november 2011 - wisconsin real estate magazine

in Everyday PracticeProfessional StandardsEthical Agent

“Call an attorney”Don’t forget to use this simple phrase.

InSIDe tHe WraA message from the WRA’s new President and CEO.

$5.00November 2011 MAGAZINE

The

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november 2011 | vol. 28, no. 2

16

table of contents

The Ethical Agent: Professional Standards in Everyday PracticeEthics tips all REALTORS® should follow with respect to new technologies and new business practices and how those issues relate to the REALTOR® Code of Ethics.

Best of the Legal Hotline: Hotline A, B, CsWith a focus on ethics, this hotline addresses questions and answers on advertising, access, buyer agent fees and cooperation.

Repeat After Me: “Call An Attorney”While these three words form just a simple phrase, that phrase should be used regularly – even daily.

There’s No Right Way To Do the Wrong Thing!This month’s sales tip highlights several articles in the REALTOR® Code of Ethics to keep in mind while practicing real estate – ethically.

features articles

16

2 InsidetheWRA The first message to REALTORS® from newly appointed

WRA President and CEO, Mike Theo.

10 NewFlexibleFarmOfferFitsAll A look at the new provisions and features of the WB-12

Farm Offer to Purchase as the contract nears finalization.

26 ThePoliticalYearAhead With the upcoming 2012 election year, an overview of

what to expect nationally and in Wisconsin and the recall of Gov. Walker.

28 WRAtoPursueLegislationthatProtectstheRighttoRentHomesThe WRA lobbying team is working at the Capitol to seek legislation protecting the rights of homeowners to rent out homes.

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wisconsin real estate magazine | november 2011 1

24

United Way Honors tHe stark Family For service to commUnityUnited Way of Dane County

United Way of Dane County recognized the Stark Family with the 2008 Tocqueville Society Award for outstanding service to the Dane County community and United Way. The Tocqueville Society Award c e l e b r a t e s and acknowledges people or families, such as the Starks, who have made a major impact on the quality of life in Dane County through their exceptional service and commitment to the community.

city HoUsing aUtHority receives 100-Unit grantMilwaukee Journal Sentinel (09/25/08) Pabst, Georgia

The city of Milwaukee’s housing authority is due to receive $6.7 million in federal Hope VI money to build 100 new housing units. The 100 units will be constructed in a 2.5-mile area and will include 29 public housing and affordable rental units; nine affordable housing units for income-eligible families; and 62 moderately priced, open-market condominiums. HUD Secretary Steven C. Preston comments, “Milwaukee’s housing authority has demonstrated it has the leadership to lead and revitalize neighborhoods and transform lives. Cities like Milwaukee change and grow and need to revitalize housing to make sure many aren’t priced out.” Milwaukee is one of a half-dozen housing authorities nationwide to receive new Hope VI grants.

HoUsing stUdy delay FrUstrates advocatesMilwaukee Journal Sentinel (10/07/08) Williams, Scott

Two years after promising the Milwaukee metro area’s first major housing study in three decades, the Southeastern Wisconsin Regional Planning Commission (SEWRPC) is still struggling to get the effort launched. Proponents hope the study will serve as a catalyst for improving affordable housing opportunities throughout the city’s suburbs. But commissioners have yet to assemble an advisory committee to oversee the research or set a specific timetable for conducting the survey. Phil Evenson, the commission’s executive director, said other issues keep getting in the way. The delays have frustrated housing advocates the most. Bethany Sanchez, vice president of the Metropolitan Milwaukee Fair Housing Council, laments, “It’s been a long time coming.” The Pewaukee-based commission has not conducted a comprehensive review of housing patterns since the 1970s.

Wisconsin receives millions to ease ForeclosUre crisis Milwaukee Business Journal (WI) (09/30/08)

The state of Wisconsin is due to receive nearly $39 million in federal funds to stabilize neighborhoods and stave off a spate of abandoned homes. According to HUD and Gov. Jim Doyle, the funds are separate from approximately $9.2 million the government is awarding the city of Milwaukee, where the foreclosure rate is currently 9.9 percent. HUD is awarding the funds via its Neighborhood Stabilization Program, under which almost $4 billion is being allocated to local and state governments for the redevelopment of abandoned and foreclosed houses.

sites: not JUst For Personal connections anymoreMinneapolis-St. Paul Business Journal (09/29/08) Grayson, Katharine

St. Paul, Minn.-based REALTOR® Teresa Boardman says Flickr, Facebook and other social networking sites make it easy to meet people who might eventually become clients. While many professionals are using these sites to make business contacts and companies use them to conduct background checks or recruit new workers, many simply want to connect with people who have similar interests. According to Boardman, “The hard sell is dead. It doesn’t work door-to-door, and it doesn’t work on social networks.” On Flickr, Boardman connected with a fellow photographer who eventually used her services to purchase a home.

ForeclosUres PUsH rents HigHer, sqUeezing loW income FamiliesMinnesota Public Radio (MN) (09/21/08) Olson, Dan

In Minnesota’s Twin Cities, a wave of home foreclosures has pushed more people into the rental apartment sector. The result is an intensifying demand on Minneapolis and St. Paul’s rental housing stock, so much so that the vacancy rate is very low and rents are on the rise. This, in turn, means low-income working families face higher monthly rents even though their income hovers at unchanging levels. Since 2005, the Twin Cities apartment vacancy rate has dipped from 7 percent to closer to 4 percent. Average monthly rents over that same time span are up more than $25, rising to more than $850. The St. Paul-based Wilder Foundation recently reviewed income data for several Twin Cities counties. The organization’s research found that the number of people in those markets paying too much for their rental housing will double from around 70,000 currently to a whopping 140,000 by 2010. Some say a partial solution would be for the U.S. government to reverse course on housing policy and

substantially increase funding for rental assistance,

particularly help for working families.

nar releases Free FHa toolkit Wisconsin REALTORS® Association (10/30/08)

NAR and the WRA are eager to help you meet the

current challenges of the troubled economy. We

know that you need resources that can help you

close transactions, and you need them at little or no

cost. NAR has just released an all-new FHA Toolkit

online for FREE to help you get clients the financing

they need in a credit-strapped environment. It is

one of the most comprehensive toolkits NAR has

ever produced, and it’s available to all REALTORS®

right now by visiting the link below. They also have

launched a new page called “NAR Helps You Navigate

the Current Economy” where you can find dozens of

great products and resources, like the FHA Toolkit,

for free or at a steep discount. Visit www.Realtor.

org/NARHelpsYou for links to these great programs

and products.

Home loans going strong, albeit a bit tigHter, in area Wisconsin State Journal (10/17/08) Balousek, Marv

Despite the ongoing national credit crisis, property

professionals say mortgage money remains available

throughout southern Wisconsin to home buyers

with solid credit. Ron Steinhofer, manager of

Marshall & Ilsley Bank’s regional home lending

group, states, “There’s plenty of money for home

loans out there. It is slightly more difficult to qualify

than two or three years ago, but if you have a good

credit score, a good job and a down payment, money

is available.” Steinhofer adds that banks still are

making loans via such programs as Fannie Mae

and Freddie Mac. Furthermore, credit standards

remain about the same as they were six months ago,

meaning that qualified home buyers can get loans

if they have the proper income verification. On the

downside, banks have been less willing to make

loans with higher loan-to-value ratios. In addition,

conventional financing without a down payment has

indeed disappeared. However, 100 percent financing

is still available with Veterans Administration and

Rural Development home loans.

News

Top News Stories in and Around the Industry

Bill MalkasianWRA President

or27years, I’vecometoworkat theWRAwithasmuchenthusiasmandexcitementasIdidonmyveryfirstday. It’snothardwhenyouwork for themostoptimistic,hard-workingentrepreneursinAmerican

business.It’salsonothardwhenyouworkwithastaffthathasearnedanationalreputationasbeingoneofthefinestandmosttalentedinthecountry.

So, as I move offices and responsibilities, from Senior VicePresidentofLegalandPublicAffairstoPresidentandCEO,Idoso with a profound sense of eagerness and anticipation aboutthebright futureofourassociation,ourmembers,our industryandthehomeowners,propertyowners,customersandclientsweserveandrepresent.

For 27 years, I’ve alsohad the extremepleasure toworkwithBill Malkasian, who is leaving theWRA to assume new dutiesasVicePresidentforStrategicPoliticalPlanningfortheNationalAssociationofREALTORS®.Billinspiredmetopursueacareerinassociationmanagement,gavemeeveryopportunitytolearnandgrowinthatprofession,andhasalwaysdonesofromaroleoffriendandmentor–inthatorder.WewillmissBilleveryday,bothasastaffandanassociation,buthewillremainaconsultanttotheWRAforawhile,andafriendandmentortomeforalifetime.

Thechallengeswefaceasan industryarebothenormousandhistoric. A difficult economy has given rise to issues that aretransforming the very foundations of our business, impactingprices, inventory, values, lending practices and professionalcollaboration.Wewillbeadifferentindustryandassociationafterthis Great Recession than we were before it.This poses greatthreatsaswellasgreatopportunities.

For the immediate future, theWRA is in soundfiscal conditionand enjoys an equally sound volunteer leadership team led byChairman of the Board Rob Keefe of Lake Geneva. Rob hasset the bar high for the upcoming year by establishing thefollowingpriorities:raisingtheprofessionalismandexpertiseofour members, capitalizing on our legislative opportunities, andmaximizingourpoliticaleffectiveness.

These priorities will be embraced by the WRABoard and staff, and in full partnershipwith ourlocal associations and their talented AssociationExecutives. I invite you to join us in this effort. Ichallenge each of you to becomeamore active andinvolved member in your state and local associations.You are the survivors of these past few, difficult years.Now,becomethemarketmakersofthefuturebyactivelyparticipating in the activities and opportunities of yourassociation. I believe that in the process, you will grow asmuchpersonallyasyouwillprofessionally.

