June 2010 - Wisconsin Real Estate Magazine by Lauren Bizorik

Legal Hotline

Out-of-state sales, fractional ownership and other timeshare questions.

June 2010 $5.00

reframing balance

the 2010 legislative

The WRAâ&#x20AC;&#x2122;s efforts and successes in the 2010 legislative session.

MAGAZINE

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table of contents

features 6

Reframing Balance We lead busy lives in challenging times. One solution is to throw out the idea of “balance” altogether and strive instead for resilience.

Behind the Curtain: E-Commerce and E-Sign

Inside the Wisconsin Way: Part 3

WRA Experiences Successful Legislative Session

Confused about the ins and outs of WB-11 Residential Offer to Purchase e-mail delivery? Read on.

A closer look at the plan to restore Wisconsin prosperity, with a focus on government reform and modernization.

Learn how the WRA fared in a busy legislative session that saw approximately 1700 pieces of legislation introduced.

june

vol.

26, no. 9

articles 9

19 28

news.wra.org

2010 |

Harnessing Your Power Need real-world solutions for managing resources in the home and office? This month’s Sales Tip offers several ideas.

Best of the Legal Hotline With a focus on timeshares, the hotline addresses questions of out-of-state sales, fractional ownership and more.

Title Exceptions and Gap Coverage The subject of title insurance and its fine print can induce glassy-eyed stares. A brief review of Title Insurance 101 is in order.

Product Showcase CE is now even easier with the WRA’s next generation of Distance Learning On Demand.

Record Number of Lawmakers Call it Quits The lead-up to the fall elections is already full of surprises, including 41-year Congressman Obey’s recent announcement to retire.

News

inside the wra

with bill malkasian

Top News Stories in and Around the Industry

On another note, we are seeing ast month, I joined WRA officers and nearly sixty ® CE classessubstantially fill fast, soincrease I’ll takefunding for rental assistance, Wisconsin REALTORS in Washington, D.C. for NAR’s United Way Honors the Wisconsin Receives Millions toourEase the opportunityparticularly to remindhelp youfor that we families. mid-year meetings. Together, we brought the Wisconsin working Stark Family for Service Foreclosure Crisis perspective to both the national meetings Milwaukee Business Journaland (WI)Capitol (09/30/08) offer Distance Learning On Demand. As to Community Rob Uhrina’s NAR articleReleases points out, we FHA haveToolkit Hill and discussed the major issues facing our industry. United Way of Dane County Free The state of Wisconsin is due to receive nearly $39 launched a number of new DLOD features to Wisconsin REALTORS® Association (10/30/08) million in federal to stabilize neighborhoods United Way of DaneOnCounty the Stark May recognized 12, we went to the Hill to meet withfunds the Wisconsin help you navigate the courses and fulfill your and stave off a spate of abandoned homes. According Family with the 2008congressional Tocqueville Society Award for delegation. Ironically, the WRA had just released first NAR by and December the WRA are14. eager to help you meet the requirements Wisconsin to HUD and Gov. Jim Doyle, the funds areCE separate outstanding service to the Dane County community quarter housing statistics, and we had the opportunity to hand deliver current of the troubled economy. We REALTORS lucky challenges to have this option; in my from approximately $9.2 million the government is ® are and United Way. The Tocqueville Society Award the housing stats to every Wisconsinawarding congressional and staff the city member of Milwaukee, where the foreclosure travels aroundknow the country, see resources many REALTOR® celebrates and acknowledges people or families, that you I need that can help you person. on the Wisconsin housing rate is currently 9.9 percent. HUD is awarding the such as the Starks, who haveEach madeelected a majorofficial impactwas updated associations that don’t offer DLOD. proud close transactions, andWe youare need themtoatbe little or no including how through the tax creditfunds impacted usNeighborhood and why we need to via its Stabilization Program, on the quality of market, life in Dane County able to offer this cutting edge technology to get you FHA CE. Toolkit cost. NAR has just released an all-new keep the strong to forthe the remainder of thealmost year. $4 billion is being allocated to under which their exceptional service andmarket commitment online for FREE to the helpWisconsin you get clients the financing Moving on to the policy world, Legislature local and state governments for the redevelopment Billcommunity. Malkasian Speaking of housing statistics, I amofhappy to sayand that the Wisconsin abandoned foreclosed houses. recently wrapped its final session. Theenvironment. WRA workedIt is theyupneed in awork credit-strapped WRA President and MidwestReceives media coverage for the first quarter was excellent. We City Housing Authority hard on your one behalf, andmost I’m comprehensive happy to say we had NAR manyhas of the toolkits managed to get out an accurate description of Wisconsin’s housing Sites: Not Just for Personal 100-Unit Grant successes. Please be sure to read Tom Larson’s update on ® ever produced, and it’s available to all REALTORS market to every and the extensive coverage Milwaukee Journal Sentinel (09/25/08) Pabst,corner Georgiaof the state, Connections Anymore how we did. Also, look out for more detailed reports in the next right now by visiting the link below. They also have Minneapolis-St. Paul Business Journal (09/29/08) Grayson, reflected this. authority is due The city of Milwaukee’s housing few months. Katharine

launched a new page called “NAR Helps You Navigate to receive $6.7 million in federal Hope VI money Many people were understandably concerned about what would ® This is a particularly exciting time aswhere we gear falldozens elections. St. Paul, Minn.-based REALTOR Teresa Boardman the Current Economy” you up canfor find of to build 100 new housing units. The 100 units will happen after the tax credit expired,says and Flickr, the housing statistics helped Facebook and other social networking As Joe Murray’s article points out, many incumbents won’t return, be constructed in a 2.5-mile area and will include great products and resources, like the FHA Toolkit, concern. Certainly to be challenging times, sites make it easy to meet people who might 29 public housing ease and this affordable rental units;these continue so the state RPAC trustees will be working closely with local boards for free or at a steep discount. Visit www.Realtor. but allunits in all,for I feel comfortable saying that we become had a very positive eventually clients. Whilefirst many professionals nine affordable housing income-eligible to identify potential candidates who will look out for your best org/NARHelpsYou for links to these great programs quarter. Onpriced, this note, please let usare know what is happening in your using these sites to make businessinterests. contacts In short: families; and 62 moderately open-market while you are selling and listing this summer, the and accordingly. companies use conduct background so Steven we canC.update the press We them want to hear and products. condominiums. HUDmarkets Secretary Preston government affairs arm of the WRA and our local boards will be doing checks or recruit new workers, many simply want comments, “Milwaukee’s housing authority has your stories. our part for you. to connect with people who have similar interests. demonstrated it has the leadership to lead and Home Loans Going Strong, Albeit a Moving and on to transform this month’slives. magazine, we havetoseveral articles According Boardman, “Theabout hard sell isIndead. revitalize neighborhoods otherItnews,Bit we Tighter, are continuing our travels around the state to in Area your life.and I recognize real estate are challenging, worksales door-to-door, and it doesn’tconduct work onyoung REALTOR Cities like Milwaukeebalancing change and grow need to thatdoesn’t ® focus groups. Between now and the end Wisconsin State Journal (10/17/08) Balousek, Marv On Flickr, Boardman connected revitalize housing toand make sure many aren’t priced I want to encourage you all tosocial takenetworks.” the opportunity to refresh of June, we will visit Milwaukee, Racine, Appleton and Madison. As out.” Milwaukee is yourself one of aevery half-dozen with feature a fellow photographer who eventually used her now housing and then. Our article in particular Despite thegatherings ongoing national crisis,generation’s property you know, we hold these to get credit a younger authorities nationwide to receive new Hope VI story services purchase home. provides a compelling personal about to how to findaopportunity in perspective on changing needs and interests in the industry. I am professionals say mortgage money remains available grants. challenging times. Take away what you can. continuously impressed at how savvy and enthusiastic these folks throughout southern Wisconsin to home buyers Foreclosures Push Rents Higher,

are, and feel we cansolid learncredit. a lot from This ismanager particularly Housing StudyReturning Delay Frustrates Squeezing LowtheIncome to other issues, this month we highlight winnersFamilies of with Ron them. Steinhofer, of as we begin planning in June for our 2011 budget. Minnesota Public Radio (MN) Dan Advocates the 2010 Wisconsin REALTORS® Foundation scholarship for(09/21/08) children Olson,important Marshall & Ilsley Bank’s regional home lending Milwaukee Journal Sentinel (10/07/08)®Williams, Scott

of REALTORS . On a personal note,InI am continuallyTwin amazed at the Minnesota’s Cities, a wave In of closing, home I would group,like states, “There’s plenty of money home to announce our newly electedfor2011 Two years after promising Milwaukee metro we foreclosures has pushed the rental number the of qualified applicants receive for this award. more It is apeople real into WRA board of directors. voted inmore in May and to willqualify be loans out They there.were It is slightly difficult area’s first major housing study in threedown decades, sector. the The winners result ison an intensifying challenge to narrow the pool, apartment and I congratulate sworn in at thethan fall two convention. Iyears congratulate them on their or three ago, but if you have a good the Southeastern Wisconsin Regional Planning demand on Minneapolis and St. Paul’s rental housing their accomplishment. new roles with credit the WRA. Commission (SEWRPC) is still struggling to get the stock, so much so that the vacancy rate is very low score, a good job and a down payment, money effort launched. Proponents hope we theaddress study will rents this are on the rise. This, inanturn, means low- time,is available.” Steinhofer adds that banks still are In legal news, a range and of topics month, including Until next serve as a catalyst for improving housing income working face higher monthly rents article on titleaffordable exceptions and gap coverage; a peekfamilies into e-commerce making loans via such programs as Fannie Mae opportunities throughout the city’s even though theironincome hovers at unchanging and e-sign laws;suburbs. and a But Legal Hotline focusing timeshares. and Freddie Mac. Furthermore, credit standards commissioners haveHopefully yet to assemble an advisory levels. Since 2005, the Twin Cities apartment these articles will help shed some light on some complex committee to oversee the research or set a specific vacancy rate has dipped from 7 percent to closer to remain about the same as they were six months ago, issues. timetable for conducting the survey. Phil Evenson, 4 percent. Average monthly rents over that same meaning that qualified home buyers can get loans the commission’s executive director, said other issues time span are up more than $25, risingBill to more if they have the proper income verification. On the keep getting in the way. The delays have frustrated than $850. The St. Paul-based Wilder Foundation downside, banks have been less willing to make housing advocates WRA the most. Bethany Sanchez, recently reviewed income data for several Twin Cities Officers and Executive Committee: vice president of theChairman Metropolitan Milwaukee Fair counties. The organization’s research found that the loans with higher loan-to-value ratios. In addition, of the Board - John Horning, Shorewest REALTORS, Brookfield Housing Council, laments, “It’s been a long time numberKeefe of people those markets paying too much conventional financing without a down payment has Chairman of the Board-elect - Rob Keefe, RealinEstate, Lake Geneva coming.” The Pewaukee-based commission has for their rental housing will double from around Treasurer Renny Diedrich, Coldwell Banker The Real Estate Group, Greenville indeed disappeared. However, 100 percent financing not conducted a comprehensive review of housing 70,000 currently to a whopping 140,000 by 2010. is still available with Veterans Administration and patterns since the 1970s. Some say a partialREALTORS, solution would be for the U.S. Executive Committee VP - Beth Jaworski, Shorewest Wauwatosa government to reverse course on housing policy and Rural Development home loans. Executive Committee VP - Jerry Lyons, RE/MAX Shambeau & Lyons, Waupaca Executive Committee Director VP - Steve Lane, First Weber Group Northern Wisconsin, Stevens Point Executive Committee Director VP - Tim Stemper, Shelter Real Estate, Elm Grove

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wisconsin real estate magazine wisconsin real estate magazine

june 2010 october 2009

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Real Estate

Wisconsin Real Estate Magazine™ is published by the WISCONSIN REALTORS® ASSOCIATION. Trademark issued pursuant to Wisconsin state statute; federal trademark is pending.

notes from the wra

John Flor, ABR, CRS, e-PRO, GRI, RRS, Chairman johnflor@sixlakesrealty.com

2010 REALTOR® Children Scholarship Winners

John Horning, Chairman-Elect jphorning@shorewest.com

On April 22, 2010, the Scholarship Committee of the Wisconsin REALTORS® Foundation awarded its annual REALTOR® Children Scholarships. The scholarships are awarded on the basis of the individual’s scholastic achievement, leadership ability and service to his or her school and community. Eligible applicants must be children of REALTOR® members in active standing with the Wisconsin REALTORS® Association for the past three consecutive years prior to the scholarship application.

