June 2011 - Wisconsin Real Estate Magazine by Lauren Bizorik

Ensuring Your House is Healthy What responsibility does a REALTOR have? 速

Pier Registration DEADLINE Extended Legislature passes Senate Bill 59

MAGAZINE

June 2011 $5.00

A New and

Improved DNR? Could proposed plan bring changes to the real estate market?

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North Central Home of the Best AgentsÂŽ

table of contents

june

2011 |

features

Uncovering the Truth about ‘As Is’ Transactions

Sales Tip: Sticking to the Basics

The Importance of Being at the Political Table

A plan that would completely overhaul the state Department of Natural Resources is in the works. We offer an inside look at the changes.

The commonly-confused myths behind ‘as is’ transactions such as disclosures, writing offers and what the truths really are.

Marcus Wally offers a proven system to ensure your best chances for becoming successful in the real estate business, and how to develop your own system.

For nearly four decades REALTORS® from every corner of the state come to Madison and visit the capitol to discuss issues of importance in the industry.

wisconsin real estate magazine

articles

A New DNR?

27, no. 9

24 16

vol.

june 2011

April Home Sales Fall as Expected

Sales of existing homes fell 32.3 percent in April compared to the same month last year.

Techhottips: Technology Tips & Tools WiFi hotspot security, the benefits of becoming your business persona on Facebook and other technology advice real estate professionals can use.

Legal Hotline: Environmental Issues Lake water quality, radon, guidelines from the Environmental Protection Agency and other legal concerns REALTORS® might face.

Pier Registration Deadline Extended A 2007 law grandfathered 99 percent of piers from new standards. On May 11, the registration deadline was extended. About 5,000 remain unregistered.

The Industry Agenda in Unsettled Political Times

Why it’s important for REALTORS® to be part of the state’s political process as a means to help protect the real estate industry.

News

inside the wra

with bill malkasian

Top News Stories in and Around the Industry vice president of the Metropolitan Milwaukee Fair counties. The organization’s research found that the United Way Honors the Stark Family Housing Council, laments, “It’s been a long time number of people in those markets paying too much for Service t’s withouttoquestion; Wisconsin has a very unique transactions, such as whether or not a