In the future, I hope to use thesepages to talk about timelyissues,industrytrendsandassociationdevelopmentsthatwillimpactyourbusiness.Iinviteyoutojoinmeinthisendeavorbye-mailingmeyourthoughts–bothsupportiveandchallenging.

I look forward tomynew role andduties at theWRAand thechallengeswefacetogether.Feelfreetoletmeknowwhat’sonyourmindanytime.

BestWishes,

MikeTheo

with mike theo

F

inside the wra

2 wisconsin real estate magazine | november 2011 www.wra.org/wrem

A New Era


rob keefe, [email protected]

renny diedrich, [email protected]

steve lane, [email protected]

michael theo, cae, [email protected]

editorial staff:

michael theoPublisher

robert UhrinaManaging Editor

lauren bizorikEditor

Joe leschisinSenior Designer

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) 799-4468general 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] Website: www.wra.org

Wisconsin Real Estate Magazine™ is published by the Wisconsin realtors® association. Trademark issued pursuant to Wisconsin state statute; federal

trademark is pending.Real estate

notes from the wra

facebook: www.facebook.com/wisconsinrealtorstwitter: www.twitter.com/wirealtorslinked-in: www.wra.org/linkedinyoutube: www.wra.org/youtube

Wra nominating committee seeks candidatesAreyouinterestedinservinginaleadershiproleforyourWRA?TheWRANominatingCommitteeisseekingcandidatesfor2012-2013Chairman-ElectandTreasurerpositions.TheapplicationisavailablefromtheWRAwebsiteorbycontactingSandyBolgrihnatsandyb@wra.org.ThedeadlineforsubmittinganapplicationisDecember30,2011.

Inaddition,theNominatingCommitteeisseekingapplicationsforthepositionsof2012-2013ExecutiveCommitteeVicePresident,NARDirectorandWRABoardofDirectorRegionalRepresentative.PleasenotethatthenumberofopeningsforRegionalRepresentativeisdeterminedbythemembershipasofFebruary28,2012.TheapplicationdeadlineisMarch15,2012.

2011 Wra award Winners

Wra member benefits“HowcanGooglefindme?”

That’sthequestionthatwww.RealEstateHomePages.comMarketingDirectorJeffCorbosayshisREALTORS®whosewebsiteshehostsaskhimthemost.HowtoappearonthefirstpageofGoogleisaquestionmanyREALTORS®ask,andbelowareafewtips:Site content:Shouldrelatetothekeywordsforwhichyouwanttoappearinresults.Site title:Limittotwoorthreekeywordphrasesrelatingtothekeywordsyouwanttobefoundfor.Domain name: Getonewithyourkeywords.www.MadisonHomesForSale.comwouldbeagreatone,forexample.Inbound links:Getothersiteslinkingtoyoursite!Thisisanimportantsteptowardachievinghigherrankings.

RealEstateHomePagesofferswebsitesfullyoptimizableforthemajorsearchengines.Siteinformation,contentandtitlesarecustomizedtohelpyouachieveyourgoals.TakeadvantageofthewebsitehostingspecialthroughDecember31:halfprice($19.95)foryourfirst12months.Learnmoreatwww.RealEstateHomePages.comorcall(800)280-6926.

Editorial correction: In theOctober2011 (Vol.28,No.1) issueofWisconsinRealEstateMagazine, thearticle“InsidetheWRA”notesthatBillMalkasianretiredfromtheWRAonOctober17,2012.MalkasianretiredonOctober17,2011.

John HorningDistinguishedServiceAward

Tom Sykora, GRI DistinguishedServiceAward

Joan Englert DistinguishedServiceAward

Jonathan M. Sayas InstructoroftheYear

Kathy Allison-ZimmermannABR, CHMS, CRB, CRS

CRSChapterMemberoftheYear

Peter ShuttleworthChairman’sCitationAward


Just when it seemed like we were going to get a break from state politics, along

comes another election year. With an open U.S. Senate seat, the majority of the Wisconsin legislature up for re-election, and the near certainty of more recalls, 2012 will be a very political year in our state. With this on the horizon, I wanted to share my view of the WRA’s role in the political process.

Organizations like ours exist to do things collectively which we could never do individually or as companies. One of those collective efforts is petitioning our elected officials on behalf of our industry. We have a vested interest in ensuring that laws and rules are enacted to the benefit of our members, clients and homeowners, and that bad or poorly thought-out legislation negatively affecting us is defeated. We accomplish this goal through several means:

Legislative assistance: As the subject matter experts in all things real estate, we carefully review all proposed legislation and evaluate it for its impact on our industry. Our legal and legislative staff is almost always sought out for its input and advice on real estate-related legislation in the drafting phase. We have been able to improve bills in their infancy, advise legislators on unintended consequences, and cross-reference complicated issues against existing rules and regulations. Widely regarded as an

“honest broker,” we are able to work with all political parties to ensure that bills do not inadvertently harm the real estate industry in Wisconsin.

Education: With this deep base of knowledge of existing and pending legislation, our staff can see problems coming early on. When problem bills are proposed, we make sure that all stakeholders are informed and provide an easy vehicle for our members to communicate directly to their legislators regarding the problems those bills may cause.

Advocacy: It almost goes without saying that a housing-friendly legislature passes housing-friendly legislation. This sort of legislature doesn’t happen by accident. Our staff and member leaders interview candidates on our issues, evaluate voting records of incumbents, and provide information to our Political Action Committee. Candidate endorsements are based solely on our industry-specific issues and have been remarkably bipartisan. A WRA candidate endorsement is intended as a signal to our members and those concerned about real estate issues that this candidate is one we feel will advance those interests. Obviously many other factors go into making a decision in the voting booth, but I strongly believe that voters should be aware of a candidate’s stand on real estate and private property issues and take that into account. Indeed, our ability to reciprocate support to those

candidates who have supported real estate issues with votes at election time is one of the most powerful tools we have in getting our message out to sitting legislators.

Political issues are controversial by their very nature and I do not expect every REALTOR® to be happy with every endorsement the WRA makes this year. I do feel that, in our world of ever-increasing government involvement in our business, participation in the political process is a critical component of our mission to our members and Wisconsin property owners. To see what happens when a state association is ineffective in this area, look at other states that have no such listing protection or no standardized forms and that have attorney-driven negotiations and closings or enormously increased broker liability. Wisconsin real estate practice would not have become as consumer- and REALTOR®-friendly as it is without our active and effective involvement.

So when it’s time to vote, learn about the candidates’ stance on real estate issues and realize that the WRA is not an arm of any party or machine but rather is focused on those issues affecting Wisconsin REALTORS® and property owners.

Respectfully,

Robert KeefeChairman’s Corner

Rob Keefe


monthly wisconsin housing reportnews

WISCONSIN HOUSING STATISTICS MONTHLY ACTIVITY - SEPTEMBER 2011 Statewide SEP-2011 SEP-2010 % Change YTD-2011 YTD-2010 % Change

NewListings 7,344 9,330 -21.3% 88,770 107,430 -17.4% ClosedSales 4,794 4,072 17.7% 39,721 41,774 -4.9%MedianSalesPrices $134,900 $137,000 -1.5% $132,552 $141,000 -6.0%

Median Price Existing Home Sales Region SEP-2011 SEP-2010 % Change SEP-2011 SEP-2010 % Change

Southeast $150,000 $152,000 -1.3% 1,636 1,393 17.4%SouthCentral $151,875 $162,500 -6.5% 888 719 23.5%West $135,000 $136,500 -1.1% 539 447 20.6%Northeast $116,900 $125,000 -6.5% 849 687 23.6%Central $100,000 $104,500 -4.3% 312 279 11.8%North $120,000 $119,000 0.8% 560 533 5.1%

>

ByDaviDE.Clark,EConomist,C3statistiCalsolutions

Wisconsin home sales were significantly higher in September even as median

prices dipped slightly from their levels last year. Existing home sales rose 17.7 percent in September compared to September last year, and median prices fell 1.5 percent to $134,900 over the same period, according to data released by the Wisconsin REALTORS® Association (WRA).

“It’s no surprise to anyone familiar with the housing market that home sales were so strong in the last three months compared to 2010,” said Rob Keefe, Chairman of the WRA Board of Directors. The expiration of the federal tax rebate program in June last year pushed much of the 2010 sales activity into the first half of the year, creating a steep drop-off in the second half. In fact, home sales for the July through September period were up 26.2 percent over the third quarter last year primarily as a result of the termination of the federal program. “Still, on a year-to-date basis, we’re only 4.9 percent off the pace set last year, and we expect to further close that gap in the fourth quarter,” said Keefe.

All regions within the state experienced growth, with sales up by more than 20 percent in three regions with two other regions posting increased sales of 11 percent and 18 percent. Specifically, existing home sales grew just over 23 percent in the northeast and south central regions of the state and were up 20.6 percent in the west region. The southeast region saw sales increase 17.4 percent and they were up 11.8 percent in the central region. Only the north region, which outpaced the rest of the state in the first half of the year, had sales up by single-digits, rising 5.1 percent in September relative to September 2010.