Robert Keefe, Treasurer rkeefe@keeferealestate.com William E. Malkasian, cae, President wem@wra.org

The ten recipients and their REALTOR® parents are: Brennan Abrahamson (Scott Abrahamson), Waukesha; Michael Drossler (Lori Drossler), Benton; Carly Gerlach (Kelly Gerlach), Hartland; Zachary Gregerson (Ruth Gregerson), Janesville; Morgan Johnson (Paula Johnson), Muskego; Frederik Karsten (John Karsten), Waupun; Katelyn Malcore (Bonnie Malcore), Brookfield; Alexandra Martin (Patrick Martin), Madison; Nicholas Schultz (Ruth Schultz), Madison; Emily Smoter (Mark Smoter), Manitowoc.

Editorial Staff:

William E. Malkasian Publisher

The Foundation congratulates these recipients and their parents, and wishes them the best in their future endeavors.

Robert Uhrina Managing Editor

Vanessa Merina

Long Distance Phone Service - Is It Time for a Change?

Publication Editor

Joe Leschisin

AMI Communications, Inc. is a full-service telecommmunications company that offers the long-distance service plan endorsed by the Wisconsin REALTORS® Association. All WRA members are eligible for the discounted long-distance plan they provide. Aside from the savings they offer, their focus on the customer is what truly sets them apart. If you would like them to review your current service arrangement and provide you with their recommendations, you can contact them at 1-800-254-3202. Ask for Brett McCullough. You can also reach Brett by email at bmvvullouhh@ami.net. Let AMI Communications, Inc. help you get the most out of your business with high-quality, cost-effective telecommunicaiton services backed by world-class customer service. Service is available for both your office and residence. www.ami.net

Senior 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.

NAR Updates Members on RPR™ Initiative

The REALTORS® Property Resource™ (RPR), a database that will eventually cover every property in the United States, will pull in data from public records, prior transactions, MLSs, transfer taxes, and other relevant sources. The RPR™ will provide access to a single-source national compilation of tax and assessment data; property data; neighborhood, school, demographic and psychographic information; and maps, trends and reports. It will be exclusive to members of NAR, and members of subscribing MLS/CIEs who are participants of the RPR.

4801 Forest Run Rd., Suite 201 Madison, WI, 53704-7337 (608) 241-2047 • (800) 279-1972 legal hotline: (608) 242-2296 • (800) 799-4468 general fax: (608) 241-2901 products/education fax: (608) 241-5168 legal hotline fax: (608) 242-2279

The RPR™ is not a national MLS, and will carry no offers of cooperation and compensation. It is designed to provide a single-source access for public record information for commercial, residential and vacant land such as tax assessments and comparable data, liens, zoning, permits, environmental, neighborhoods, school districts and community demographics. RPR is currently in beta, according to Dale Ross, RPR’s CEO, in 12 markets across the United States. The areas represented are evenly distributed geographically and have MLSs of various levels of size and sophistication, he added. The goal is to have RPR up and running for all REALTORS® by the end of next year, NAR CEO Dale Stinton said in a speech at the meetings. While the WRA is not directly involved with this program, your local MLS will receive direct correspondence on this initiative concerning its rollout.

facebook: www.facebook.com/wisconsinrealtors twitter: www.twitter.com/wirealtors linked-in: www.wra.org/linkedin youtube: www.wra.org/youtube

3 wisconsin real estate magazine

Learn more at http://blog.narrpr.com/

june 2010

REALTOR NEWSWIRE ®

Top News Stories in and Around the Industry

The 5 Fastest Ways REALTORS® Can Put Technology to Work Today

Thinking of Buying a Home? Prequalify

RISMedia (05/19/10)

REALTORS® in Wisconsin and elsewhere should urge prospective buyers to take a number of steps to ensure they can afford homeownership. One of the most obvious tips is for each buyer to check his/her credit report to gauge “credit-worthiness.” Carol Porath, a mortgage loan originator at State Bank Financial in La Crosse, recommends that consumers check their credit report at least once a year at annualcreditreport. com. The second step is to have the buyer meet with a mortgage lender to receive pre-qualification for purchasing a house. Porath notes that this involves discussing financials – i.e., income and debts. She adds, “It’s the first part of the process to make sure the buyers are comfortable. We simply try to determine how much they can afford.” The third step is for the buyer to receive a credit approval – a formal commitment in writing – for a mortgage from a lender. Porath says most clients she works with go through the pre-qualification process and then move right on to the credit approval. Most REALTORS® will recommend obtaining a credit approval before house hunting, according to Arlene Schwerzler, vice president of Merchant’s Bank of Winona. She states, “There is still money to be borrowed. The borrower now needs to be more financially sound than they were a few years ago.”

When the right technology is selected, it can automate everyday tasks for realty professionals and leave them free to focus on their core responsibilities. The best technology is the one that works best and can be implemented with relative speed. Real estate agents who want to quickly put technology to work for themselves can do so by adopting a paperless policy whereby all documents are consolidated on a virtual negotiation tablet and communicated to all parties in real time via e-mail. In terms of e-mail, meanwhile, experts say a free Hotmail account will take property practitioners only so far. Pony up for the cost of using a branded e-mail because, they say, it will be worth the money. Agents also should delve into social media sites like Twitter and Facebook, but they should stick to business material. Additionally, closing transactions online via e-signatures is a big technology movement for the real estate industry. Finally, experts recommend using the programs and applications that are available to help automate business where possible and to simplify/streamline the work process.

New standards simplify MLS data sharing REAL Trends and NAR (05/17/10)

Real estate data sharing on multiple-listing services is about to get easier, with the Real Estate Standards Organization’s approval of real estate property standard names. The standard names were introduced by the MLS Cooperative Venture (referred to as COVE, for short) in March during RESO’s General Assembly conference. RESO oversees the NATIONAL ASSOCIATION OF REALTORS®-supported Real Estate Transaction Standard, which defined an approach for exchanging listings with multiple listing services. The upcoming release of version 1.8 of RETS will include the approved standard names, which will benefit REALTORS® and the clients they serve, MLS operators, and the vendors who supply MLS technology. Standard names simplify the installation and operation of data feeds, a crucial part of conducting business for both brokers and agents. MLS technology vendors will also now be able to use a common vocabulary with the addition of standard names. RETS defines an approach for exchanging listings and provides a common language spoken by systems such as MLSs. RESO is an open standards community of real estate practitioners and technology vendors who volunteer their time and expertise to enhance the real estate transaction process with data standards.

La Crosse Tribune (WI) (05/18/10) Seidel, Kim

NAR’s Laurie Janik clarifies Health Care Bill’s housing implications REAL Trends (05/17/10)

There’s been some confusion about how the new health care bill may affect real estate and REAL Trends asked NAR’s Laurie Janik to explain how the real estate may be affected: First, there is no 4% “sales tax” or “transfer tax” on the sale of a home included in the health care bill. What was included in the health bill is a provision that imposes a new 3.8% Medicare tax for some high income households that have “net investment income.” Any revenue collected by the tax is dedicated to the Medicare hospital insurance program. This new tax would only apply to households with Adjusted Gross Income (AGI) of more than $200,000 for individuals or more than $250,000 for married couples. Since capital gains are included in the definition of net investment income, an additional tax obligation might result from the sale of real property. The calculations of how much tax is owed are complex. Keeping in mind that the new 3.8% Medicare tax is assessed only when the $200K/$250K AGI limits are exceeded, the amount of net investment income subject to tax is the lesser of (1) total net investment income or (2) the excess of AGI over the $200K/$250K AGI limits.

Since the calculation uses the “lesser of” the two amounts, the household’s wage income as a share of total income pays a key role in determining how much of any net investment income is subject to the tax. However, even when the AGI limits are met, the new tax would not be applied to all capital gains that result from the sale of a home since the existing home sale capital gains exclusion rule still applies. So if the gain from the sale of the primary residence is below $250,000 (individual)/$500,000 (couple) then no Medicare tax will have to be paid on the gain. The new Medicare tax would only apply to any home sale gain realized in excess of the $250K/$500K existing primary home exclusion that pushes the filer’s AGI over the $200K/$250K income limits. In the case of a second home, the calculations are different since there’s no exclusion that would reduce the amount of capital gain that would be included in the determination of the taxpayer’s “net investment income. The additional 3.8% tax would apply to the portion of the gain realized on the sale of a second home or investment property that brings the filer’s AGI over the $200K/$250K limit. The new Medicare tax will take effect January 1, 2013. Additionally, there is nothing in the bill that impacts the mortgage interest deduction.

Rural Areas See Growth as Housing Industry Eyes Turnaround Fond du Lac Reporter (05/16/10) Bliskey, Dorothy

Wisconsin’s rural areas are starting to see pockets of growth where new homes are concerned. One Fond du Lac area builder, Scott Swick of Winfield Homes, is among those reporting a rise in popularity of rural building sites. He states, “If recent lot sales are any indication, then it appears that approximately half want to live in the city and half in the country. This is a big increase in folks who want to live outside the city limits. Country subdivisions with larger lots and less municipal services are becoming more popular.” Area builder Ralph Gulig Construction has also noticed a move toward more rural areas as prime homebuilding spots. St. Peter, a small community in the northeast area of Fond du Lac County, is one such example. The builder’s Jackie Gulig states that what appeals to people who buy in St. Peter “are the lower taxes, limited restrictions on property usage, and the quiet rural atmosphere. They also want easy access to highways for commuting to jobs, shopping and entertainment.” Tom Heiberger of Christel & Heiberger Builders, a New Holstein homebuilder that constructs homes in Fond du Lac County and elsewhere, concurs. He notes the countryside between Fond du Lac and New Holstein is an area that more and more of his clientele are choosing for their new homes.