coming.” The Pewaukee-based commission has

for their rental housing will double from around

political landscapenotin conducted the wake aofcomprehensive upcoming recall is required to list disclosures if they review of seller housing 70,000 currently to a whopping 140,000 by 2010. elections and unrest surrounding the state budget are selling their home “as is.” In the Best patterns since the 1970s. Some say a partial solution would be for the U.S. proposal. During these hectic times, our industry of the Legal Hotline, Tracy Rucka focuses on government to reverse course on housing policy and ® Wisconsin Millions toenvironmental Ease enjoyed record-breaking attendance at ourReceives annual REALTOR issues such as water quality with substantially increase funding for rental assistance, Community Foreclosure lakefront properties, rules for carbon monoxide and Government Day conference on April 27. IfCrisis you were one of particularly help for working families. United Way of Dane County Milwaukee Business (WI) support (09/30/08) detectors and more. Tom Larson will provide you the 600 plus in attendance, your efforts and Journal continued United ofWay of Dane County with$39 an update the pier Free registration deadline our industry help us to passThe good laws and defeatisbad state of Wisconsin dueones. to receive nearly NARonReleases FHA Toolkit recognized the Stark Family with extension andWisconsin MarcusREALTORS® Wally, ourAssociation regular (10/30/08) contributor, million in federal funds to stabilize neighborhoods In early May, the Society board of directors came to discusshomes. to the 2008 Tocqueville and stave off atogether spate of abandoned According offers advice on real estate business basics, and how Award for outstanding service to theofDane County a variety issues. Through to their leadership and direction, we NARbasics and thewill WRA are agents eager tosolidify help youtheir meet the HUD and Gov. Jim Doyle, the funds are separate off the building help Billcommunity Malkasian and United Way. Tocqueville Society as anfrom areThe able to push forward organization and make groundthe on government current challenges of the troubled economy. We approximately $9.2 million is careers. WRA President Award celebrates and acknowledges peopleourorbusinesses issues that impact thethe most. then switched know that you need resources that can help you awarding city ofWe Milwaukee, where the foreclosure families, such as the Starks, who and havespent made several a major days in We will busy this summer, state senate recall gears Washington, the National rate is currentlyD.C. 9.9 for percent. HUD is awarding thebe very close transactions, andfacing you need them at little or no impact on the quality of life in Dane County through ® funds via its Neighborhood Program, elections in July is a an most unusual time Association of REALTORS ’ Mid-year Legislative Meeting Stabilization on May cost. and NARAugust. has justThis released all-new FHA Toolkit their exceptional service and commitment to the which ®almost billion is the being allocated for thetostate online and for hereto at theyou WRA, as wethe enter into 9-14, along with 8,000 otherunder REALTORS from $4 throughout forus FREE help get clients financing community. local and state governments for the redevelopment unchartered political waters. I have environment. seen single recall U.S. they need in a Although credit-strapped It is of abandoned and foreclosed houses. elections, never 36most yearscomprehensive with the association oneinofmythe toolkitshave NARI ever has City Housing Authority Receives The NAR meeting included discussions on two hot topics centered experienced aever mass set of recalls. produced, and it’s available to all REALTORS® 100-Unit Grant on the strategic future of NAR’s Sites: Notprogramming Just for Personal political and IDX Milwaukee Journal Sentinel (09/25/08) Pabst, Georgia right now by visiting the link below. They also have Connections Anymore In that vein, our political columnist, Joe Murray, discusses how display of MLS listings. Both topics consumed most of the week’s a new page called “NAR Helps You Navigate The city of Milwaukee’s hall housing authoritybefore is duethe final Minneapolis-St. Journal Grayson, such launched groups as the National Association of REALTORS® (NAR) discussions decisions Paul wereBusiness rendered at (09/29/08) the the Current Economy” where you can find dozens of Katharine to receive $6.7 million in federal Hope VI money NAR Directors meeting on May 14. If you are curious, the NAR and WRA are handling our special interests in his piece, “Our great products and resources, like the FHA Toolkit, to build 100 new housing units. The 100 units will ® Paul,800 Minn.-based Teresa Boardman Board of Directors consists ofSt. nearly people allREALTOR in one room Policy Agenda in Unsettled Political Times.” In addition, Mike be constructed in a 2.5-mile area and will include for free or at a steep discount. Visit www.Realtor. approximately hours! says Flickr, Facebook and other social networking Theo stresses the importance of “Being at the (political) Table” 29 public housing and for affordable rental four units; org/NARHelpsYou for links to these great programs sites make it easy to meet people whoand might reflects on the WRA REALTOR® in Government Day. nine affordable housing units for income-eligible ® and products. eventually becomealso clients. While many The Washington D.C. REALTOR gathering included the professionals families; and 62 moderately priced, open-market are using these our sitesCongressional to make business Along contacts annual Wisconsin visit to the