Statewide, the median price of existing homes fell slightly by 1.5 percent in September 2011, compared to that same month last year. This represents the smallest monthly decline in the median price this year, as median prices fell on an annualized basis between 4.1 percent and 13.3 percent during the first eight months of the year. “This is welcomed news, although we shouldn’t place too much emphasis on just one month’s data,” said WRA President Mike Theo. “If we see a continuation of this pattern for several months in a row, then

we might be able to conclude that prices are near the bottom,” he said. The REALTORS® report also showed that new listings are down 17.4 percent year-to-date, whereas the inventory of unsold homes remains high in the state. “We won’t see substantial progress in bringing down these inventories until consumer confidence improves,” said Theo. Although the state has added over 12,000 relatively high-paying manufacturing jobs since January, the overall pace of job growth nationally and in the state remains low. “We’re going to need to see more sustained job growth across all sectors of the economy to get buyers off the fence,” he said. “When they do enter the market, there will be some excellent opportunities.” The Wisconsin REALTORS® Housing Affordability Index measures the percent of the median-priced home that a family with the median income can buy. The index was at 232 in September which was up slightly from the September 2010 level of 228.

For more information, contact David E. Clark, Economist, C3 Statistical Solutions Office phone: (414) 803-6537

SEptEmbEr HomE SAlES INcrEASE AS mEdIAN prIcES modErAtE

View all housing statistics at www.wra.org/housingstatistics


EthicalThe

When new REALTORS® join the REALTOR® organization, they are

introduced to the REALTOR® Code of Ethics. Many are like I was –

unaware of the rich tradition and heritage our Code has carried

now for almost 100 years.

Professional StandardsByBruCEH.ayDt,aBr,CrB,Grn,sFr,srs


in Everyday Practice

What many REALTORS® don’t know about the Code when they

are first introduced to it is that the Code is much more than a bunch of rules put down on paper. It embodies not only our philosophical values as REALTORS®, it embodies the standards of conduct that we all strive to attain and by which we abide. The history of the Code is at the core of the history of the organized real estate industry. When the Code was adopted in 1913, there were no real estate licensing laws. The Code was the only set of standards of conduct to which real estate practitioners could look to gauge their behavior. The concepts of the original Code continue to be relevant and embodied in today’s Code, whether in the concepts

of fiduciary duty or the concepts of truth in

advertising.

More so, the core concepts of the Code are being applied by the National Association of REALTORS® Professional Standards Committee to the “new” business practices we all use today on the Internet, social media, and in short sales and affiliated businesses. Let’s sample how the Code applies in some of these “new” situations.

Many of the “new” questions about the Code that come up are in the area of advertising, whether in print, on the web or in social media contexts as well as issues related to short sales. Let’s examine some tips to watch for in those key areas.

Disclose your state of licensure on your website.

On your website, you need to include some statement disclosing the state or states in which you hold a real estate license. The note could say something like, “Licensed in Wisconsin,” “Wisconsin Licensee” or “Wisconsin Broker.” Standard of Practice 12-9 requires all licensees

to include this information on their websites. “REALTOR®

firm websites shall disclose the firm’s

name and state(s) of licensure in a

reasonable and readily apparent

m a n n e r . Websites of

R E A LTOR S®

and non-member licensees affiliated with a REALTOR® firm shall disclose the firm’s name and that REALTOR®’s non-member licensee’s state(s) of licensure in a reasonable and readily apparent manner.” The public has a right to know, when looking at a website with real estate information on it, where the person running the website is licensed. Questions arise about whether your mailing address is sufficient. While the Code is silent on this particular point, I always recommend using one of the “licensed in …” phrases and not just a street address. Does your street address always reflect that you may also be licensed in multiple states – like Illinois or Minnesota? While the disclosure of state of licensure only applies to websites, it’s good practice to include it in any advertising you do.

Make sure your company name is readily apparent in any real estate advertising you do.

Standard of Practice 12-5 has the basic concept that the public is entitled to know when looking at your advertising that you are a REALTOR® or real estate licensee and to know the company with which you are licensed. “REALTORS® shall not advertise nor permit any person employed by or affiliated with them to advertise real estate services or

Agent



listed property in any medium – such as electronically, print, radio or television - without disclosing the name of that REALTOR®’s firm in a reasonable and readily apparent manner.” It’s easy to miss that the company name requirement applies in all advertising and marketing that you do, whether on the internet, in print or on giveaways like magnets and pens. Also, don’t forget that this includes teams and other entities working under a brokerage company’s licensure. If you are the “Sam Jones Team,” your advertising also must include your company’s name, like “Sunset Realty,” somewhere in your advertising.

Using social media like Facebook, blogging or tweeting without making your company affiliation evident.

In any real estate–related communications on Facebook, Twitter or other social media sites, you must include your company name in the posting or make it accessible via a link back to your company name, like your username’s link to a profile page. Standard of Practice 12-5 was recently amended to provide for the “link back” idea so a tweet of 140 characters wasn’t required to have your full company name under the Code. “ … Standard of Practice (12-5) acknowledges that disclosing the name of the firm may not be practical in electronic displays of limited information such as thumbnails, text messages or tweets. Such displays are exempt from the disclosure requirement established in the Standard of Practice, but only when linked to a display that includes all required disclosures.”

Registering or using domain names that don’t reflect a “true picture.”

Several Standards of Practice under Article 12 prohibit deceptive uses of domain names, whether registering them or using them. Specifically, REALTORS® should consult Standards of Practice 12-10 and 12-12 for registration and use of domain names. Standard of

Practice 12-12 includes not only the use of a domain name that isn’t a true picture, but the registration alone also violates the Code of Ethics. These deceptive uses and registrations include other persons’ names, competitors’ names, and the term “MLS” when the URL directs the viewer to a REALTOR®’s site and not an MLS website.

Monitor your sites and don’t allow false or misleading comments.

You should monitor your blog(s), Facebook wall and pages, and other electronic media regularly for any false or misleading comments about others and immediately remove any that you find. Standard of Practice 15-3 provides, “The obligation to refrain from making false or misleading statements about competitors, competitors’ businesses, and competitors’ business practices includes the duty to publish a clarification about or to remove statements made by others on electronic media the REALTOR® controls once the REALTOR® knows the statement is false or misleading.” In other words, if you find a statement about another REALTOR® on one of your “sites,” whether website, blog or Facebook wall, the Code requires that you publish a clarification or remove the statements you know are false.

Disclosing a short sale.

You have an obligation to know your MLS and state license law rules on short sales and to disclose a potential short sale when it’s required in those rules. Many

MLS’s have a rule that requires the disclosure of a potential short sale in the MLS. Even if your MLS does not have this rule, consider that Article 2 of the Code requires that you avoid “concealment” of “pertinent facts” about the property or the transaction. The fact that an owner cannot convey clear title without the lender reducing their outstanding balance(s) could certainly be considered a “pertinent fact” in a transaction. In any event, a buyer will eventually know about the short sale because the sale contract will necessarily need to be contingent on the seller’s lender’s approval.

Flipping, flopping or ignoring conflicts of interest.

Flipping and flopping are typically associated with short sales and involve clients buying a property from the lender at a discount and then selling it at a premium shortly afterward - often as soon as the next day. The inherent conflict is in the price differential, since there’s no improvement to


justify the difference in price. In particular, listing brokers can’t “double up” by trying to represent both the short sale seller and the short sale buyer who is attempting to flip a property. These conflicts of interest are, at a minimum, a possible violation of Article 1’s requirement to protect and promote the interests of the client – the short sale seller.

Giving unauthorized access to listings.

You should make it clear to cooperating agents that they’re expected to accompany buyers to the house and aren’t permitted to provide the lockbox combination to buyers. As surprising as it may sound, the NAR Professional Standards Committee received feedback from all around the country that cooperating agents and brokers, as well as listing agents and brokers, were at times extremely casual about access to listed property. Agents and brokers who do not personally accompany buyer prospects to listings or arrange for them to be accompanied by an agent, the seller or other authorized person, violate the trust given to them by the seller/owner.

Standard of Practice 3-9 makes it clear that unauthorized access is a violation of the Code as well as the possibility that a lockbox rule violation may occur.

The Code and its Standards of Practice are updated virtually every year to keep pace with our constantly changing business. While the principles of the Code are timeless, the details of how the Code applies are clarified and explained through the changes to the Code every year. William D. North, former Executive Vice President of the National Association of REALTORS®, elegantly described the Code as a “gift of vision” of the founders of the NAR. The Code has truly been that gift of vision – the conscience of the community of REALTORS® for the past 100 years. No doubt it will serve ably for the next 100 years.

Bruce Aydt is a REALTOR®, attorney and educator from St. Louis, Missouri. He has been involved in the management of real estate brokerages for 30 years, currently as Senior Vice President and General Counsel of Prudential Alliance, REALTORS®.

“You should monitor your

blog(s), Facebook wall and pages,

and other electronic media regularly for any

false or misleading comments

about others and immediately remove any that

you find.”


Farm transactions are diverse and potentially complex. Sometimes the seller and the buyer are both active farmers and the farm is viewed as an ongoing operation. The farm

might be reminiscent of the traditional family farm and of modest size, or it may be of immense proportions and operated by a corporate enterprise. Other farms are sold to buyers who plan to divide and sell the land or develop all or part of what had once been an active farm.

The farm offer is potentially a residential offer to the extent that a farmhouse or other living quarters are being sold. It resembles a vacant land offer because every farm includes acres of vacant land devoted to crops, grazing or forest endeavors. It also might be a complex business contract involving the documentation and environmental concerns seen in the commercial and business world. So how can one offer to purchase form begin to address all of these varying aspects of a farm sale?

The answer is that the WB-12 Farm Offer to Purchase is a mixture of provisions drawing upon the best of the residential, vacant land and commercial offers with references to agricultural issues sprinkled throughout. As the Real Estate Contractual Forms Advisory Committee of the Department of Safety and Professional Services nears finalization of a revised WB-12 Farm Offer to Purchase, improvements are being made to provide a better base form for farm practitioners to work from.