REALTOR® Newswire is a monthly news service prepared exclusively for the Wisconsin REALTORS® Association by Information, Inc. Reproduction, use, or inclusion of this material in other publications, products, services or Web sites is not allowed without prior written permission from the Wisconsin REALTORS® Association.

wisconsin real estate magazine

june 2010

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quarterly wisconsin housing report news

Strong Sales and Stable Prices For Wisconsin’s Housing Market State Outperforms the Nation and the Midwest in First Quarter By David E. Clark, Economist, C3 Statistical Solutions Inc.

WISCONSIN HOUSING STATISTICS QUARTERLY ACTIVITY - Q1 2010*

Region

Median Price Q1-2010 Q1-2009 % Change

Existing Home Sales Q1-2010 Q1-2009

% Change

Southeast South Central West Northeast Central North

$149,900 $154,900 $129,000 $122,500 $108,000 $97,000

3511 1838 1098 1669 604 757

12.6% 12.6% 32.1% 18.5% 12.9% 14.4%

$145,000 $160,000 $130,000 $118,400 $105,000 $95,700

6.8% -3.2% -0.8% 3.5% 2.9% 1.4%

010 started like 2009 ended for Wisconsin’s housing market, with strong sales and stable prices, according to first quarter data released by the Wisconsin REALTORS® Association (WRA). Sales of existing homes rose by 16.8 percent in the first three months of 2010 compared to the same quarter last year. This percentage outperforms the nation, which grew at 11.4 percent, and the broad Midwest region, which increased 10.8 percent over the period. Median prices were essential unchanged, increasing less than 0.1 percent.

played an important role in the strong first quarter numbers. “Mortgage rates are in the neighborhood of 5 percent, and while the state unemployment rate remains stubbornly high at 8.8 percent, we are finally beginning to add jobs,” Flor said. State unemployment figures show that after bottoming out in January, Wisconsin has gained more than 10,000 jobs. “While we have a long way to go to recoup the roughly 189,000 jobs that were lost between January 2007 and January of this year, at least we are moving in the right direction,” said Flor.

“This marks the third straight quarter of positive gains in home sales and the second straight quarter of double-digit growth,” said John Flor, Chairman of the WRA Board of Directors. According to Flor, extension of the federal home tax credit helped stimulate the Wisconsin market in the first quarter, but strong market fundamentals like low mortgage rates and improving unemployment numbers also

WRA President William Malkasian also pointed to data indicating the national economy is beginning to show some signs of life. “The so-called Great Recession has been long and deep, but we are hopefully now seeing the beginning of an upswing,” said Malkasian. Malkasian said broad indicators of business cycle activity are all pointed toward a recovery, including leading economic indicators, which precede

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movements in the national economy, as well as current economic indicators that mirror business activity at any given moment in time. “These indicators help feed consumer confidence which is perhaps the most important economic barometer of all,” said Malkasian. Malkasian, however, cautioned that solid job growth and continued improvement in consumer confidence were needed to sustain the recovery in the housing market now that the federal home tax credit has expired. “The market fundamentals are solid,” said Malkasian, “so we’re hopeful consumers will recognize the opportunities in this market and take advantage of the combination of low interest rates, reasonable prices and excellent inventories.” For more information, contact David E. Clark, Economist, C3 Statistical Solutions Inc. Office phone: 414-803-6537

reframing balance by Teena Cahill

I travel all over the world speaking to the men and women who work hard at their jobs, care about their families, and still find time to give to their communities and to this country. These people, like you, have the work ethic and the values that built America. Yet, as motivated and successful as they are, many of these people come up to me and say the same thing, “I need more balance in my life.” Or, “My life isn’t balanced.” I look at them and think, “Who started this myth? Where in the world did we get this ridiculous idea that anyone has a balanced life?” The better model is that of resilience. We were born tough, sort of “hardwired” with the ability to bounce back from adversity. In fact, psychologists have discovered that a few tough times can be a good thing. Most successful people have had adversity and learned to use their creativity and optimism to find a way out of tough times to better times.

wisconsin real estate magazine

june 2010

news.wra.org

Happiness comes from finding and using our strengths, having a passion for what we do and making a contribution to the communities that matter to us.

I’m a huge fan of opportunity and no fan of privilege. It turns out our self-esteem is built on learning how to solve problems and work out difficult situations. Privilege gives us a false sense of security, one based on some other person’s ability to solve problems. When we have multiple roles in our lives, many responsibilities, but a chance to prove ourselves—that’s when we learn, grow, build on mistakes and eventually develop the self-esteem and confidence needed to take some carefully calculated risks. And this is a helpful choice for success in any business…or any family. Cognitive Behavioral Psychology teaches us that our thoughts affect our feelings and our feelings affect our behaviors. This is a really big idea and one that can change our lives. When I believe I have somehow failed because I have not achieved at creating balance in my life—an impossible task—then I think I have failed. Failure makes me feel bad, affects my confidence and the next thing you know, I am not living up to my potential. But it all started with an unrealistic or negative thought, not by anything real! However, if I think I am resilient, that I am tough, that while I would like a few relaxing moments, I am certainly not going to have a perfectly calibrated day (or life, for that matter!) I feel good. Then I can give myself permission to go forward without the belief I have failed before I have even begun! This affects my potential too. This change in thinking affects my feelings and my more realistic feelings affect my mood. This is called a Cognitive Reframe, which means we choose our thoughts rather than just react to life. wisconsin real estate magazine

june 2010

I have learned I cannot control everything that happens in life, but I can make a choice as to how I respond. I cannot choose all of the events that happen in my life, but I can be defined by my positive response to those events, rather than by the events themselves. This cognitive strategy, sometimes called mindfulness, is one of the tools we can use to navigate through a changing world, yet stay true to our strengths and values. This is how we stay true to who we are and to our innate abilities. Times change, economies change, situations change, but empowered by our positive choices to these issues, including the choice to have realistic optimism, we can chart our course through troubled waters…whatever those waters might be. Martin Seligman is a psychologist at the University of Pennsylvania and one of the “fathers” of a field of study called Positive Psychology. This is where we do research to see what helps people have great lives, and which issues are correlated with happiness and satisfaction in our lives. Seligman wrote a great book called Learned Optimism in which he teaches us that a realistic but positive view of life is one that can take us far. Optimism can be learned and practiced daily by remembering things need not be perfect, that many of our greatest successes come from picking mistakes apart and looking for what we did right in these situations; building on the positives. Our strengths will take us far, and we need not be talented in every area. The study of happiness, for example, shows that happiness is not about having the most money or the biggest car. Happiness

comes from finding and using our strengths, having a passion for what we do and making a contribution to the communities that matter to us. The trick to increasing optimism and happiness is to look to see what is right, not what is wrong, in any situation. Build on those strengths and grow your business, life, or talents from what is right about you, right about the situation, right about your life, or right about your family. This is what optimists do. More importantly, this is what works if we are to find satisfaction, as well as success, in our lives. If I look around and see what is wrong with every person, every situation, even in today’s challenging economy, I can pretty much guarantee that I’ll believe I am in a horrible situation with no hope of success. However, I can change my life in thirty seconds (or a little more) just by changing my thinking. If I look at those same people and see what is right with them, not what is wrong, if I look at the same situations and see what is right within those situations instead of seeing the negatives, and if I look at today’s economy with an eye for positives and opportunity, not just negatives, then I can build on those strengths. I get new ideas from each step forward, and eventually I get myself and my business to a more satisfying place. But the joke is, nothing actually changed within the people or the situations, or even the economy. I planted the seeds for change just by changing my thinking. This does not mean you can just have a vision or a thought and find success! The secret is…there is no secret! But it does mean that our hard work, determination, tenacity and all of the other values that make for success are founded on the platform we create by choosing to see what is right in us, choosing to be realistically optimistic and find what is right in the situations that are presented to us, and in those situations we create. Forget balance. Build on your strengths.

wisconsin real estate magazine

Trust me when I say that many people find a way to survive, and even succeed, in the toughest times. This requires we be mindful about our thoughts and actions, seeing adversity as an opportunity for creativity.

website was posted, and this past year, I spoke to

I am writing this article to you today because I made this choice. Twenty years ago, my husband, a former Marine Corps fighter pilot and Captain with a large international airline, suffered a cerebral hemorrhage, stroke, then a spinal cord injury. He was given little to no chance of living. We had combined families, had only been married seven years and had six kids to educate when he was told he would never work again.

living in a country where I have the freedom to

At first, I sat by his bed seeing all that was wrong, grieving and crying. Then, after several hours, I rallied. I decided to change my thinking, plan on him living, and if he died I would deal with it then. This was not denial, it was hope. Hope is biological. When we have hope there are chemical reactions in our brain that help us feel better, more energized, and eventually able to take positive actions. Nature made us this way; we just have to use it. In my case, I had my husband flown to another hospital where they had hope too…and twenty years later, albeit with many challenges, we see what is right about our lives, with the two of us, and we are grateful.

while life and times can be tough, we are made to

It took me about ten years to stabilize the family and I did a great job. But, one day I was having a rough go, even though my husband and the kids were doing great. So, I made the decision to concentrate on me! I thought about my strengths and my passions. I thought about how grateful I was that my husband was alive, and I thought about how I could have new adventures in life. I thought about my strengths and what I love to do.

LLC, holds a doctorate in Psychology, a masters in

Within a short time, I felt hope creeping back into my life. Within a few weeks, Wisdom and Beyond LLC was born. Within a year, The Cahill Factor: Turning Adversity into Advantage was written, my

and The Florida Institute of Technology with stories

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people like you on three continents. Do not think this happened by magic. It happened with hard work, preparation, tenacity, determination and lots of joy and gratitude for change my situation in life. But this new success was started by my decision to change my thinking, to see what was right about me, about my unique talents, and about my situation in life. Then, my resilience—the innate power and toughness that is part of our biology—kicked in, and my life, and that of my family’s, was changed forever. Gratitude and appreciation are my guides, and I know that be tougher. That’s as good as it gets. But, it is pretty good, if you ask me. I want the same for you. This information is for educational and informational use only, and is not meant as a substitute for professional psychological or medical advice, diagnosis or treatment. Always seek the advice of a psychologist or other qualified mental health provider with any questions you may have regarding a mental problem or disorder or medical condition. Copyright Wisdom and Beyond, LLC © 2009, Princeton, NJ Dr. Teena Cahill, Director of Wisdom and Beyond Counseling and a bachelors in Education. She is an internationally acclaimed humorist and speaker, a former adjunct professor for undergraduate and graduate studies in the Behavioral Sciences, and has spoken for decades on issues of family living, mental health and wellness education. Cahill combines her textbook learning from The University of Utah, Nova Southeastern University from real-life living. She is author of The Cahill Factor: Turning Adversity into Advantage. Her website is www.teenacahill.com.

news.wra.org

Harnessing Your Power

Realtor® sales tip

By marcus wally

throughout the day to keep me focused and on track. No hopping around from task to task. Sometimes I even set specific hours to return emails and voicemails. At the end of the day, it is all about what you accomplished in full…not half-started tasks.

The subject of time management is always of interest. As we try to balance our minds and bodies, we must learn to find that spot where we have just the right amount of work time, the proper amount of exercise time and the dedicated time for family and loved ones.