hill, with with these topics the magazine also offers up technology condominiums. HUD Secretary Steven C. Preston Home Loans Going a and companies use them to conduct background delegation on important real estate topics affecting your business. tips, a product showcase, as well as a Strong, website tip Albeit for navigating comments, “Milwaukee’s housing authority has checks or recruit new workers, many simply want Bit Tighter, in Area I’m pleased to report we had more than 40 people representing the new, advance search options available on the WRA’s website, demonstrated it has the leadership to lead and connect I’ve withseen people who have similar interests. Wisconsin State (10/17/08) Balousek, of Marv state, which is lives. the highesttonumber in many years. wra.org. I’m also proud toJournal announce the winners the 2011 revitalize neighborhoodsourand transform According to Boardman, “The hard sell is dead. It ® My and personal thanks Wisconsin REALTORS Foundation scholarship, a scholarship Cities like Milwaukee change grow and needtotoall who attended on behalf of the 13,000 Despite the ongoing national credit crisis, property doesn’t work door-to-door, and it doesn’t work on ® revitalize housing to makeback surehome many in aren’t priced Wisconsin. awarded annually to 10 youth, the children of REALTORS . professionals say mortgage money remains available social networks.” On Flickr, Boardman connected out.” Milwaukee is one of a half-dozen housing throughout southern Wisconsin to home buyers with a fellow photographer who eventually used herhead into As we move into June, WRA leadership and staff begin the As we future months, the WRA is busily planning authorities nationwide to receive new Hope VI with solid credit. Ron Steinhofer, manager of services to purchase a home. process of assembling an operational budget for the WRA in 2012. our Annual Convention, set for Sept. 13-15 at the Kalahari grants. Marshall & Ilsley Bank’s regional home lending Our fiscal year begins October 1, and each summer the staff and Resort and Convention Center. Our next issue of WRE Foreclosures Push Rents Higher, group, states, “There’s plenty of money for home Housing Study Delay Frustrates elected leadership construct an operational budget based on magazine will focus on our Annual Convention, with Squeezing Low Income Families loans out there. It is slightly more difficult to qualify Advocates issues important to your business as aPublic broker, agent affiliate.Olson, Dan features on this year’s keynote speakers, a schedule of Minnesota Radio (MN)or (09/21/08) than two or three years ago, but if you have a good Milwaukee Journal Sentinel (10/07/08) Williams, Scott This year our planning process will include member-polling and events and courses. It’s not too early to register and credit score, a good job and a down payment, money In Minnesota’s Twin Cities, a wave of home Two years after promising the Milwaukee metro as we determine what issues will be strategic think-sessions, take advantage of special deals and early-registration foreclosures has pushed more people into the rental is available.” Steinhofer adds that banks still are area’s first major housingparamount study in three decades, for next year. incentives. For a complete list of events, education apartment sector. The result is an intensifying making loans via such programs as Fannie Mae the Southeastern Wisconsin Regional Planning or to register, visit the site, wra.org/convention for demandmagazine on Minneapolis andon St.topics Paul’s rental housing and Freddie Mac. Furthermore, credit standards issue of Wisconsin focuses Commission (SEWRPC) is This still struggling to get the Real Estate details. so much that the vacancy remain about the same as they were six months ago, effort launched. Proponents hope the study willas it stock, involving industry pertains to theso environment andrate is very low and rents are on the rise. This, in turn, means lowserve as a catalyst for improving affordable housing rules meaning that qualified home buyers can get loans changes in environmental and regulations. Our feature story, working families face higher monthly rents opportunities throughoutwritten the city’s suburbs. Butbrings income if they have the proper income verification. On the by Tom Larson, to light a proposal that could mean even though their income hovers at unchanging Until next month, commissioners have yet to an the advisory downside, banks have been less willing to make an assemble overhaul for state’s Department of Natural Resources, to levels. Since 2005, the Twin Cities apartment committee to oversee the research or set a specific loans with higher loan-to-value ratios. In addition, a two-year Charter Agency pilot program. Thedipped purpose would be to closer to vacancy rate has from 7 percent timetable for conducting the survey. Phil Evenson, conventional financing without a down payment has to improve customer service, increase on-line permitting options 4 percent. Average monthly rents over that same the commission’s executive director, said other issues indeed disappeared. However, 100 percent financing and other efficiencies to name a few. Deb Conrad writes about time span are up more than $25, rising to more keep getting in the way. The delays have frustrated ® is still available with Veterans Administration and ways a REALTOR can help guide homebuyers through possible than $850. The St. Paul-based Wilder Foundation housing advocates the most. Bethany Sanchez, BillCities Rural Development home loans. reviewed for several health risks in homes suchrecently as mold and income radon data during the Twin