Basic Core Provisions

The first order of business was to change the basic offer to purchase provisions so that they mirror the basic provisions of the newest WB-11 Residential Offer to Purchase, as was done with the newly revised condominium and vacant land offers. Real estate professionals want to be able to know that when it comes to the basics, like earnest money, document delivery, financing, and closing prorations, the same basic standards and procedures are found in all the offers approved by the Department. For further discussion of these provisions, review the October 2011 Legal Update regarding the “WB-12 Farm Offer to Purchase - 2012 Revisions.” It is not certain whether the mandatory use date for the new WB-12 will be January 1, 2012 or a later date, but it is expected that it will be available on at least an optional basis by the first of the year.

1 - Farm Customization

The following standard offer features have been customized to fit the criteria for farm transactions:

• Disclosure Items: The list of items comprising the definition of “Conditions Affecting the Property or Transaction” mirrors, for the most part, the WRA Real Estate Condition Report – Farm. The list includes the disclosure items required in residential transactions, supplemented with items pertaining to vacant land and agricultural concerns. Some of these additional items address issues such as boundary lines, fence issues, hazardous and toxic substances disposed of in farm dumpsites, crop damage, livestock disease, pollutants or other irritants emanating from neighboring properties, livestock siting violations, manure storage facilities, and exclusive ag or farmland preservation zoning.

New Flexible Farm offer Fits All

legal

ByDEBBiConraD


• Title Timeline: The deadline for the provision of the title commitment will be “not more than ‘X’ days after acceptance (‘15’ if left blank)” to allow the parties to evaluate any title concerns early in the process before investing in any expensive inspections, testing or site assessments.

2 - Updated Provisions

Some of the provisions in the existing farm offer have been given a facelift and updated to reflect current legal standards.

• Revised Well System Inspection Contingency: This provision was modified to conform to the Wis. Stat. § 280.30(3) change eliminating master plumbers as appropriate well inspectors.

• Revised Private Onsite Wastewater Treatment System (POWTS) Inspection Contingency: What once was the Private Sanitary System Inspection Contingency is now the improved

POWTS provision. In addition to the terminology update, the list of qualified professionals and the inspections standards reflect the current standards and code requirements from the Safety and Buildings Division POWTS program. A POWTS inspection report satisfying the contingency must indicate that the POWTS complies with the code that was in effect when the system was installed, that the POWTS is not disapproved for current use, that it is hydraulically functional, and that it maintains vertical separation from limiting conditions such as groundwater and bedrock, per current code.

• Umbrella Grouping of Well Water, Well System, POWTS, Environmental Site Assessment and Inspection Contingencies: The Well Water, Well System Inspection, POWTS Inspection, Environmental Site Assessment and Inspection contingencies are all grouped together and share the Contingency Satisfaction and Right to Cure subsections that relate to all five contingencies.

3 - New Farm Features

New additions to the WB-12 include a provision for confirmation of zoning, a contingency whereby the buyer may assess the various government and land use programs applicable to the property and new contingencies for an environmental site assessment and a map of the property.

• Zoning Classification Confirmation: Rather than rely on the seller’s representations, the buyer may seek verification from municipal zoning officials confirming the zoning or that the applicable zoning allows a specified use. Farms may include multiple zoning classifications and farmers may be uncertain of the specifics. This may be an important inclusion for any buyer contemplating land division or development.

• Government Programs Contingency: The new optional contingency provision asks the seller to deliver a list of all conservation, environmental, governmental or land use programs, agreements, restrictions or easements that apply to the property along with a list of penalties or fees that are pending or deferred. Many of these programs involve requirements that the owner must meet and penalty provisions that are triggered by early withdrawal from the program or conveyances in violation of program rules. The buyer has seven days from the buyer’s “actual receipt” (which is defined in the offer) of the information to decide whether to terminate the offer. If the buyer moves forward, the buyer must reimburse the seller for any fees and penalties charged to the seller as a result of the buyer’s failure to participate or adhere to program guidelines and restrictions. This provision gives the buyer an opportunity to see what programs and fees apply to the property, and what penalties and fees may apply should the land be developed.


• Managed Forest Land (MFL) Notice and Disclosure: Wis. Stat. § 710.12 establishes disclosure requirements for the sale of property that will continue to be subject to a Managed Forest Land order after the sale. The seller must provide written disclosures no later than 10 days after acceptance that include Division of Forestry contact information and specific mandatory language: “Changes you make to property that is subject to an order designating it as managed forest land, or to its use, may jeopardize your benefits under the program or may cause the property to be withdrawn from the program and may result in the assessment of penalties.” If the property will continue in the MFL, the parties may check the box for this optional provision and accomplish the required disclosure.

• Farm Programs Information: Brief educational information is provided about the Use Value, Farmland Preservation, and Conservation Reserve Programs: a change in the use of the property could trigger substantial penalty fees under these programs. County shoreland zoning and mitigation plans are also explained. These items alert the parties to help make sure they are not caught unaware.

• Environmental Site Assessment Contingency: Because farmers over the years have been notorious for “burying stuff,” such as containers of toxic chemicals and other hazardous substances on the farm, often in one or more informal “dumps,” the WB-12 now includes a specific Environmental Site Assessment contingency. This provision provides the framework and standards for a Phase I Site Assessment. The components of an Environmental Site Assessment are described in the definitions section.

• Document Review Options: This new provision, similar to the provision in the WB-15 Commercial Offer, gives the buyer the opportunity to request a wide range of paperwork. What a buyer might select will depend upon the buyer’s planned use. Inventories clarify what is included and help avoid disputes at closing, while the operational records of a dairy farm will be useful only if the buyer is continuing the ongoing operation. Another optional choice is to request records pertaining to transfer of development rights (TDR).

• Land Use Approval: This provision is similar to the provision in the vacant land offer. This contingency gives the buyer the opportunity to secure any rezoning, conditional use permits, licenses, variances, as well as building and occupancy permits needed for the buyer’s proposed use.

• New Map of the Property Contingency: The buyer selects the desired map components by striking out unnecessary elements and writing in other criteria not mentioned in the list of prompts, thereby customizing the map. The contingency fails and the offer is null and void if the buyer delivers a copy of the map and written notice identifying any encroachment, material inconsistency, or failure to meet the map contingency requirements to the seller.

Debbi Conrad is Senior Attorney and Director of Legal Affairs for the WRA.


Agents Showing Properties Without PermissionThe lender has listed a real estate owned (REO) property with the listing broker. The listing broker just received a call from the neighbor saying there was a broker there showing the house to buyers. Can the cooperating broker conduct a showing without the permission of the listing broker?

REALTORS® must have authority to access listed property and conduct showings. Standard of Practice 3-9, which was recently updated, states, “REALTORS® shall not provide access to listed property on terms other than those established by the owner or the listing broker. (Adopted 1/10).” Regardless of whether the home is occupied or vacant, individually or REO owned, consent to show must be obtained. A broker may be found in violation of the Code of Ethics and the potential for broker liability also exists, for example, if a buyer is injured on the property or anything is stolen or damaged during an unauthorized visit.

Listing Broker Refusing Access

The agent has been calling the listing broker requesting a showing of the property. Can the listing broker refuse to allow the agent to schedule a showing?

In the Cooperation, Access to Property and Offer Presentation section

on page 1 of the WB-1 Residential Listing Contract, the seller agrees that the broker will cooperate and work with other agents in marketing the property, except as specified in the blank line near the end of the section. This section is consistent with Article 3 of the Code of Ethics, which provides that REALTORS® shall cooperate with other brokers unless cooperation is not in the seller’s best interests.

“The Parties agree that Broker will work and cooperate with other brokers in marketing the Property, including brokers from other firms acting as subagents (agents from other companies engaged by Broker, see lines 138-141) and brokers representing buyers. Cooperation includes providing access to the Property for showing purposes and presenting offers and other proposals from these brokers to Seller. Note any brokers with whom Broker shall not cooperate, any brokers or buyers who shall not be allowed to attend showings, and the specific terms of offers which should not be submitted to Seller ______. ”

In addition, Wis. Admin. Code § RL 24.13(2)(a) provides that listing brokers shall permit all buyers and their agents access to a listed property for showings unless such access is contrary to the seller’s specific written instructions. § RL 24.13(1) indicates that licensees should draft and submit all offers to the seller unless “contrary to the specific instructions of the owner.” These Administrative Code provisions allow a broker to refuse access and refuse to submit offers to

best of the legal hotline with tracy rucka

Hotline A, b, csAdvertising, Buyer agent fees and Cooperation


best of the legal hotline continued

purchase if contrary to the seller’s instructions. Although the seller may deny access to certain persons, the seller may be informed that the decision may impact marketability of the property. If the seller wants to deny access for showing purposes, this directive must be in writing. See Wis. Admin. Code § RL 24.13(1) & (2)(a) at www.legis.state.wi.us/rsb/code/rl/rl024.pdf.

Advertising Other Broker’s Listings

The listing broker received a call from the seller saying another broker was handing out flyers advertising the seller’s property. The flyers included the contact information of the agent who prepared the flyer, not the agent who listed the property. Can an agent advertise another broker’s listing without having the permission of the listing broker?

Generally only the listing broker has the authority to advertise the seller’s property. A real estate licensee may not advertise another broker’s listing without the consent of the owner and the broker. Wis. Admin. Code § RL 24.04(3) provides: “ADVERTISING WITHOUT AUTHORITY PROHIBITED. Brokers shall not advertise property without the consent of the owner.” Unless there is an arrangement negotiated with the seller and listing broker authorizing other companies to advertise the property, only the listing broker may do so. If the advertisement suggests to the public that the agent advertising the listing was the listing broker, then that practice is arguably misleading advertising in violation of state license law. § RL 24.04(1) states, “FALSE ADVERTISING. Licensees shall not advertise in a manner which is false, deceptive, or misleading.” If the agent is a REALTOR®, this practice also violates the Code of Ethics and Standard of Practice 12-4, which provides, “REALTORS® shall not offer for sale/lease or advertise property without authority. When acting as listing brokers or as subagents, REALTORS® shall not quote a price different from that agreed upon with the seller/landlord. (Amended 1/93).” These rules apply to the advertising of another broker’s listings in print, on a website, or using other electronic media. For website advertising, the internet data exchange rules may authorize advertising of another broker’s listing. Check MLS rules for IDX compliance.