Operating a top-of-the-line “contact management” system is critical to creating efficiency in the real estate business. Most systems have not only your calendar but also your contacts, which makes it easy to reach out and touch your sphere. Your success is directly proportional to your ability to initiate new contacts and generate referrals from existing and past contacts. It’s all about PROSPECTING! The real estate business is built on the theory of referrals…I like to say, referrals are the life blood of our industry.

This month’s Sales Tip will try to help you harness your power to find those correct settings. A favorite saying that applies is, “Time is the coin of your life; don’t let others spend it.” To further emphasize this truth, I believe that we must understand that priority-setting is the premier time management component. We must learn how to capitalize on our peak performance time. Are you a morning, afternoon, or evening person? What time of day do you feel and act your best? When do you feel most productive? I’m an early bird; are you a night owl?

Since so many of us work out of a mobile office, having a “business-ready tool kit” is the way to go. I have pre-made listing and selling file folders, marketing folders, sign riders, lock boxes, etc., all ready to go on the fly. Preparation is fundamental to success. In fact, many times what separates truly successful achievers from simply good achievers is the amount of preparation put into a situation.

Once we start setting our priorities, we will see an immediate increase in our production level. Creating concrete goals and objectives for your life and career will help you in setting your priorities, which yield a framework for effective time management through balance. To do this correctly, you must assess and determine what is truly important in every aspect of your business and personal life. Having these answers will also help you formulate your mission statement, which begs the question: ”Why are you in business?”

One way to create efficiency is to partner with others who possess skills that you don’t. Hire a personal assistant or consider teaming up in order to cover more daily ground. Learn the art of delegation, as we cannot be everything to all people. As long as the task gets accomplished, the outcome is about the same. So let go and allow others to help you become more efficient!

We often hear people tell us, “Find a job you like and you will never work another day in your life,” also known as concentrating on your passions and talents. Do what you enjoy doing and this will take you to the moon.

A final objective is to use time management techniques for life management results. With that being said, I schedule everything. I live my life off my professional calendar and don’t make a move without consulting the “good book.”

In order to be time-management conscious, we must learn to say NO. A friend of mine told me once that NO is a complete sentence! No need to add a but! With that, I will encourage you to eliminate or minimize activity that you do because others guilt you into it.

Begin by thinking about the year. Using permanent ink, write down all major items and milestones. These events are school and family vacations, birthdays, anniversaries and even periodic long weekends. Ink in all business meetings, conventions and conferences.

As the old saying goes, Time is your most valuable asset.

Then drop down to the months and weeks—I call these secondary items—days off, showings, listing appointments, CMA’s, education courses, floor/ opportunity time, counseling sessions, open houses, etc.

Learning to identify tools that improve efficiency is another area we must master. What type of business systems are you currently using to create efficiency? Each morning, I make a “to do” list that I work down wisconsin real estate magazine

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Finally, schedule tasks for the day. These are minor items such as errands, programming some time for a buffer around the major appointments and always allowing extra time for unanticipated circumstances. These are now business appointments. Schedule everything, including your child’s ball game! You might be familiar with the demonstration of the glass jar with the rocks and sand. I call this the “Load your Big Rocks first” exercise. This demonstration proves the point that when you put your big rocks in the jar first, there is always room to drop in some smaller rocks and even some pebbles. And, of course, we can always pour in a little sand to fill the gaps. The large container used in this demonstration is your obligations in life. Our big rocks are our priority items in life. These events require blocks of time and should be in your calendar as far in advance as possible. These are MUST-HAPPEN EVENTS! Pebbles are secondary items that are added and surround the priority items in your calendar. Remember, time can’t be saved; it can only be spent. Once gone, it cannot be replaced. Set peace of mind as your highest goal. Organize your time and life around it. When you are with your family, devote 100% of your attention to them. Remember, quantity of family time, quality of work! 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 marcuswally@ comcast.net.

legal

best of the legal hotline

with tracy rucka

The following questions were asked recently about timeshares.

Timeshare Registration/Real Estate Licensees The licensed real estate salesperson is employed by a real estate broker. Does the agent need to register as a timeshare salesperson in order to provide brokerage services relating to the listing, sale or purchase of timeshares in Wisconsin? Is it good to seek out timeshare salespersons to assist with transactions if the agent is uncomfortable acting alone? A timeshare salesperson is an individual, other than a person licensed as a real estate broker or salesperson, who is employed by a licensed broker to sell, offer or attempt to negotiate the initial sale or purchase of a timeshare or campground space. A timeshare salesperson may not perform any other brokerage acts under Wis. Stat. Chapter 452. A licensed salesperson employed by a broker already has the authority to provide normal brokerage services with respect to timeshares in Wisconsin without any further registration or designation. The standards for competent practice in Wis. Admin. Code § RL 24.03(2) require a salesperson to seek assistance from another professional with timeshare experience if the salesperson is uncomfortable with timeshare sales, so getting help from a timeshare salesperson is a good idea. An owner of a timeshare asked the agent about finding someone to sell his timeshare in Wisconsin Dells. The owner tried an online service where you pay up front and lost money. Can the agent list the timeshare? Are there approved forms for timeshare sales? The agent should first determine if the seller has the timeshare currently listed. If the seller has already entered into an exclusive right to sell listing for their timeshare, the best action may be to encourage the seller to contact an attorney. If not already listed, the agent may list the timeshare using the WB-8

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Timeshare Listing Contract. The broker may review the MLS rules to determine if the MLS includes a timeshare category for listings. Under Wis. Stat., licensees can only use timeshare listing purchase contracts approved by the Department of Regulation and Licensing containing certain elements specified in the statutes. Currently there is one listing contract, the WB-8 Timeshare Listing, and two timeshare contracts, the WB-26 Timeshare Contract (Sale by Developer) and the WB-27 Timeshare Contract (Resale by Non-Developer), approved by the Department of Regulation and Licensing for the sale of the timeshares. See the March 2002 Legal Update, “Timeshare Transactions” at www. wra.org/LU0203 for more information about timeshare sales. The timeshare owner has had problems with the timeshare manager. The manager will not return calls and has deducted funds from the owner’s accounts for maintenance fees, etc. A real estate licensee may not provide consumers with legal advice. There are attorneys who specialize in timeshare sales and issues relating to the management of timeshares. Legal counsel may review the timeshare documents with the owner to determine whether the fees that were deducted were authorized. The State Bar provides consumers the ability to search for attorneys in their specialized fields. Visit www. legalexplorer.com/lawyer/lawyer-talk.asp. Is a seller required to provide a Real Estate Condition Report (RECR) for a timeshare? Wis. Stat. § 709.01 requires all persons who transfer real property located in this state, including a condominium unit and timeshare property, to complete a RECR. In the WB-8 Timeshare Listing Contract, the seller agrees to complete the RECR provided by the listing broker to the best of the seller’s ability. news.wra.org

Out-of-State Sales A broker has a friend with a timeshare in Florida. Can the broker list and sell it? Wisconsin licensees can list and sell timeshare property in Wisconsin, but it becomes a bit trickier when the property is located outside of Wisconsin. It has been the understanding of the WRA that a Wisconsin real estate license permits an individual to negotiate with another for a commission, money or other thing of value, the sale, purchase, rental or exchange of an interest in real estate. According to the National Association of REALTORS®, Wisconsin, Florida and 22 other states are classified as physical location states. That means, for example, that a licensee from another state may work on a transaction involving property in Wisconsin and receive commission as long as the licensee remains physically in the state where he or she is licensed. The licensee from another state may not visit the property in Wisconsin or negotiate face-to-face in Wisconsin. Each state’s laws control the real estate license activities that occur within that state. To determine exactly what is permitted in a transaction involving a property located in another state requires an analysis of those laws. NAR’s report regarding license portability can be reviewed (see www.realtor.org/rmomag.NSF/pages/ lawjuly05?OpenDocument). The broker would be best served if his or her attorney reviewed real estate license law in the other state(s) and determined if the Wisconsin licensee’s participation in the contemplated transaction would be allowed under that state’s law. If permitted under the state’s law, all of the Wisconsin licensee’s work in negotiating the sale must be conducted in Wisconsin. Out-of-state work (for example, showings) must be conducted by a state licensee if the broker is not also licensed in the other state. Information about Florida timeshare sales is available at www.myfloridalicense.com/ dbpr/lsc/LSCMHTimeshareFAQResales.html. A recent unpublished Wisconsin Court of Appeals District IV decision has indicated that one would have to be licensed in the state where the property is located to engage in a transaction for the sale of the property (at least as it relates to Wisconsin and Iowa, the states that were involved in the case). The Court noted that the Iowa law that the parties presented to the Court did not relieve a broker working in a transaction for the purchase of an Iowa property from needing to have an Iowa real estate license, even if the Wisconsin broker’s actions might be allowed under Wisconsin law. To read more about the case, see Restaino Bunbury & Associates, Inc. v. Assisted Living Concepts, Inc. (Ct. App. No. 2008AP2334, 2009) online at www.wisbar.org/res/ capp/2009/2008ap002334.htm.

Timeshare Licenses What is the difference between a timeshare unit and a timeshare license? In 2007 the Wisconsin Legislature modified Wis. Stat. Ch. 707 to

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allow the creation and sale of timeshare licenses. A “timeshare license” is defined as a right to occupy a unit or any of several units under a license or lease agreement during at least four separated periods over at least four years, including renewal options, not coupled with an interest in property.

Fractional Ownership A seller has approached the broker and wants to sell his fractional interest in a resort property. Can the broker list and sell this interest? There are many faces to fractional ownership: ownership by tenants in common, tenancy-in-common (TIC) and stock ownership in a corporation that owns real estate, to name a few. Before a real estate licensee provides real estate brokerage services to sell the owner’s interest it must be determined what is being sold: an actual interest in real property, stock in a corporation or some other type of interest. When two or more individuals want to purchase property together they may take title to real estate as tenants in common. An individual may sell his or her ownership interest in the property. Before listing such an interest the broker may have the seller consult with legal counsel to produce any operating agreements or buy/sell conditions that the owners may have executed with respect to the property. When marketing such an interest, the broker must clearly disclose that only the interest of one tenant-in-common is being sold. A TIC is another, more formal, form of undivided fractional interest in a property. In the past decade or so, this form of ownership has been used in new and different ways, resulting in different considerations and cautions for REALTORS® working with a TIC. Some TICs are residential and may be sold by licensees, while other investment or commercial TICs are classified as securities, not real estate interests, and are regulated by the U.S. Securities and Exchange Commission (SEC). While a real estate license allows the licensee to act as a real estate broker or salesperson, it does not necessarily entitle the licensee to negotiate the sale of an incorporated business where the transfer is to be made by transfer of the controlling stock. The sale of stock is normally a securities transaction and may require a securities brokerdealer’s license. Due to recent changes to the Wisconsin Uniform Securities Law, there no longer is statutory exemption from securities broker-dealer registration for real estate brokers whose securities transactions are isolated transactions incidental to their real estate business. More information about ownership and title issues are available in the June 2007 Legal Update, “Ownership and Title Pointers for Brokers” at www.wra.org/LU07.07. Tracy Rucka is Director of Professional Standards and Practices for the WRA.

legal

Behind the Curtain: E-Commerce and E-Sign Exposed By cori lamont

Since the WB-11 Residential Offer to Purchase became mandatory March 1, 2010, we have received numerous questions about e-mail delivery. The following is an attempt to provide you with a peek behind the curtain of the E-Commerce and E-Sign laws. Essentially, this is an effort to strip down the process to its basic core by providing the most frequently asked questions relating to e-mail delivery. What is the difference between E-Commerce and E-sign? E-Commerce is the Wisconsin law addressing electronic commerce.