home-buying process. In her series, Uncovering the Truth, Cori Lamont takes a look at the myths and truths surrounding as is

wisconsin real estate magazine

june 2011

www.wra.org/wrem

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 Horning, Chairman jphorning@shorewest.com

2011 REALTOR® Children Scholarship Winners

Robert Keefe, Chairman-Elect rkeefe@keeferealestate.com

Ten youths have been selected to receive the Wisconsin REALTOR® Foundation’s annual REALTOR® Children Scholarships, the Foundation’s Scholarship Committee recently announced.

Renny Diedrich, Treasurer rdiedrich@coldwellhomes.com William E. Malkasian, cae, President wem@wra.org

The recipients and their REALTOR® parents are: Ryan Burton (Michele Burton) Onalaska; Taylor Disch (Michelle Marking) Verona; Alexandra Erke (Terri Lewis) Wind Lake; Max Gordon (Jennifer Gordon) Wausau; Adam Kaiser (Philip Kaiser) Hawkins; Zachary Lamers (Alan Lamers) Appleton; Zeus Markos (Nancy Markos) Hartland; Kate Miller (Craig Miller) West Allis; and Anthony Stolar (Michael Stolar) Wausatosa.

Editorial Staff:

William E. Malkasian

The $750 scholarships are awarded on the basis of the individual’s scholastic achievement, leadership ability and service to his or her school and community. Each of the winners have applied to at least one accredited two or four-year college. 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.

Publisher

Robert Uhrina Managing Editor

Autumn Drussell

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

Editor

Joe Leschisin Senior Designer

2011 Regional Directors

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.

In accordance with Article 5, Section 3(c) of the WRA Bylaws, the following Regional-elected directors were nominated by the Nominating Committee on April 20, 2011 and elected by the Board of Directors on May 6, 2011. Each of their two-year terms begins September 14, 2011 and ends September 30, 2013. Region One (No open positions)

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.

Region Two Dan Kruse – Century 21 Affiliated, Madison Region Three David Schmidt, Jr – Dave Schmidt Realty, Milwaukee

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.

Region Four KC Maurer – RE/MAX 24/7 Real Estate, Appleton

Region Five Sharon Helwig – RE/MAX The American Dream Professionals, Marshfield Region Six Steve Lillestrand – Meyer & Associates, Holmen Region Seven (No open positions)

WRA Launches 100th Annual Convention Website

4801 Forest Run Rd., Suite 201 Madison, WI, 53704-7337 (608) 241-2047 • (800) 279-1972

It’s here! The Wisconsin REALTORS® Association recently launched its website pages for the 2011 Annual Convention. In Find a day-to-day listing of events, educational opportunities, workshops, presentations and other events, such as a golf outing, ice breaker party, after-party (with karaoke and a costume contest) and much more. For the first time the Convention will feature a Bar Camp, a free-flowing meeting of the minds lead by the participants themselves. In addition, self-proclaimed Beatles expert Bill Stainton will discuss how groups such as the Beatles and others became famous, and how REALTORS® can use those basic techniques to succeed. Complete descriptions of events and workshops are available on the site as well as a basic schedule for quick reading. Hotel information, registration, sponsorship opportunities, an exhibitors list and networking opportunities are also part of this comprehensive site for the Convention, held September 13-15 at the Kalahari Resort and Convention Center.

legal hotline: (608) 242-2296 • (800) 799-4468 general fax: (608) 241-2901 products/education fax: (608) 241-5168 legal hotline fax: (608) 242-2279 president fax: (608) 242-2267 e-mail: editor@wra.org Website: www.wra.org

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

www.wra.org/convention

Visit wra.org/convention for details!

june 2011

news monthly wisconsin housing report

Home Sales Fall as Expected By David E. Clark, Economist, C3 Statistical Solutions Inc.

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

> WISCONSIN HOUSING STATISTICS MONTHLY ACTIVITY - APRIL 2011

% Change

YTD-2011

YTD-2010

% Change

-16.6% -32.3% -8.4%

40,692 13,394 $124,000

51,453 15,941 $135,950

-20.9% -16.0% -8.8%

APR-2011

APR-2010

New Listings Closed Sales Median Sales Prices

12,083 4,283 $125,900

14,488 6,327 $137,500

Region

Median Price APR-2011 APR-2010 % Change

Existing Home Sales APR-2011 APR-2010

% Change

Southeast South Central West Northeast Central North

$138,000 $152,000 $125,500 $105,162 $104,000 $95,000

1520 934 444 750 257 367

-30.5% -29.8% -41.1% -33.6% -32.4% -31.8%

ot surprisingly, existing home sales fell significantly in April according to data just released by the Wisconsin REALTORS® Association (WRA). Sales of existing homes fell 32.3 percent in April compared to the same month last year. The median sale price was also down 8.4 percent to $125,900 between April 2010 and April 2011. “Nobody familiar with recent housing trends is surprised by this,” John Horning, Chairman of the WRA Board of Directors said. Horning said the market last April was “overheated” because the terms of the federal homebuyer tax rebate program required an accepted offer by the end of April and closing by the end of June, 2010. “As a result of last years unique federal tax program, the next few months are going to be a statistical roller-coaster ride,” Horning said. He predicted the housing sales data for the next two month’s sales will pale by comparison to 2010 because buyers were rushing to close their sales last year to take advantage of the federal program. “The flip side is that third quarter sales figures for 2011 should look much stronger because sales plummeted last year after the expiration of the federal program,” Horning said.