Contacting the Seller Directly

The second listing broker received a call from the seller saying an offer may be coming in from a buyer via the first listing broker. The second listing broker thought that the other broker should have contacted him and not the seller. There were no protected buyers listed when the seller entered into the listing. What would be the best course of action to take with the first listing broker?

The second listing broker may wish to advise the other broker that there is a new listing currently in force and according to Wisconsin license law, negotiations must go through the listing broker. According to Wis. Admin. Code § RL 24.13(5), a licensee may not negotiate a real estate sale directly with a seller if the licensee knows that the seller has an unexpired written listing contract which grants to another broker an exclusive right to sell. All negotiations

shall be conducted with the listing broker - not the party. This rule is similar to Standard of Practice 16-13, which states, “All dealings concerning property exclusively listed, or with buyer/tenants who are subject to an exclusive agreement shall be carried on with the client’s representative or broker, and not with the client, except with the consent of the client’s representative or broker or except where such dealings are initiated by the client.”

It would be prudent as well for the second listing broker to double check with the seller and the first listing broker to make sure there were no protected buyers resulting from the first listing. If there are none, the new broker may ask the seller to refer all offers and inquiries from the former broker to the second broker.

Buyer’s Agent Fee in Offer to Purchase

The seller has received an offer drafted by a buyer’s agent. The offer asked for commission to the buyer’s agent. Can they do this?

Depending on how the contract provision was drafted, it could be a violation of the Code of Ethics or a legitimate request by the buyer to have the seller pay a buyer agency fee. Article 16 prohibits brokers from using the offer to purchase to modify a listing broker’s offer of


compensation. Given the brokers are not parties to the offer, the offer cannot compel a broker to pay an additional or different cooperative commission. Any provision that refers to the listing broker paying commission should not be included in the offer.

A buyer’s broker may ethically suggest or recommend that the buyer ask the seller to pay some or all of the buyer’s broker’s fee pursuant to Article 16 of the Code of Ethics and NAR Case Interpretation #16-17. The buyer may condition the offer upon the seller paying the buyer’s broker’s fee on behalf of the buyer, as a seller’s expense at closing. Wis. Admin. Code § RL 24.05(1) provides that the buyer’s broker must have the prior written consent of the buyer and seller to collect the fee from the seller because the seller is not the buyer’s broker’s client. The WB-36 Buyer Agency Agreement must also authorize the buyer’s broker to accept compensation from the owner or seller.

See Legal Update 05.09, “Buyer Agency Practice,” online at www.wra.org/LU0509, and Legal Update 99.06, “Revised WB-36 Buyer Agency/Tenant Representation Agreement,” at www.wra.org/LU9906, for further discussion of the issue.

Advertising Sold Listings

When advertising, is it permissible for a broker to advertise a listing that the broker sold, but that was listed by another agency?

Yes. Standard of Practice 12-7 provides, in part, “REALTORS® who participated in the transaction as the listing broker or cooperating broker (selling broker) may claim to have ‘sold’ the property.” The references to cooperating brokers in this Standard of Practice include selling brokers (subagents) and buyer’s brokers. Accordingly, there may be two different brokers claiming to have ‘sold’ the same property: the listing broker and the cooperating broker.

Advertising Sold Property after Changing Companies

The agent has recently changed companies. When advertising with the new company, he included a list of properties that he sold while with the previous broker. Is it a violation of the Code of Ethics to advertise these properties?

The National Association of REALTORS® in May of 2010 adopted a new Case Interpretation #12-26 entitled “Advertising Role in Sales After Changing Firm Affiliation.” In the NAR’s interpretation of Article 12, an agent was not found to violate Article 12 when he advertised his participation in sales which occurred under the employment of his previous broker. The decision referenced Standard of Practice 12-7 and focused on the disclaimer the agent made in the advertisements. The agent disclosed the properties were sold over the last seven years, and for much of that time, the agent was affiliated with a different firm. Because a consumer would understand some of the sales occurred with the previous firm, no violation of Article 12 was found. The full case interpretation may be viewed in the Code of Ethics and Arbitration Manual at www.realtor.org/mempolweb.nsf/pages/ceam.

Tracy Rucka is Director of Professional Standards and Practices for the WRA.

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ByCorilamont

repeat After me: “call an Attorney” A reminder of a licensee’s role

in a real estate transaction

In a marketplace where sellers are upside down in a home, it may be difficult to have them see the benefits

of spending money to utilize the services of an attorney, and I understand you may not always be able to persuade them. However, the fact that a seller or purchaser cannot afford legal counsel does not permit a real estate licensee to assume the role of an attorney.

In Wisconsin, the role of an attorney is saved for those that are licensed to practice law in Wisconsin and are a member of the Wisconsin State Bar. And if you do not meet those criteria, then repeat after me: “call an attorney.”

A real estate licensee’s role is to complete offers and other contracts for their clients and customers using preprinted forms. A real estate licensee can handle all of the negotiations between buyers and sellers

as well as assist with arranging financing, inspections and closings. A real estate licensee cannot provide legal or tax advice, unless that real estate licensee is also an attorney.

A few examples of questions a real estate licensee cannot answer are:

1. How should I take title?

2. Is this a defect?

3. What are the tax consequences of a 1031 exchange?

Only an attorney can advise the parties as to their legal rights under the terms of the transaction documents.

A licensee should encourage a consumer to seek out the opinion of an attorney before a buyer submits an offer to a seller and before a seller accepts an offer from a buyer. While a real estate licensee can provide general explanation of the provisions of an

“Call an attorney.” This is a simple but powerful

phrase of three simple words. While you may

choose an alternative way to convey this message,

this phrase or its meaning should not be saved for

special occasions and should be used regularly,

if not daily, as a real estate licensee.


approved form, the licensee is limited in giving their opinion or advice concerning a consumer’s legal rights under an offer.

Wis. Admin. Code § 16.05 provides licensees a reminder that a licensee may give a general explanation of the provisions in an approved form to the parties but not to give any advice or opinions as to the legal effects of a specific contract or conveyance, or as to the legal rights or obligations of the parties. In addition, all of the state-approved (WB) forms include a note relaying the licensee’s limited role involving the provisions of the offer to purchase. The following excerpt is from lines 294-297 of the WB-11 Residential Offer to Purchase:

BROKERS MAY PROVIDE A GENERAL EXPLANATION OF THE PROVISIONS OF THE OFFER BUT ARE PROHIBITED BY LAW FROM GIVING ADVICE OR OPINIONS CONCERNING YOUR LEGAL RIGHTS UNDER THIS OFFER OR HOW TITLE SHOULD BE TAKEN AT CLOSING. AN ATTORNEY SHOULD BE CONSULTED IF LEGAL ADVICE IS NEEDED.

In the 2011 revisions to the state-approved offers, this entire note was placed in bold. This formatting modification allows the language to pop off the page, thus providing licensees the opportunity to highlight to the consumer the licensee’s limited role relating to the transaction documents and to encourage the consumer to seek out legal expertise.

Wis. Admin. Code RL § § 24.06 (1), “Licensees shall not engage in activities that constitute the unauthorized practice of law. (2) Licensees shall not discourage any person from retaining an attorney.”

In the early 1960s, by a 4-3 decision, the Supreme Court confirmed the real estate licensee’s limited right to practice law in a real estate transaction. In State ex rel. Reynolds v. Dinger in 1961, the Supreme Court held that when a licensee uses the state-approved forms to accomplish the intent of the consumer, it is the practice of law and provides a useful benefit to the public.

For almost 50 years, Dinger has afforded real estate licensees the right to draft state-approved forms on behalf of consumers. On June 1, 2010, the Wisconsin Supreme Court unanimously voted to adopt SCR Chapter 23 Regulation of Unauthorized Practice of Law, which included specific language allowing licensees to continue their ability to draft real estate contracts on behalf of consumers. The coupling of Dinger and SCR 23 solidifies the real estate licensee’s role in the transaction, but does not permit licensees to provide legal advice.

A great source for information regarding the role of attorneys and attorney referrals is the State Bar of Wisconsin. For real estate attorney referrals and other consumer information, visit www.legalexplorer.com.

As one last final reminder, the WRA Legal Hotline is a service provided exclusively for WRA members and their attorneys. WRA members pay for this service in their dues and this is not a service available to the public. WRA members should not refer their customers or clients to the WRA Hotline for information or guidance. The WRA Legal Hotline is a legal information service and not an attorney-client relationship and is not available for personal legal advice. In order to provide legal advice, a complete understanding of your practice and the particular transaction would be required and that is not possible in the Hotline format. For more information relating to the WRA Hotline services, go to www.wra.org/HotlineHelp.

Cori Lamont is Director of Brokerage Regulation and Licensing for the WRA.


