

Active listings divided by the average number of sales per month; about five to six months indicates a balanced market, and fewer months indicates a seller's market.

Exclusive right to sell

A listing in which the seller pays the broker a commission no matter who procures the buyer, including the seller; Wisconsin's standard residential form is the WB-1.