D. Select and open the Word document “Consent for Use of Electronic Documents and Signatures in Consumer Real Estate Transactions.”

E-Sign is the federal law addressing electronic commerce requiring consumer electronic consent.

E. Save this document to your computer (customize it later with your company and contact information).

What transactions need to meet E-Commerce and E-Sign requirements?

When it’s time to send it to the consumer, take the following steps:

Consumer transactions. Consumer transactions typically involve individuals buying or selling residential properties because they will be using the property or the proceeds for personal, family or household purposes. Transactions that are strictly commercial or involve two businesses as parties are not consumer transactions.

Compose the e-mail and in the body of the e-mail where you type your message, copy and paste the contents of the Word document you saved.

Send the e-mail to the party.

What does an agent need to do to meet these requirements?

The party should read the disclosure information. The consent the WRA created automatically embeds or attaches a Word and PDF document. These are generic and do not relate to the transaction. The consumer needs to make sure they can open up each.

Presuming the party wishes to authorize electronic documents and e-mail delivery for the transaction, the party clicks “Reply.”

The consumer then types in the party’s name (as the party’s electronic signature) and e-mail address.

The consumer clicks “Send” to return the e-mail to the agent. You have electronic consent.

In simple terms, two steps must be performed: Step 1. Electronic consent Step 2. Inclusion of e-mail delivery language in the contract used Step 1) Accomplish electronic consent (the easy way) A. Send an e-mail because the party must provide consent electronically to the use of e-mail and electronic documents and signatures in the transaction. B. Go to www.wra.org/ecommerce. C. Go to the third bullet 2008 Forms for Electronic Commerce NEW!

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news.wra.org

Step 2) Include e-mail delivery language in the contract A. WB-11 Residential Offer to Purchase - check the E-mail Delivery box. B. Other offer to purchase forms, listing contracts and buyer agency agreements: 1.

Execute the WRA Addendum D and attach and incorporate into the contract; or

Insert delivery language in the additional provisions. Provided below is sample language; the line references would vary depending on the contract used. In addition to the methods of delivery authorized on lines XXX-XXX of this [Offer, Listing, Buyer Agency], delivery of documents and written notices to a party shall be also effective when accomplished by: E-mail: electronically transmitting the document or written notice to the party’s e-mail address given below. If this is a consumer transaction where the property being sold is used primarily for personal, family or household purposes, each consumer stating an e-mail address below has first consented electronically to the use of electronic documents, e-mail delivery and electronic signatures in the transaction, as required by federal law. For Offer

“Electronic signatures” are sometimes hard to conceptualize. An “electronic signature” includes any mark, symbol, sound or process that is written, stamped, engraved, attached to or logically associated with an electronic document and executed by a person with the intent to sign. Just like you can legally “sign” a printed document by making your mark, whether that be your cursive signature in ink or an “X,” so you can “sign” an electronic document by making your mark, whether that be a high-tech encrypted or digital signature or just typing your name in the signature line or space on an e-mail or document on the computer – these are all electronic signatures. If you sign a paper document in ink and then scan the document and save it on your computer, the image of the cursive signature on the stored electronic document on your computer is also an electronic signature. 1.

Right to Receive Paper Document: You have the right to have any document provided in paper form. If you want a paper copy of any document sent to you by e-mail, send your request to the broker at the mail or e-mail address provided below. Paper copies will be provided at no charge.

Right to Withdraw Consent. You have the right to withdraw your consent to receive electronic documents by e-mail by contacting the broker by mail or e-mail at the address provided below. The legal validity and enforceability of the electronic documents, signatures and deliveries used prior to withdrawal of consent will not be affected.

Changes to Your E-mail Address. You should keep the broker informed of any change in your electronic or e-mailing address. Please contact the broker as promptly as possible by mail or e-mail at the address provided below regarding any such changes.

Minimum Hardware and Software Requirements. The following hardware and software are required to access (open and read) and retain (save) the electronic documents:

E-mail address for Seller: ___________________________ E-mail address for Buyer: ___________________________ For Listing E-mail address for Seller: ___________________________ E-mail address for Broker/Firm: _____________________

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Operating Systems: Windows 98, Windows 2000, Windows XP or Windows Vista; or Macintosh OS 8.1 or higher

E-mail address for Buyer: ___________________________

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Browsers: Internet Explorer 5.01 or above or equivalent

E-mail address for Broker/Firm: _____________________

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Software/Electronic Document Formats: Adobe Acrobat Reader or equivalent for PDF files; Word program for Word files

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Sample Files (make sure you can open and save):

For Buyer Agency

What does the WRA electronic consent Word version look like? CONSENT FOR USE OF ELECTRONIC DOCUMENTS AND SIGNATURES IN CONSUMER REAL ESTATE TRANSACTIONS If you want the option of sending and receiving real estate transaction documents by e-mail, federal law requires certain safeguards to ensure that consumers like you have the capability to receive such disclosures and are fully aware of the consequences of agreeing to receive documents electronically. Federal law requires your consent to use e-mail and electronic versions of information, disclosures, contracts and other documents and records (“electronic documents”) that would otherwise be legally effective only if provided to you in a printed/ written paper document. Understanding Electronic “Lingo:” “Electronic documents” include the documents you may save on your computer or attach to e-mail. They can typically be printed out, but exist independently in an electronic form on your computer. wisconsin real estate magazine

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Microsoft Word

PDF

Your Ability to Access Disclosures. By completing and e-mailing this consent to the broker, you acknowledge that you can access and retain the electronic documents in Sample Files above.

Consent to Electronic Signatures and Documents: By completing and e-mailing this consent form to the broker at the e-mail address specified below you are providing electronic consent to the use of electronic documents and signatures in your real estate transaction. Specifically, you are acknowledging receipt

of this form and consenting to the use of electronic documents, e-mail delivery of documents, and electronic signatures in any real estate transactions involving you, the broker identified below and other parties. If you prefer instead to limit this consent to the transaction relative to a specific property, provide the property address or description below. Specific Property: CONTACT INFORMATION: Broker Name: Agent Name (optional): Address: E-mail Address:

If the agent’s e-mail address is included, does the agent still need electronic consent from the consumer?

Is it electronic consent if a consumer prints off the consent, signs it and faxes it back?

Yes. The federal law is concerned about the protection of consumers purchasing property primarily for personal, family or household purposes, so much so that the law requires the consumer consent electronically to the use of electronic documents, e-mail delivery, and electronic signatures in the transaction. Because there is not any state or federal case law regarding this issue, the WRA responds with a conservative position to enable agents to forward documents received to the parties via e-mail.

No. The electronic consent must be obtained electronically. A consumer signing a hard copy or faxing back the document would not be sufficient.

How do agents incorporate e-mail delivery into the listing and buyer agency agreements?

Isn’t the Addendum D the electronic consent?

Each agent would be required to achieve the two steps: 1) Electronic consent; 2) Inclusion of e-mail delivery language, either by incorporating Addendum D or inserting language into the additional provisions of the form. Remember that when a buyer writes an offer, the contract still needs to include e-mail delivery language between buyer and seller.

Party Signature (sign or type in name): E-mail Address:

No. Addendum D includes e-mail delivery language to be included in a contract, not the electronic consent.

Does electronic consent only need to be done once or with every contract? Only once. If the listing agent did electronic consent at the time of listing, then the seller is not required to do it again even if the offer includes e-mail delivery.

Is Addendum D needed with the revised WB-11 Residential Offer to Purchase? No. However, licensees are still required to obtain electronic consent before including an e-mail address. Lines 48-49 of the WB-11 provide: “[E]ach consumer providing an e-mail address below has first consented electronically to the use of electronic documents, e-mail delivery and electronic signatures in the transaction…”

What if the e-mail delivery box is checked in the WB-11 Residential Offer to Purchase, but there was no electronic consent? Any real estate licensee drafting an offer for a consumer who includes an e-mail address at line 52 or 55 is affirmatively stating or representing that the consumer has previously provided electronic consent. A party who signs an offer that includes his or her e-mail address is also affirmatively stating and representing that he or she has provided proper electronic consent and is committing fraud if this is not true. It is arguably incompetent practice to include an e-mail address without first obtaining the consumer’s electronic consent.

Which e-mail address should be included in the offer: the agent’s or consumer’s? Either. The offer is drafted to accomplish the intent of the party. However if your party does not object, then the agent’s e-mail address may be inserted. This is most easily explained if you compare the e-mail

address to the fax number used as Delivery in the offer. Most often the parties do not use their own fax numbers or mailing addresses, but use those of the parties’ respective agent. If the parties include their respective e-mail addresses, then keep in mind that each side would have the other’s e-mail address. This could create the opportunity for the buyer and seller to contact one other, which is legally permissible, but may create unnecessary drama.

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Does an agent working with a buyer-customer still need to get the buyer’s electronic consent? Yes, address the consent at the same time as the Broker Disclosure to Customer form.

Must the listing broker request proof of electronic consent from the cooperating broker? No. The listing company may find it beneficial to confirm on behalf of the seller that the buyer electronically consented to e-mail as a form of delivery and the use of electronic signatures. If the transaction involves a buyer-customer, the listing company may wish to request proof since the agent is drafting the offer as a subagent of the listing company. When it involves a buyer-client, the buyer’s agent would not be obligated to provide any proof. Resources •

WRA E-Commerce Resource Page at www.wra.org/ecommerce.

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Wisconsin Real Estate Magazine Articles: May 2008, “E-Mail Delivery: Working with Consumer Consents to Deliver Electronic Documents,” at http://news.wra.org/story.asp?a=922 and November 2008, “Best of the Legal Hotline Electronic Delivery,” at http://news.wra.org/story.asp?a=1005

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Legal Updates: September 2004, “Electronic Commerce Law,” at www.wra.org/LU0409; February 2008, “Electronic Commerce and E-Mail Delivery,” at www.wra.org/LU0802 November 2009, “WB11 Residential Offer to Purchase – 2010 Edition at www.wra.org/ LU0911.

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

Title Exceptions and Gap Coverage

legal

By debbi conrad

Most real estate purchasers assume when they receive a title insurance commitment that the title company has searched the public records and listed any liens and encumbrances of record. They may believe that any title problems will be resolved at closing and that they will receive a “clean title.” After all, title insurance is supposed to protect against title issues that arose before the buyer’s purchase. Unfortunately, these assumptions may be put to the test when it comes to any title commitment exceptions made for (a) the gap period and (b) recorded covenants, restrictions, easements and mineral rights. The subject of title insurance – with all of that boilerplate language and fine print – often cause buyers’ eyes to roll back in their heads and even some licensees have been observed with that glassy-eyed look when the topic is discussed. A brief review of Title Insurance 101 is in order.