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Lake of the Torches Resort Casino & Convention Center

2012 Winter Convention

January 25-27, 2012

Wednesday, January 25

8:30a.m.-4:30p.m. Resort and Second Home Markets - ABR Elective and Core Course for the RSPS Certification

8:30a.m.-12:00p.m. CE Elective A Short Sales and Foreclosures

1:00p.m.-4:30p.m. CE Elective C Other Approved Forms

2:00p.m.-5:00p.m. Snowmobile outing, snowshoeing, cross country skiing, ice fishing (make your own reservations)

4:30p.m.-6:00p.m. Exhibits Open

4:30p.m.-6:30p.m. Welcome Party, DJ + Karaoke

4:15p.m.-6:30p.m. Chili Cook-Off: Enter your favorite recipe and you may win a prize! Sponsored by Northwoods Association of REALTORS®

Thursday, January 26

8:00a.m.-5:00p.m. Exhibits Open

8:30a.m.-12:00p.m. CE Course 1 - Listing Contracts

10:00a.m.-11:45a.m. Opening Session “New Year, New You” presented by Terry Watson Two lucky winners will receive a $150 WRA credit. Must be present to win.

11:45a.m.-1:00p.m. Broker Lunch (ticketed event)

1:00p.m.-4:30p.m. Course 2 - Offer to Purchase

1:15p.m.-2:45p.m. Workshops

• Killer Apps - Free or Darn Near Free• Grow Your Business on a Shoestring Budget• Paperless Transaction• Psychology of Prospecting – How to Make it

Virtually Impossible for a Prospect to Tell You No


• Still Standing – Life Support for REALTORS® in Changing Markets

• Expired Mastery – 3 “Outside the Box” Marketing Strategies That Will Have Sellers Begging You to Take Their Listing

• Surf and Turf• Create Your Own Listing Videos Using SONY

Vegas

4:15p.m.-7:00p.m. Reception and DJ

Friday, January 27

7:30a.m.-8:30a.m. Rotary Club Meeting Rotarians Meet and Greet

8:00a.m.-1:15p.m. Exhibits

8:30a.m.-11:30a.m. CE Course 3 New Developments

9:00a.m.-10:15a.m. Workshops

• What You Don’t Know Can Hurt You• Real Estate Warrior• Delivering “Knock Your Socks Off” Web Content

Using Google Analytics

10:30a.m.-11:45a.m. Workshops

• Change, Change & More Change• Home Inspection: Defect or No Defect?• Making Social Media Work For the Busy Agent

11:45a.m.-1:00p.m. CRS Lunch (Ticketed Event)

1:00p.m.-4:30p.m. CE Course 4 - Business Ethics


• Roadside Video• Safety & Self-Defense for Real Estate

Professionals• REO Buying - Diamond in the Rough or Just

Rough?

Register by Mail: WISCONSIN REALTORS® ASSOCIATION4801 Forest Run Road, Suite 201 Madison, WI 53704-7337

Register by Phone: 800.279.1972 | 608.241.2047Fax: 608.241.5168 Online Registration: www.wra.org/winterconvention


education

Resort and Second Home Markets (RSPS Certification)January 25, 2012Lake of the Torches - Lac du Flambeau

ABR Elective and Core Course for RSPS Certification

This one-day core course focuses on the knowledge and skill base that real estate professionals need in buying, selling or managing second homes in a resort, recreational and/or vacation destination as well as properties for investment or development. Students will learn specialized skills and expertise to make informed decisions about buying and selling resort and second-home properties. This course is required to attain the Resort & Second-Home Property Specialist (RSPS) Certification and also meets the elective course requirement for the ABR Designation. This course will be held at the Lake of the Torches, Lac du Flambeau, WI. Registration for this also includes the registration for the Winter Convention.

www.wra.org/WinterConv

Out-of-State Continuing EducationMarch 5-7, 2012Tuscany Suites and Casino | Las Vegas, NV

Grab your suitcase ... this isn’t your typical Continuing Education (CE) program! Break away from the winter blues, and join us for CE in sunny Las Vegas in March 2012! With many CE courses to choose from, the Las Vegas Strip and sunshine, this is an educational opportunity you won’t want to miss! Make plans now to join us in Viva Las Vegas. Visit www.wra.org/CEOut-of-State for more information.

Broker Pre-License CourseJanuary 30 - February 2, 2012Greater Milwaukee Association of REALTORS®

Broker pre-license education will increase from 36 to 72 hours, effective July 1, 2012. Also on the horizon is a proposed change to job experience requirements to become a broker. Under the proposal, Wisconsin broker applicants would be required to show two years of documented real estate experience as a real estate salesperson within the last four years preceding application.

The Broker Pre-License course covers contracts, approved forms, trust accounts, escrow and closing statements, business management and marketing, financial and office management, personnel business ethics, consumer protection and specialty areas. Completion of Sales Pre-License education and passing the real estate sales exam are prerequisites. Completion of the Broker Pre-License Course, passing the broker exam and receiving the broker’s license fulfills the 2011-2012 Continuing Education credits.

www.wra.org/Broker_career

BPO (Broker Price Opinion)February 9, 2012WICPA - Brookfield

Earn the Broker Price Opinion Resource (BPOR) Certification!

Whether you are experienced at preparing broker price opinions (BPOs) or are new to the business, this new NAR certification course will provide you with the know-how to produce professional and accurate BPOs. With your BPOR certification, you’ll be able to prepare accurate BPOs, evaluate market tools for productive preparation of BPOs, and identify and weigh all factors influencing the creation of a useful valuation.

Upon completing this one-day course, you’ll be required to view a free webinar, submit the BPOR application and pay a one-time fee to earn the BPOR certification. The course also meets the elective course requirement for the ABR designation. Submitted for continuing education credits.

www.wra.org/BPOR_overview

Appraisal Continuing Education www.wra.org/APPCE

• November 10, 2011 Vacant Land Appraisal (3.5 hours) Rice Lake

• November 10, 2011 Rural and Unique Properties (3.5 hours) Rice Lake

• November 15, 2011 7-Hour National USPAP 2012-2013 Update Appleton

• November 16, 2011 Technology for Mobile Professionals (3.5 hrs.) (a.m.) Brookfield

• November 16, 2011 Principles & Procedures of Residential Review (3.5 hrs.)(p.m.) Brookfield

• November 17, 2011 Using Excel in Your Appraisal Practice (7 hrs.) Madison

QuickStartOn DemandThe QuickStart program assists agents in learning the business of real estate. Courses focus on contract issues, agency relationships and negotiating strategies. The program is designed to help agents become confident in their practice as well as focused on their personal business plan. Completion of the QuickStart program is four days, and passing the exams fulfills the requirements for GRI Course 1. Visit www.wra.org/QuickStartondemand.


Course Schedule

Visit www.wra.org/CourseSchedule for full schedule.

Sales & Marketing Management date course location thru 1/10 after 1/10 a.t.d.

January 25, 2012 Resort & Second Home Markets Lac du Flambeau $195 $205 $225 (Includes convention)

conference and conventions date event/course location

December 8, 2011 Management Conference Country Springs Hotel, Pewaukee December 7, 2011 Course 4: Business Ethics for the Supervising Broker

January 25-27, 2012 Winter Convention Lake of the Torches, Lac du Flambeau March 13-14, 2012 Appraisal Conference Kalahari Resort, Wisconsin Dells

Real Estate Continuing Education Date course location Price

November 9, 2011 2011-12 Courses 3 & 4 Madison (800) 279-2971 $27/m; $35/nm November 9, 2011 2011-12 Courses 3 & 4 Manitowoc (920) 553-6227 November 9, 2011 2011-12 Courses 3 & 4 Brookfield (800) 279-1972 $27/m; $35/nm November 10, 2011 2011-12 Courses 1 & 2 Lake Geneva (262) 723-6851 November 11, 2011 2011-12 Elective C & D Brookfield (800) 279-1972 $27/m; $35/nm November 16, 2011 2011-12 Elective C & D Madison (800) 279-1972 $27/m; $35/nm November 17, 2011 2011-12 Courses 3 & 4 Lake Geneva (262) 723-6851 December 7, 2011 2011-12 Course 4 Pewaukee (800 279-1972 January 25, 2012 2011-12 Electives A & C Lac du Flambeau (800) 279-1972 January 26, 2012 2011-12 Courses 1 & 2 Lac du Flambeau Register for Winter Convention (included in registration fee) January 27, 2012 2011-12 Courses 3 & 4 Lac du Flambeau Register for Winter Convention (included in registration fee) March 5, 2012 2011-12 Courses 1 & 2 Las Vegas March 6, 2012 2011-12 Courses 3 & 4 Las Vegas March 7, 2012 2011-12 Electives A & C Las Vegas

2011-12 Electives: Elective A – Short Sales & Foreclosures Elective B – Environmental Matters Elective C – Other Approved Forms Elective D – Financing

Appraisal Continuing Education Date course location November 10, 2011 *Vacant Land Appraisal (3.5 hours) Rice Lake November 10, 2011 *Rural and Unique Properties (3.5 hours) Rice Lake November 15, 2011 *7-Hour National USPAP 2012-2013 Update Appleton November 16, 2011 Technology for Mobile Professionals (3.5 hrs.) (a.m.) Brookfield November 16, 2011 Principles & Procedures of Residential Review (3.5 hrs.)(p.m.) Brookfield November 17, 2011 Using Excel in Your Appraisal Practice - (7 hrs.) Madison (Thisisahands-oncourse.StudentsmustbringalaptopinstalledwithMicrosoftExcel2007.)

AllcourseshavebeenapprovedforWisconsinandMichiganAppraisalCE.ThosemarkedwithanasteriskindicatetheonesapprovedforWisconsinAssessorCE. CourseshavebeensubmittedforapprovalforMinnesotaAppraiserCE. CheckouttheAppraisalContinuingModulesavailablebyDVDandOnline.

Pre-License date course location member price non-member price January 30 - February 2, 2012 Broker Pre-License Course Milwaukee $260* $280* *Plusbooks

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*Plus books** early registration applies two weeks prior to the start of the course.***Wisconsin CRS Members receive a $20 discount# Appraiser section members receive a discount

The 2009-2010 real estate continuing education is still available through On Demand, DVD and Self-Study Booklets:Course 1 – Listing ContractsCourse 2 – Offer to PurchaseCourse 3 – New DevelopmentsCourse 4 – Buyer Agency AgreementsElective A – Risk ReductionElective B – 1031 Exchanges and Exchange OpportunitiesElective C – CondominiumsElective D – Landlord/Tenant and Property ManagementElective E – FinancingElective F – Broker Supervision


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Geo-Based MarketingResidential Offer to PurchaseThe Explanation of the State of Wisconsin Residential Offer to Purchase

Asanethicalandprofessionalrealestateagent,ensuringyourclientshave a comprehensive understanding of the documents they arerequired tocomplete isapriority.Youwant them to feel comfortableandconfidentthroughouteverystepoftheprocess.TheWRApresentsanother tool to aid you in offering the highest quality professionalservices: the 2011 Explanation of the State ofWisconsin ResidentialOffertoPurchase.

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22 wisconsin real estate magazine | september 2011 www.wra.org/wrem

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©2011 Wisconsin REALTORS® Association

Explanation of the State of Wisconsin Residential Offer to Purchase


offer_listing_expl_cover.indd 3 8/18/2011 9:10:00 AM

brIgHt FuturES StArt HErE

dEcEmbEr 7-8, 2011 • couNtry SprINgS HotEl pEwAukEE, wIScoNSIN

If you’re a manager or broker, the WRA’s mANAgEmENt coNFErENcE is just for you! With several great sessions, you’ll gain insight into the economy and your practice – relevant for today and tomorrow.

coNFErENcE HIgHlIgHtS:cE4: Business Ethics for Supervising BrokersopEN SESSIoN SpEAkEr: Thaddeus Wong, Co-Founder, @properties oN tHE roAd to A HouSINg rEcovEryPanelists: Curt S. Culver, Chairman and CEO, MGIC Investment CorporationMark Eppli, Professor and Bell Chair of Real Estate, Marquette UniversityRon Steinhofer, Senior Vice President - RE Lending Sales, Mid America Bank workSHopS • Recruiting with Technology Today• The Good, the Bad and the Ugly: What You Need to Know About Tax Changes• Marketing, Branding and Leadership• The Call is Coming From Inside Your Office• The Perfect Sales Meeting• 10 Essential Risk Control Tips for Brokers and Owners• Sustainable Brokerage Profits• Leading Agents Through the Social Media MazetHE mobIlE movEmENt: Brad Andersohn, Industry Outreach Manager at Zillow.com Don’t miss your chance to win a $500 airline travel voucher from Travelog at Management Conference! Must be present to win.

www.wrA.org/mANAgEmENt


realtor® sales tip

BymarCuswally

there’s No right way to do the wrong thing!

In 1913, The National Association of REALTORS® adopted the Code of Ethics, and its primary theme was the

“Golden Rule.” Many of us grew up with that instilled in us as young children. Our Code of Ethics is good for our business today in more ways that we can imagine. It separates us from many other professionals that do not have a standard of behavior in which they conduct their trade.

REALTORS® can take no safer guide than that which has been handed down through the centuries in the “Golden Rule” which states, “Whatsoever ye would that others should do to you, do ye even so to them.”

Today we conduct ourselves in this manner for the protection of the public and our peers. The Code is divided into three sections:

• Duties to clients and customers

• Duties to the public

• Duties to REALTORS®

Following our ethical guidelines enhances our reputation with the buying and selling public. And we could also say this in a slightly different way, which is, “doing the right thing may not always be easy ... but is always right!”

Prior to the 1900s, there was no licensing of real estate practitioners; our business was wild with speculation, exploitation and disorder. You might as well say that our industry

was a field where caveat emptor governed transactions. That is “buyer beware,” as we all know. And thank goodness that is not how we do business today!

To me, ethics is defined as your commitment to making ethical decisions and living an ethical life. So this month, I want to share a few of the articles that we must keep ever mindful as we practice in this awesome field of business.

Article 2 is known as the “disclosure article” as it states that we should always disclose, disclose, disclose. When we feel something in our gut, we must never forget to tell it to all parties. When discovering a defect with the property, it is our duty to disclose it to the buyer. Anything that is clearly visible does not need to be brought to the attention of all parties, but if it is hidden or not readily visible, we must disclose. Critical court cases brought this article to our attention, and it is one of the most critical of the 17 articles we have today.

If a REALTOR® believes information provided by a seller is questionable, the REALTOR® should recommend that buyers consult their own experts, such as home inspectors, to address concerns. For example, if a home seller asks his or her REALTOR® to conceal the fact that the roof leaks, the REALTOR® cannot comply; if the seller insists, the REALTOR® should end the business relationship with that seller.

“Following our ethical guidelines

enhances our reputation with the buying and selling

public.”

Article 4 reminds us that REALTORS® shall not acquire an interest in or buy or present offers from themselves, any member of their immediate families, their firms or any member thereof, or any entities in which they have any ownership interest, any real property without making their true position known to the owner or the owner’s agent or broker.

We also must remember that when selling property we own or in which we have any interest, REALTORS® shall reveal their ownership or interest in writing to the purchaser or the purchaser’s representative. Remember: always disclose your status as a professional REALTOR®!

Of course, knowing the definition of “immediate family” is necessary. And the proper list is as follows:

• The REALTOR®

• The REALTOR®’s spouse

• Their siblings

• Their parents

• Their grandparents

• Children by birth/adoption

• Grandchildren

• In-laws

All we need to do is attach an addendum stating that the buyer or seller is related to the REALTOR® writing the offer, and we are in full compliance. Just treat others as you would want to be treated! Disclose that you are the owner of the property that is listed for sale, or that you, a licensee, is the buyer named on the offer paperwork. It’s so simple to comply!

Article 9 provides a strong reminder to never allow verbal negotiations to take place. Keep all details, negotiations, disclosures, contracts and addendums in a written format to protect all parties, including us! Agreements shall be:

• In writing whenever possible.

• In clear and understandable language.

• Expressing the specific terms, conditions, obligations and commitments of the parties.

• Copied, and a copy of each agreement shall be furnished to each party upon their signing or initialing.

By following these simple steps, our integrity jumps to a higher level as there is no room for doubt. Everything is in writing and copies are provided to all parties.

Article 12 is our truth serum article. This article requires us to be truthful in all real estate marketing and advertising. And this includes everything we do on the web and with social media as well. Be honest and truthful in real estate communications.

We must always present a “true picture” in advertising, marketing and other representations. Ensure that your status as a real estate professional is readily apparent in advertising, marketing and other business. Never allow the public to be misled concerning who exactly they are dealing with.

Each day when getting dressed, I pin on my company nameplate, and I also pin my large “R” for “REALTOR®” onto my coat lapel. The shiny pin is a super conversation starter, and besides, I am proud of my profession!

You may find it quiet fascinating to know that if you log on to www.realtor.org, you can access the current Code of Ethics, as well as past versions, to see the changes that have been adopted as our world changes. Additionally, the entire Code of Ethics is available in Chinese, Korean, Spanish, Tagalog and Vietnamese.

So make it your practice to talk about what makes us different and share it with each and every customer or client. This level of commitment to doing the right thing will draw the customer or client closer to you and increase your amount of loyal followers.

The Code of Ethics is our promise of professionalism!

Marcus A. Wally, MBA, is an active Florida REALTOR® in St. Augustine, Florida. Marcus is the founder and broker of New World Realty, which also manages coaching and facilitation of education classes around the world. Marcus earned his MBA from the University of North Florida in Jacksonville. He can be reached at (904) 669-1081 or by e-mail at [email protected].

Statement of Ownership, Manage-ment and Circulation. Publication Title: Wisconsin Real Estate Magazine. Pub-lication Number: 1548-0526. Filing Date: October 2011. Issue Frequency: Monthly. Number of Issues Published Annually: 12. Annual Subscription Fee: $9 Members, $60 Non-Members. Com-plete Mailing Address of Known Office of Publication: Wisconsin REALTORS® As-sociation, 4801 Forest Run Road, Suite 201, Madison, WI 53704-7337. Con-tact Person: Lauren Bizorik. Telephone: (608) 241-2047. Complete Mailing Address of Headquarters: Wisconsin RE-ALTORS® Association, 4801 Forest Run Road, Suite 201, Madison, WI 53704-7337. Full Names and Complete Mailing Addresses of Publisher, Editor and Man-aging Editor: Publisher, Michael Theo; Editor: Lauren Bizorik; Managing Editor: Rob Uhrina; Wisconsin REALTORS® As-sociation, 4801 Forest Run Road, Suite 201, Madison, WI 53704-7337 (same address for all). Known Bondholders, Mortgages, or Other Securities: None. Tax Status: Has Not Changed During Preceding 12 Months. Publication Title: Wisconsin Real Estate Magazine. Issue Date for Circulation Data Below: August 2011. Extent and Nature of Circulation (first number gives average of copies of single issue published nearest to filing date): Total Number of Copies (14,116; 13,819); Paid/Requested Outside-County Mail Subscriptions (12,046; 11,859); Paid In-County Subscriptions (1,865; 1,755); Sales Through Dealers and Carriers, Street Vendors, Counter Sales and other Non-USPS Paid Dis-tribution (0; 0); Other Classes Mailed Through the USPS (0; 0); Total Paid Distribution (13,911; 13,614); Free Distribution by Mail; Outside-County (30; 30); In-County (10; 10); Other Classes Through the USPS (0; 0); Free Distribution Outside the Mail (15; 15); Total Free Distribution (55; 55); Total Distribution (13,966; 13;669); Cop-ies Not Distributed (150; 150); Total (14,116; 13,819); Percent Paid and/or Requested Circulation (99.61 percent; 99.60 percent); Publication Statement of Ownership: Publication Required. I certify that all statements made by me above are true and complete. Lauren Bizorik, Editor, September 20, 2011.

statement of ownership



the political year AheadByjoEmurray

legislative

The election year of 2012 is just around the corner. Wisconsin voters will go to the polls to vote

for President, a new U.S. Senator, eight members of Congress, 16 state Senators and 99 members of the state Assembly. And there’s more. It’s very likely we will see more recall election activity involving Republican Governor Scott Walker and as many as five state Senators in targeted GOP districts who will become legally eligible for recall elections in 2012. Here’s a brief look at the coming elections for next year.