Title Insurance 101 The title insurance company checks the various public records and issues a title insurance commitment that gives information about the title to the property prior to the contemplated real estate transaction. The title commitment indicates who currently owns the property and lists any liens such as a mortgage or unpaid tax bills that the seller should pay off before selling, and any easements and restrictions that will affect future use of the property. Schedule A. The basic blueprint for an owner’s policy title commitment starts with Schedule A, which indicates (1) the effective date (the “as of” date of the search), (2) the proposed insured (the buyers), (3) the amount of the insurance (usually the purchase price), (4) the title holders of record (typically, but not always, the sellers) and (5) the legal description of the property. Schedule B-I. Schedule B-I is the road map for the documents and signatures that will be required at closing if the title insurance policy is to be issued. Typical requirements include payment of the title insurance policy premiums, the execution and recording of the buyer’s deed and mortgage, payment and release of existing mortgages, and satisfaction of tax liens, judgment liens, etc. Schedule B-II. It is standard practice for Schedule B-II of the title commitment to list exceptions that will be excluded from coverage in the buyer’s title insurance policy. Owner’s policies often contain exceptions for: (1) the gap period; (2) taxes and assessments; (3) construction liens; (4) parties in possession (e.g., tenants or unrecorded land contract buyers); (5) easements or claims of easements not shown in the public records (through adverse possession, etc.); (6) mineral and/or water rights; and (7) encroachments and boundary line disputes. Many of these exceptions, like for parties in possession, encroachments or easements not of record, are

wisconsin real estate magazine

june 2010

understandable because these items cannot be discerned based solely upon examination of the public records. If an exception is unacceptable to the buyer, the buyer and the buyer’s attorney may be able to convince the title company to remove it, insure over it (with an endorsement) or eliminate the exception by obtaining a special assessment letter, owner’s affidavit, survey map or other document. The buyer may have the option of paying an additional fee to obtain “extended coverage” that will remove some exceptions. One classic example of this is illustrated in First American Title Insurance Company v. Dahlmann, 2006 WI 65. The survey and encroachment exceptions had been removed from the policy when Dahlmann purchased the Madison Inn in January 1999. In this case, the Wisconsin Supreme Court held that a substantial encroachment onto the adjacent property was covered by Dahlmann’s title insurance policy, which wouldn’t have happened if those exceptions had not been removed. To read more about this case, see pages 9-10 of the March 2007 Legal Update at www.wra.org/ LU0703.

Cutting the Title Search Short The Schedule B-II exceptions found in most title commitments are standard fare, but there is an unusual exception that has appeared recently in some title commitments in Wisconsin that can cause serious problems for the seller and the buyer. Instead of excepting easements and other items that are not of record, this exception provides an exception for “Covenants, conditions and restrictions, if any, affecting title which appear in the public records; easements, if any, which appear in the public records or are shown on any recorded plat or certified survey map; reservations of mineral rights or mineral rights, if any, appearing in the public land records (‘Recorded Covenants Exception’).”

While most people believe it is the job of the title company to search the public records for liens and encumbrances that negatively impact title to the property the buyer is purchasing, this Recorded Covenants Exception essentially says that the title company will not provide coverage for recorded covenants, restrictions, easements and mineral rights. In an effort to reduce costs, the title company apparently is not conducting a full search of the records. The company searches far enough back to find the current deed, mortgages and liens but does not attempt to look for easements, restrictions, etc. farther back in the record. These reduced costs may be passed to the party paying for the owner’s title insurance policy – in Wisconsin that is typically the seller. Other times the title company may be using the reduced costs to generate company profits. In the WB-11 Residential Offer to Purchase, lines 342-343 indicate that the seller will provide an owner’s policy of title insurance in the amount of the purchase price. The Provision of Merchantable Title subsection on lines 351-355 of the WB-11 indicates that the title commitment delivered to the buyer must show merchantable title “subject only to liens which will be paid out of the proceeds of closing and standard title insurance requirements and exceptions, as appropriate.” It would seem that the Recorded Covenants Exception (or similar language) is not a standard title insurance exception and that it is difficult to prove or disprove merchantable title with a limited records search. Thus, if a seller provides a title insurance commitment that has the Recorded Covenants Exception, the seller is apparently providing a commitment that is not acceptable for closing. In the Title Not Acceptable for Closing subsection on lines 356-362 of the WB-11, the buyer can object to the seller in writing and the seller has 15 days to correct the situation and get the Recorded Covenants Exception removed. If this is not done, the seller is at risk of losing the sale. From the buyer’s perspective, if Recorded Covenants Exception language is not detected and the buyer closes, the buyer may sue once he discovers, for example, that he cannot make anticipated improvements to the property because they impede a recorded easement. •

REALTOR® Practice Tip: If an agent in a transaction becomes aware that the title commitment contains Recorded Covenants Exception language, the agent should point out the language and recommend that the party immediately discuss the exception with his or her attorney or the title company. CAUTION: Agents should not attempt to provide legal advice. Just point out that there may be a problem and send the party to an appropriate expert for evaluation!

Filling the Gap The gap exception puts the buyer at risk for any title defects which appear of record after the effective date of the title insurance commitment and before the buyer’s deed is recorded, i.e., the “gap period.” Some of the title defects that may appear of record during the gap period include mortgages, deeds to third parties; lis pendens filings for foreclosures or other litigation, construction liens, federal tax liens and judgments. The actual risk to the buyer of an intervening lien may be greater in short sales or with REO properties. Lines 346-350 of the WB-11 require the seller to provide a gap endorsement “provided the title company will issue the endorsement,”

wisconsin real estate magazine

june 2010

or equivalent gap coverage. If a gap endorsement or equivalent gap coverage is not available, the buyer may give written notice to trigger the Title Not Acceptable for Closing subsection on lines 356-362. While the intent of this provision is more to cause the parties to reach a mutually agreeable solution than to cause the offer to become null and void, that can be the result. This is a serious issue for the buyer and intervening liens can be very expensive for all involved. Whether a particular title company will provide a gap endorsement in a particular transaction or for particular types of closings, e.g., short sales and REO sales, is basically a business decision. The title company evaluates the potential risk, the circumstances of the parties, the purchase price involved and other factors and decides whether to provide gap endorsements. The title company cannot know any better than anyone else what might pop up on title before the new deed and mortgage are recorded. They decide which risk they are comfortable insuring. •

REALTOR® Practice Tip: Prudent agents may wish to become familiar with which title companies in their market areas do not provide gap endorsements in certain types of transactions. It may be wise to learn which gap coverage alternatives are offered by other title companies or attorneys to ensure the highest level of protection possible for buyers.

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

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Register one WRA member for one full convention pass at regular price and register a second WRA member at a special introductory price. (see details at www.wra.org/convention2010fees) Your second guest must be a member of the WRA who has NEVER attended the Fall Convention or has NOT attended in the past five years. Limit one discounted registration per order. Register using this form or by visiting www.wra.org/convention2010reg. After you have registered you will receive a promotion code. Give this promotion code to a WRA member and tell that member to visit the Web site to register and redeem the discounted pricing.

Two-FER: 2nd WRA Member INFORMATION: Name___________________________________________ Firm Name_______________________________________ Address__________________________________________ City ______________________ State _____ Zip ________ Phone (W) (

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 1-Day Pass ( Sun/Mon/Tues ) circle one  Full Convention Pass Real Estate Continuing Education

$ 114 $ 154 Thru 7-31

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$ 134 $ 154 $ 174 $ 194

• Access to Indoor Theme Park following Chairman’s Dinner - 9/27

Thru 8-23 After 8-23 ATD

 Intro to CCIM 9/26-9/27 w/conv  ABR Elective – Short Sales & Forecl. 9/26 w/conv  CRS 111 – Short Sales & Foreclosures 9/27 w/conv  ABR & CRS – Short Sales & Forcl. 9/26-9/27 w/conv  Ninja – Part 1 – 9/26  Ninja – Part 2 – 9/27  Ninja Part 1 & 2 – 9/26-9/27 w/conv Appraisal CE Courses - 9/28 WRA Appraisal Section Member  Class Only  Class w/ Convention

$ 330 $ 169 $ 169 $ 229 $ 185 $ 185 $ 330

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Thru 8-23 After 8-23 ATD

$ 340 $ 179 $ 179 $ 239 $ 195 $ 195 $ 340

$ 350 $ 189 $ 189 $ 249 $ 205 $ 205 $ 350

$ 370 $ 209 $ 209 $ 269 $ 225 $ 225 $ 370

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Room Rates Standard Room: $119 Jacuzzi Suite: $119 Royal African Queen Suite: $119 Release Date: August 25, 2010

• Real Estate Continuing Education – Four of Six courses included in Full Convention Pass - MUST register in advance - first come, first served!

CE - Attend All 6 (4 FREE – You pay for 2) $15 per $20 per $25 per $45 per (You may select up to FOUR courses for free included in a Full Convention Pass; each additional course pricing above.  Elective B – 1031 Exchanges & Exchange Opp. 8:30 – 12:00 (9/26)  Course 1 – Listing Contracts – 8:30 – 12:00 (9/27)  Elective E – Financing the Sale – 1:00 – 4:30 (9/26)  Course 2 – Offer to Purchase – 1:00 – 4:30 (9/27)  Course 3 – New Developments – 8:30 – 12:00 (9/28)  Course 4 – Buyer Agency Agreements – 1:00 – 4:30 (9/28) Designation Classes

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$ 124 $ 164

Hotel information:

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Event Fee – Per Person: Golf (9/26) ��$98 Wild Rock Golf Club - Wisconsin Dells  Member One  Member Two Chairman of the Board’s Dinner (9/27) ��$49  Member One  Member Two

 2 WRA Member* .....$ 276  2nd WRA Member* .....$ 115  2nd WRA Member* .....$ 115  2nd WRA Member* .....$ 175

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 2nd WRA Member* .....$ 276

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$ 134 $ 144

$ 144 $ 154

$ 154 $ 174 $ 164 $ 184

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WRA REALTOR Member  Class Only  Class w/ Convention

$ 144 $ 154

$ 154 $ 164

$ 164 $ 184 $ 174 $ 194

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Non-Member  Class Only  Class w/ Convention

$ 154 $ 164

$ 164 $ 174

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 8:00 - 9:00 pm  9:00 - 10:00 pm  10:00 - 11:00 pm

CRS Luncheon (9/28) ��$22  Member One  Member Two  Special Services: Check here if you require special needs to attend. Attach written description of needs. Cancellation Policy: The WRA reserves the right to cancel courses if not filled. Cancellations must be made in writing prior to September 26, 2010 and will be refunded, minus a $25 administration fee. Registrations cannot be transferred from person to person.

PAYMENT: Register by Mail: Wisconsin Realtors® Association 4801 Forest Run Road, Suite 201 Madison, WI 53704-7337

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wisconsin real estate magazine

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wisconsin real estate magazine

june 2010

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wisconsin real estate magazine

may 2010

Inside the Wisconsin Way

A closer look at the plan to restore Wisconsin prosperity Part 3

teaching of government in K-12 public schools for the purpose of updating and enhancing students’ understanding of how local and state governments operate and affect their lives.

his is the third and final article on the Wisconsin Way project - a multi-year effort by a coalition of diverse organizations to revolutionize the way we tax, spend and invest in Wisconsin. The WRA is a founding partner in this project.