President

President Barack Obama won Wisconsin by 14 points in 2008, carrying 59 of 72 counties.

After extremely close presidential races in

2000 and 2004, Wisconsin voted solidly for

the Democratic ticket for President in 2008,

with Obama winning 56 percent of the vote.

That’s likely to change in 2012. The race for

President next year will probably look more

like the close elections in 2000 and 2004 and

the 2011 election for Wisconsin Supreme

Court. In 2008, Obama had the wind at his

back in Wisconsin after he soundly defeated

Hillary Clinton in the February primary 58

to 41 percent. However in 2012, he will run

as the incumbent with a record. Wisconsin’s

status as a swing state will likely return with

lots of attention from both sides as they

compete for all 10 electoral votes.

“The biggest question relating

to the likely recall election of

Republican Governor Scott Walker is when

the recall election date will be set.”



U.S. Senate

After 24 years in the U.S. Senate, Democrat Herb Kohl is retiring. Given the current political environment and traditionally close elections for open seats, the U.S. Senate race in Wisconsin should be very competitive and draw substantial national attention.

Unless another candidate enters the race on the Democratic side, it appears Madison Congresswomen Tammy Baldwin, D-WI, is the choice for Democrats next fall. Baldwin jumped into the race early and remains the only announced candidate on the Democratic ticket. Congressman Ron Kind from La Crosse decided against running and former Congressman Steve Kagen of Appleton has yet to officially declare his intentions.

The GOP side of the equation is a different story. Former Gov. Tommy Thompson is moving closer to a formal announcement, former Rep. Mark Neumann, R-WI, and Assembly Speaker Jeff Fitzgerald have declared, and state Sen. Frank Lasee has signaled his intention to enter the race.

Political prognosticator Larry J. Sabato, a political scientist with the University of Virginia Center for Politics and publisher of Sabato’s Crystal Ball, has placed the U.S. Senate race in Wisconsin in the “toss-up” category. The last time there was an open U.S. Senate race in Wisconsin was 1988, when Democrat Herb Kohl defeated Republican state Senator Susan Engeleiter 52 to 48 percent.

Congress

The current makeup of the Wisconsin congressional delegation is five Republicans and three Democrats. In November 2010, Wisconsin voters elected two new Republicans to Congress for the first time since 1974: GOP Reps. Sean Duffy from Weston and Reid Ribble from DePere. The Democrats are expected to mount strong challenges to both of these freshman incumbents with Duffy, the first Republican elected to Congress from the 7th District in 41 years, expecting the stiffest challenge.

Both Duffy and Ribble have announced opposition. Former Democratic state Senator Pat Kreitlow of Eau Claire has entered the race against Duffy and Jamie Wall, who finished second in the Democratic primary for Congress in 2006 in the 8th District, has entered the race against Ribble.

Pending any other surprise announcements, the only other significant development in the Wisconsin delegation will be the race to succeed Democratic Rep. Tammy Baldwin in the Madison-based 2nd District. The winner of the Democratic primary election is virtually guaranteed to be the winner in November. The 2nd District is overwhelmingly Democratic. The three announced candidates on the Democratic side are state Reps. Mark Pocan and Kelda Helen

Roys, and Dane County Treasurer Dave Worzala.

State Senate

Republicans now control the Wisconsin state senate 17-16, after recall organizers defeated two GOP Senators in the August 9 recall elections. This means the State Senate will likely remain in the hotbed of political activity in 2012. Public employee unions have strongly indicated their interest in recalling more GOP Senators in 2012.

The breakdown for the “normal” election cycle in the State Senate calls for six Republicans and ten Democrats to run again in 2012. With a one-seat GOP Majority, Republicans need to hold all their seats to maintain power. Thus, any recall activity that succeeds in removing Republican senators from office will flip control of the upper House to the Democrats. The unknown factor? How the redistricting plan passed by the Legislature in August will influence elections during the “normal” election cycle of 2012 and/or the possible recall elections in the Senate, should they materialize.

State Assembly

The current makeup of the State Assembly is 58 Republicans, 40 Democrats and one Independent. In November 2010, Republicans netted a 13 seat pickup to take a commanding majority of all seats in the Assembly. All 99 members are required to run every two years, unlike the State Senate where members have four-year terms.

The magnitude of the GOP victory in 2010 and the redistricting plan passed in August will make it very difficult for Democrats to regain power in 2012. While it’s possible for Democrats to chip away at the Assembly GOP majority through recall elections, it remains to be seen if the unions will mount recall attempts in the lower House.

Governor Walker Recall Election

The biggest question relating to a possible recall election of Republican Governor Scott Walker is when the recall election date will be set. The earliest possible date to begin legally collecting the 540,000 signatures required to force the election is November 4, 2011. Signature organizers will then have 60 days to reach their goal and begin the process to set a date for the actual recall election.

As you can see, the political table being set for 2012 is as complex as it is important, making your support for the REALTORS® Political Action Committee (RPAC) and the Direct Giver/Conduit program more important than ever. Watch for more updates on these races as we move closer to the 2012 election cycle in Wisconsin.

Joe Murray is Director of Political and Governmental Affairs for the WRA.


wrA to pursue legislation that protects the right to rent Homes

Bytomlarson

In response to increasing regulations at both the state and local levels on rental of single-family residences, the

Wisconsin REALTORS® Association will be seeking legislation that protects the rights of homeowners to rent their homes by barring the enforcement or adoption of local ordinances that prohibit or unreasonably restrict the ability of homeowners to rent out their homes.

Background

Thousands of Wisconsin homeowners choose to rent out their homes every year. Some rent their homes when they must move away temporarily for work, school or military duty. Others purchase homes in popular vacation areas for investment purposes and rent them out to tourists who travel to Wisconsin for vacation. With the downturn in the real estate market, many more homeowners are choosing to rent out their homes, rather than sell them at significant losses.

State and local regulations, however, are making it more difficult and, in some cases, impossible for homeowners to rent out their homes. For example, Wisconsin’s Department of Health Services imposes expensive inspection requirements and fees on homeowners if they rent their homes to anyone who has another permanent residence, regardless of the duration of the rental period. See Wis. Stat. § 254.61. Local communities often charge $200 to $500 to perform these inspections. Other communities have gone even further by adopting ordinances that specifically prohibit the rental of single-family homes.

Impact on Homeowners and the Real Estate Market

Making it more expensive to rent and/or prohibiting homeowners from renting out their homes is harmful to Wisconsin families, homeowners and the real estate industry for the following reasons:

Negative impact on second-home markets: Many people have purchased second homes as an investment with the intention of renting them out on a seasonal basis to generate income or to help pay for ownership costs. Banning the rental of homes by ordinance undermines the investment-backed expectations of these homeowners and prevents them from using the property for the primary purpose for which they purchased it. Moreover, without the ability to rent, prospective homebuyers may be less likely to purchase homes in these areas, which could negatively impact the prices and/or marketability of these homes.

Increase in foreclosures: Many homeowners who didn’t intend to rent out their homes have recently been forced to do so due to the downturn in the economy. Renting out their homes provides these homeowners with a necessary income source to provide for their family and to possibly avoid foreclosure. Prohibiting rentals could result in a greater number of foreclosures.

Greater difficulty obtaining financing: Obtaining financing to purchase or refinance real estate has become more difficult. Appraisers and loan underwriters are scrutinizing more closely all conditions that could affect the value of the property, including local ordinances. Ordinances which prohibit the rental of homes could negatively impact the value and thus the ability to obtain financing for these homes.

Hurts tourism: The ability to rent a cottage or cabin “up north” is part of Wisconsin’s cultural heritage. For generations, families from Wisconsin and other parts of the country have rented cottages and cabins to spend time together hunting, fishing and boating. For those families that cannot afford to own a second home, renting a cottage or cabin for one or two weeks out of the year presents them with a special opportunity to enjoy Wisconsin’s wonderful water resources. Local ordinances that ban the rental of cottages and cabins, and/or subject them to expensive inspection requirements, limit the ability of families to vacation in Wisconsin and ultimately hurts our state’s tourism industry.

The WRA will work with legislators and other stakeholders to hopefully address this issue during the next several months. If you have questions about this legislation, please contact Tom Larson ([email protected]) at (608) 240-8254.

Tom Larson is Vice President of Legal and Public Affairs for the WRA.

© 2011 CENTURY 21 REAL ESTATE LLC. ALL RIGHTS RESERVED. CENTURY 21® IS A REGISTERED TRADEMARK OWNED BY CENTURY 21 REAL ESTATE LLC. AN EQUAL OPPORTUNITY COMPANY. EQUAL HOUSING OPPORTUNITY. EACH OFFICE IS INDEPENDENTLY OWNED AND OPERATED.

WHAT MAKES A CENTURY 21 AGENT? IT’S lIKE THAT SToRY AboUT THE ENGINE THAT CoUld. ExCEpT THESE ENGINES CAN. ANd THEY do. WHICH IS ExACTlY THE ATTITUdE IT TAKES To MAKE THINGS HAppEN. THEY KNoW THEY CAN. CENTURY 21® AGENTS.SMARTER. boldER. FASTER.

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november 2011 - wisconsin real estate magazine

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