•

This effort has produced a “Blueprint for Change,” a set of new and novel ideas for reforming Wisconsin. A copy of the full report can be found at www.wisconsinway.org. Part one of this series focused on ideas for economic development and part two took a deeper look at the tax reform and modernization ideas proposed in the Blueprint. This final article will review recommendations for government reform and modernization.

Wisconsin Way Ideas for Government Reform and Modernization The Wisconsin Way research over the past few years unfortunately confirms that most of us in Wisconsin know very little about how Wisconsin’s local units of government are organized, where funding comes from, how much they spend and what they spend it on. This informational disconnect complicates the governing process and inhibits efforts to reform and modernize the system. As citizens become frustrated and become convinced that they cannot influence the process, they disengage. The Wisconsin Way believes that reforming and modernizing government spending and management requires addressing three specific issues. First, efforts must significantly enhance the ability of governments and the people they represent to communicate easily and effectively with each other. Second, reforms must help governments in their efforts to maximize the efficiency and cost-effectiveness of the services they deliver. And finally, these efforts must improve the resources that governments will need to develop, implement and manage these necessary reforms, including access to training, research and technical support services. Here are some Wisconsin Way ideas for how to do this:

•

Review the current state academic standards governing the

•

Representatives of local and state government should work with the Local Government Institute, UW-Extension and others to develop.

•

Links should be permanently featured on all local and state government websites.

•

Print and broadcast media should be enlisted in an annual public awareness effort to promote the site and its benefits.

•

Elected and appointed officials should be enlisted in the public awareness efforts.

•

Major institutions and organizations should be enlisted to promote the site to their members.

Using the tools developed for the website, create ready-to-use presentations that can be employed by local officials as well as local government and private organizations.

Expand and enhance the level and quality of the interaction between citizens and their government. •

Improve the ability of elected officials and policymakers to get public input on public needs and measure public satisfaction with how those needs are being met. •

Enhance public understanding of how government is organized, funded and managed. •

Create, manage and aggressively promote a user-friendly website that provides information on how local and state government is organized, funded and managed.

Develop and launch an institutional and organizationally focused information campaign on how local and state government is organized, funded and managed. •

1. Enhance the ability of governments and the people they represent to communicate easily and effectively with each other. •

By michael theo

•

In cooperation with the UW System, the state and local governments create and manage an online polling capacity, available to all units of government for the purpose of surveying constituents on a regular basis regarding needs, financial capacity and satisfaction levels.

Improve governmental ability to inform and engage citizens in a

timely and effective manner when decisions which affect them are being made. • •

Governments should make better use of on-line technology to gather public input.

3. Improve and enhance access to training, research and technical support services governments will need to develop, implement and manage reforms. •

Governments should use online technology to allow citizens to select issues they care most about and receive regular information on those issues.

•

News media should offer online services such as live video streams.

•

Enhance public hearings by allowing citizen access and participation online.

2. Encourage and help governments to continue and enhance their efforts to maximize the cost-effectiveness of, and the efficiency with which they deliver, their services. •

Encourage and help local units of governments to achieve significant operation efficiencies. •

Consolidate the management and delivery of appropriate government services. •

•

• •

Create a commission charged with analyzing all possible consolidation opportunities, cost benefits, advisability and implementation options with emphasis on public safety, human services, pre-K-12 education and infrastructure maintenance such as streets, parks, etc.

Establish a clear set of best practices for the management and delivery of services and hold all Wisconsin governmental units accountable for operating on the basis of those practices. •

Convene a Legislative Council to research, review and identify governmental best practices.

•

Develop and implement an outreach initiative designed to inform and educate elected local officials and public managers about the best practices.

•

Provide the financial and human resources required to incentivize and implement the best practices.

•

Develop and implement an education and information initiative to inform the media and the public of this effort.

•

Use the online polling services previously recommended to measure public awareness of, and satisfaction levels regarding, the best practices.

4. Improve and enhance the performance, efficiency and costeffectiveness of the K-12 public schools and UW systems. •

Restructure and stabilize funding for the K-12 public school system. •

Authorize the state to provide a three-year period during which local units of government would be allowed to develop voluntary consolidations and service agreements, with state funding and incentives.

•

New management councils to parallel existing regional economic development areas with membership from all local units of government in each area. Task the management councils to work with the state to identify cost-saving and productivity opportunities in key areas such as energy consumption, maintenance and purchasing. Provide councils with the financial and human resources required to promote recommended changes.

•

administrative

•

Consolidate school funding for construction at the state level, with the state assuming full responsibility for funding and prioritizing of school building construction.

•

Create regional and statewide purchasing organizations that allow K-12 districts to benefit from volume cost reductions in energy, school materials, texts, paper, technology and other daily necessities.

•

Convene a Legislative Council study with full stakeholder representation to assess and report back within 12 months other opportunities for consolidation.

•

Explore the possibility of creating a statewide program for post-employment health insurance for state education employees managed perhaps by the Wisconsin Retirement System.

After the three-year period, the state should mandate consolidations through legislation.

Create regional management councils tasked with identifying and recommending cost-savings and productivity measures. •

Consolidate appropriate school district functions of Wisconsin’s 425 school districts.

Shift the cost of certain K-12 programs from the property tax to more appropriate funding sources. •

Shift a significant portion of the current public K-12 funding from the property tax to state general purpose revenue funding.

•

Secure Medicare funding for all per-pupil special education Wisconsin Way ... continued on page 28

public affairs

On April 23, 2010, the Wisconsin Legislature wrapped up the 2009-10 legislative session. During this session, the legislature introduced approximately 1700 pieces of legislation with 233 of these bills directly impacting the real estate industry. The WRA was very active this session, passing 6 priority pieces of legislation, defeating a number of bills that would have adversely impacted the industry, and amending many other bills to make them better. The following is a brief overview of the bills the WRA worked on during the session:

AB 638 (Access to Property Tax Records (WIREdata)) – Addresses two open records issues related to obtaining property tax records, which were highlighted in the recent Wisconsin Supreme Court case WIREdata, Inc. v. Village of Sussex, et al. Specifically, the bill clarifies (1) what contractors hired by municipalities can charge for producing the requested public record, and (2) the format in which the municipalities must provide land information data. Status: Passed SB 605 (Electronic Delivery of Condominium Disclosure Materials) – Modifies Wisconsin’s condominium law to allow condominium disclosure materials to be delivered electronically. Status: Passed SB 576 (Delay of Farmland Preservation Conversion Fee) – Delays the effective date of the farmland preservation conversion fee until after each county updates its farmland preservation plan. Status: Did Not Pass

WRA Priority Bills SB 9 (Seller Misrepresentation) – Reverses the Below v. Norton decision by providing that, in addition to any other remedies that are available, a purchaser in a residential real estate transaction may maintain an action in tort against a seller for intentional misrepresentation. Status: Passed SB 587 (Commercial Real Estate Liens) – Makes Wisconsin’s Commercial Lien Law more effective by (a) removing the “30-day notice of intent to file a lien” requirement for transactions involving the purchase/ sale of real estate, (b) authorizing brokers to place a lien on the property involved in the transaction after closing similar to contractor’s lien law, and (c) making other necessary clarifications. Status: Passed SB 601 (Comprehensive Planning) – Modifies Wisconsin’s Comprehensive Planning Law by defining “consistency, clarifying what must be consistent with the comprehensive plan, delaying the consistency requirement for some local communities, and other clarifications related to the law.” Status: Passed

wisconsin real estate magazine

june 2010

AB 863 (Repeal of Farmland Preservation Conversion Fee) – Repeals the Farmland Preservation Conversion Fee. Status: Did Not Pass SB 626 (Subdivision Platting Requirements – odifies Wisconsin’s Subdivision Law (Wis. Stat.Ch. 236) by grandfathering plats from changes in regulations from the time preliminary plats are submitted, extends timeline for when final plats must be submitted after preliminary plats are approved (from 24 months to 36 months); authorizes a subdivider to submit a final plat that is only a portion of the preliminary plat if the preliminary plat identified phases of the development without obtaining permission from the local government. Status: Passed SB 291(Distressed Tax Increment Finance Districts) – Extends the life of distressed TIF districts to up to 40 years, allows contributions from donor TIF districts, and requires Joint Review Board approval of a distressed TID designation. Status: Passed news.wra.org

WRA Experiences Successful Legislative Session By tom larson

Bills Successfully Amended By WRA

AB 580 (Managed Forest Law Disclosure) – Makes various changes to the Managed Forest Law (MFL) program, including a requirement that property owners in MFL provide a written disclosure to a prospective buyer informing the buyer that the property is enrolled in the MFL and some additional information about the MFL program. Status: Passed

SB 185 (Regulation of Wind Farms) – Creates a uniform framework for regulating wind farms at the local level. Creates a wind siting council to develop the local regulations and designates two REALTORS® to serve on the commission. Status: Passed AB 472 (Appraiser License/Certification for CMAs) – Requires anyone who provides an opinion about the value of real estate to be a licensed/certified appraiser, with limited exceptions. Status: Did Not Pass

SB 415 (Carbon Monoxide Detectors in One- and Two-Family Homes) – Requires all one- and two-family dwellings to have carbon monoxide detectors on each floor level. Status: Passed

SB 507 (Document Recording Fees) – Changes the fee structure for recording documents from a per-page fee to a perdocument fee ($25/document); adds an additional $5/document fee for redacting social security numbers from existing documents, which will sunset in 3 years; requires greater accountability to public (state and local); prioritizes funding for online property tax records; requires zoning information to be made available online. Status: Passed AB 400 (Change Locks to Protect Tenant’s Safety) – Requires the landlord to change the locks if the tenant provides the landlord with proper documentation that the tenant faces imminent threat of serious physical harm if the tenant remains on the premises. Status: Passed

SB 624 (Energy Efficiency Loan Program) – Expands existing energy-efficiency loan program to all types of property. Status: Passed AB 136 (Property Tax Assessors/Trespass) – Creates an exception to trespass laws for a tax assessor or the tax assessor’s staff in order to make an assessment on behalf of the state or a political subdivision. Status: Passed SB 557 (Wetland Identification) – Requires the DNR to provide 3 types of services relating to wetlands to persons who own or lease land: wetland map reviews, on-site wetland identifications, and wetland confirmations. Also, requires local communities to provide property owners an information brochure about wetlands when applying for a building permit. Status: Passed

SB 172 (Legal Challenges to Direct Annexations by Unanimous Consent) – Requires all direct annexations by unanimous consent to be contiguous to existing city/ village limits (keeps prohibition on towns challenging these annexations). Status: Passed wisconsin real estate magazine

AB 670 (Shoreland Zoning Disclosure) – Adds a provision to the real estate condition report requiring sellers of residential property to disclose whether the property is subject to a shoreland zoning mitigation plan. Status: Passed

june 2010

Bills WRA Opposed SB 40 (Public Financing for Supreme Court Campaigns) – Provides public financing to eligible supreme court candidates in the amount of $100,000 for a primary election campaign and $300,000 for a general election campaign. To be eligible, a candidate may not accept private contributions, more than $25 from any contributor or accept cash from all sources in a total amount greater than 0.1% of the public financing benefit or $500, whichever is greater. Status: Passed SB 43 (Campaign Finance Reform – Disclosure) – Requires anyone engaging in communication for a political purpose through the media within 60 days of an election to report to the Elections Board. Status: Did Not Pass AB 138 (Appointment of DNR Secretary) – Requires the DNR Secretary to be appointed by the Natural Resources Board, rather than the Governor. Status: Did Not Pass SB 218 (Telemarketing Penalties) – Increases penalties for violating the “no call” law from $100 to not less than $1,000 nor more than $10,000. Creates a private cause of action for people who suffer damages as a result of a violation and authorizes them to seek injunctive relief and actual damages or $500 per violation, whichever is greater. Also adds “text messaging” to definition of “telephone solicitation.” Status: Did Not Pass AB 729 (Mortgage Modification (“Cram Down”)) – Allows a “mortgage negotiator” (lender or loan servicing company) to modify the homeowner’s existing loan if the Legislative Session ... continued on page 27

Record Number of Lawmakers Call it Quits

public affairs

By Joe Murray

This will scramble the political math in a year when voters are already angry with Congress and the state Legislature. With so many open seats going into a volatile election cycle, the balance of power could change. Democrats hold narrow majorities in both houses of the Wisconsin Legislature and find themselves defending a significant number of competitive seats. A net two-seat shift in the State Senate and four-seat shift in the State Assembly would give the GOP a majority in both houses.

n May 5, 2010, veteran Congressman David Obey (D-Wisconsin) announced his decision to retire after serving his constituents for 41 years in the U.S. House of Representatives. Michael Barone, editor of the influential Almanac of American Politics, describes Obey this way: “The congressman from the 7th District is David Obey, a Democrat first elected in 1969 and now the most powerful chairman of the House Appropriations Committee. He is the third-most-senior member of the House and one of the most capable and strongly motivated legislators on either side of the aisle. And he certainly is among the most colorful when he’s worked up over an issue, which is fairly frequently.”

Dave Obey Announced an end to his congressional career on May 5th, 2010, with press releases being released on May 6th. legislators will have to decide if they want to run for the open seat and, in doing so, open up the possibility that legislative seats will be “in play” for the November elections. Democrats maintain a narrow majority in the Wisconsin Legislature and more open seats in northern Wisconsin could jeopardize their hold on power.

Obey’s 7th District stretches from Stevens Point in the south to Lake Superior in the north and includes portions of or all of 20 Wisconsin counties.

What it Means Dave Obey’s retirement will have a major impact on the Wisconsin’s political landscape in several ways: •

•

Wisconsin will have less clout in Washington, D.C. Obey is the Appropriations Committee Chair and one of the most influential members of the House Majority. As the Chair of Appropriations, Obey has a primary role in crafting every piece of major legislation moving through the House. If Obey agrees with your funding request, great. If not, you’re in trouble. Wisconsin benefited from Obey’s position by bringing in millions for his northern Wisconsin Congressional district. Obey’s retirement will make it more difficult for Democrats to hold on to the 7th Congressional District in November. Ashland County District Attorney Sean Duffy, the leading GOP candidate in the primary, has raised over $500,000 and mounted a strong grassroots campaign to flip the 7th District to the Republican column. If the GOP captures this seat, their chance of retaking the House gets better. With Obey out of the picture, Democratic

wisconsin real estate magazine

The first, and perhaps last, major Democratic candidate to announce their candidacy for the open 7th Congressional seat is state Senator Julie Lassa (Stevens Point). Lassa was elected to the State Senate in 2003 after serving in the State Assembly from 1998-2003. Lassa does not have to give up her current office to run for Congress. The two announced GOP candidates include Ashland County District Attorney Sean Duffy and Dan Mielke, a farmer from Rudolph. Duffy is considered a strong front-runner in his primary.

Legislators Retire or Leave The Wisconsin Legislature will have a large freshman class when they return next January. Out of 117 legislative seats up for re-election this year, 23 seats have incumbents retiring or leaving to run for another office. Why are so many incumbents leaving in 2010? It would appear there are two primary reasons. First, seven are leaving their seats to run for another office, either local or state. The remaining 13 are leaving because they have served their constituents for a long time and/or no longer care for the harsh partisan atmosphere that permeates the Capitol.

june 2010

WRA Endorses Van Hollen for Attorney General The WRA Board of Directors has endorsed the re-election of Republican Attorney General J.B. Van Hollen. Van Hollen was elected Attorney General in 2006 over Dane County Executive Kathleen Falk. Van Hollen’s narrow victory was fueled in part by support from the WRA in the 2006 campaign. This year, Van Hollen faces Democratic candidate Scott Hassett from Madison. Hassett is a 22year trial attorney and former Secretary of the Wisconsin DNR. In a statement from Bill Malkasian, President of the Wisconsin REALTORS® Association (WRA), Malkasian had this to say about Van Hollen,” “J.B.’s background includes experience not only in the law and law enforcement, but also in his family’s real estate business. That experience gives him the knowledge to properly balance the private rights of individual property owners with the public rights of all Wisconsin citizens to a clean environment and thoughtful, balanced growth and development. This experience has also helped create a more stable legal climate and stronger law enforcement at all levels, both of which are essential prerequisites to making Wisconsin more attractive for business and families alike. All of which makes for stronger residential and commercial real estate markets and thus a stronger Wisconsin.” Watch for more information on the race for Attorney General and other races this year in future editions of this magazine. Joe Murray is Director of Political and Governmental Affairs for the WRA. news.wra.org

Legislative Session ... continued on page 27

Bills WRA Supported

homeowner is unable to make current payments. Status: Did Not Pass SB 450 (Clean Energy Jobs Act (Global Warming)) – Makes various regulatory changes including modifying the comprehensive planning grant criteria to prioritize grant funding for traditional neighborhood developments, allowing local communities to exceed levy limits to pay for energy efficiency measures and renewable energy products; adopts new building code requirements; and prioritizes state funding for economic development grant programs based upon whether the proposed project will reduce travel, energy use, or emissions of greenhouse gases. Status: Did Not Pass SB 540 (Corporate Campaign Contributions) – Requires corporations to obtain approval from shareholders prior to making disbursements or incurring obligations for the purpose of influencing elections. Status: Did Not Pass

AB 260 (Extraterritorial Plat Approval) – Overturns Wood v. City of Madison by prohibiting a city or village from denying approval of a plat or certified survey map on the basis of the proposed use of land within the extraterritorial plat approval jurisdiction of the municipality unless the plan or regulations meets the requirements for cooperative efforts between the city/ village on the town. Status: Passed SB 294 (Municipal Quotas for Liquor Licenses) – Exempts full-service restaurants from municipal quota limits for liquor licenses. Status: Did Not Pass AB 407 (Mortgage Loan Defaults/ Alternative Dispute Resolution) – Requires a mortgage banker to provider a borrower with a default notice within

45 days after the due date for the second payment period. Allows either party in a foreclosure action to request an alternative dispute resolution method. Status: Did Not Pass AB 852 (Wetland Restoration Permits) – Authorizes the DNR to issue a general permit for wetland restoration activities. A permit is automatically approved if the DNR does not act within 15 days after the application is submitted. Status: Did Not Pass The WRA will continue to work on the bills that did not pass this session and will hopefully re-introduce them next session. If you have questions, please contact Tom Larson (tlarson@wra.org) at (608) 2408256. Tom Larson is Director of Regulatory and Legislative Affairs for the WRA.

AB 844 (Groundwater Management Regulations) – Establishes standards and a process for designating areas in the state as groundwater management areas; requires a local groundwater management council to be appointed and develop a groundwater management plan for the groundwater management area; and further limits approval of high-capacity wells. Status: Did Not Pass

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Wisconsin Way ... continued from page 23

costs that exceed 125 percent of a district’s per-pupil average.

•

Shift a significant portion of current K-12 funding from the property tax to the sales tax.

•

Increase the share of state equalized aids to school districts by re-prioritizing existing revenue streams.

•

Establish a Legislative Council study commission to review the appropriateness, effectiveness and impact of the five major existing property tax relief programs.

•

Enabling every student to maximize his or her potential.

•

Empowering every student to graduate with the skills required to succeed to the best of their ability in their next level of academic or workplace endeavor.

•

Develop an effective methodology for evaluating school and student performance.

Significantly improve student achievement by improving teacher capacity. •

Improve and strengthen new teacher entry into the schools and classrooms by establishing teacher residency programs.

•

Improve low-performing schools where needed by creating academic improvement teams.

•

Reward productivity and results by paying highly-skilled, highperforming teachers more.

Restructure and stabilize fund for the UW System. •

Encourage the UW System to move as quickly as possible to offer a new four-year academic curricula in which students could achieve the necessary information and skills to earn a marketable advanced bachelor’s degree in three years (or less) and then have pre-paid access to an agreed-upon number of credits at future junctures in their careers.

•

Establish an educational operational cost for the UW System as a whole that accurately reflects a per-pupil cost.

Managing operations as efficiently and cost-effectively as possible.

•

Set tuition for all students at 25 percent of that per-student cost of educational operations.

Significantly improve student achievement by enhancing the ability of school districts to address specific challenges.

•

Establish an income-sensitive tuition program that allows students to repay their cost of education over 25 years at a rate not to exceed 5 percent of their gross-adjusted income with the understanding that no charges would be assessed in years in which the graduate is making less than $25,000.

•

Establish a general purpose revenue development fund for the UW System equal to 20 percent of student supported educational costs and dedicated to fostering and supporting new programs, research and instructional expansion.

•

Establish a tuition forgiveness program that reduces graduate annual payments by 25 percent each year that they are working in Wisconsin.

•

Closing the achievement gaps among students resulting from economic disparities.

•

Recruiting, hiring, mentoring, supporting and retaining the very best teachers and administrators available and for paying such professionals appropriate and competitive wages.

•

Reduce drop-out rates and help school districts keep students in school by creating early warning systems to identify at-risk children.

•

Support K-3 initiatives that produce proven positive results.

•

Strengthen and focus school leadership by raising administrative management and leadership expectations and requirements.

•

Significantly improve parental and community engagement in persistently low-performing schools. •

•

Improve outcomes and accountability in the K-12 system by:

• •

and/or the school year in Wisconsin.

Create an independent office of school-community relations to initiate programs that help the teachers and administrators in each school work with parents and other community members to support and improve education. In cooperation and coordination with local government agencies, have schools serve as full-service, vibrant community centers by offering various community services such as basic health care, tutoring, social services, parent support groups, athletics, literacy programs and job training services during after-school hours and weekends. Partner with community organizations and businesses on a range of issues including creating apprenticeship opportunities, encouraging parent volunteerism, student mentoring and tutoring.

Study, and if advisable, considering lengthening, school days

wisconsin real estate magazine

june 2010

What do you think? We’ve presented this three-part series on the Wisconsin Way’s Blueprint for Change 2010 in an effort to find solutions to Wisconsin’s most vexing issues and to stimulate discussions for more ideas, both inside our organization and with the general public. Some of these recommendations are general and aspirational and some are specific and programmatic. Moving forward, the Wisconsin Way partners will be promoting our proposed reforms with legislative and gubernatorial candidates running for office this November, as well as reaching out to citizens, organizations and associations – live and via the Internet – across Wisconsin. If you have opportunities for programs in your community, please don’t hesitate to send them to mtheo@wra.org. Michael Theo is Vice President of Legal and Public Affairs for the WRA. news.wra.org

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