Statewide

wisconsin real estate magazine

$152,000 $159,700 $133,600 $120,000 $105,950 $108,000

-9.2% -4.8% -6.1% -12.4% -1.8% -12.0%

According to the REALTORS® report, regional performance was remarkably consistent, with five of the six regions in the state seeing their sales fall between 29.8 percent and 33.6 percent between April 2010 and April 2011. Only the west region saw its home sales fall at a faster rate, dropping 41.1 percent over the period. “This suggests that sales activity in all regions was similarly distorted by the federal program,” Horning said. While median prices statewide fell 8.4 percent in April 2011 compared to that same period last year, prices varied in different regions of the state. Median prices fell just 1.8 percent in the central region, dropped 4.8 percent in the south central region, and 6.1 percent in the western part of the state over the period. Prices declined between 9.2 and 12.4 percent in the southeast, north and northeast regions of the state. “The volatility of the sales and price data makes it difficult to discern underlying trends in the housing market,” WRA President Bill Malkasian said. “However, there have been some signs of stability in the economy”. One sign is the state unemployment rate, which has stayed at 7.4 percent throughout the first three months of the year. “While this is still high, it is well below the national rate which is currently at june 2011

2187 1330 754 1129 380 538

9 percent,” Malkasian said. He also pointed out job growth has kept pace with the growth in the labor force. “Wisconsin added nearly 15,000 jobs this year, with over 7,500 in the relatively high-paying manufacturing sector,” he said. Malkasian also pointed out that the current low interest rates, combined with the current downward movement in home prices, makes Wisconsin housing very affordable. The Wisconsin REALTORS® Housing Affordability Index measures the percent of the median priced home that a buyer with the statewide median family income can purchase was at 236 in April, which was more than 20 points higher than this time last year. As economists begin to worry about the prospect of inflation, Malkasian said it’s important to remember that historically, housing has been a good way to hedge against the long-term impact of inflation. Inflation will hurt housing affordability by raising housing prices and mortgage interest rates so buying now is key. “The bottom line is this is an ideal time for credit-worthy buyers to get a lot of housing for their money,” Malkasian said. For More Information Contact: David E. Clark, Economist, C3 Statistical Solutions Inc. Office phone: 414-803-6537 www.wra.org/wrem

WRA.org ...

wra website By autumn drussell

Each month we will take a look at different areas of the WRA’s redesigned website, wra.org, and bring you tips on how to use each section to the fullest. Have a question for us? Submit questions by e-mailing the WRA at webmaster@wra.org. We may be able to feature your question here.

Really Simple Syndication (RSS) Feeds:

How they work You’ve seen it before and chances are you already know the orange square with white, curving radio lines stands for Real Simple Syndication (RSS). But do you know what it is and how it works?

The search is on!

Site offers advanced options If you’ve visited the WRA’s website, wra.org, since its March re-launch, you might have noticed several upgrades to many of the site’s tools and resources. One of those new features is an enhanced, advanced search option, including the ability to narrow a search by date or author. The search option, located in the middle-top of any wra.org page, gives you a choice for a basic search (the term and document properties, i.e. html, images, documents, etc.) and an advanced search to filter your results. The advanced search allows the user to narrow results with options such as with “all of the words,” with “exact phrase,” “at least one of the words” or even limit it to “without the word.” Results can be further filtered by perimeters such as “created (before or after),” “author,” “modified (before and/or after)” and “file size.” To test this, I searched for the term, “ethics,” in the basic search within the site (remember you can also search tags, media, html, etc. here). I received a list of about 220 documents in .13 seconds. Next, I used the advanced search to narrow my options for the term “ethics” by using the filter “without the word” code. This resulted in a narrowed list of 37 options for the word “ethics” in documents, a jpg file, a brochure and even a position paper! So as you can see, this advanced search is an efficient and user-friendly addition to the WRA’s website, wra.org. Check it out!

wisconsin real estate magazine

june 2011

RSS feeds are a way for an individual or group to customize how you receive information, on your computer or mobile device. RSS feeds let the user filter a variety of information by type (i.e. what kind of news) to source (i.e. blogs, video, news, etc.) and when and how. It’s a way to tailor the information you want (such as real estate news) and from what sources (such as the WRA). As a member you can visit our website, wra.org, and view the latest news section on the home page to review the latest industry news from a variety of sources. In other words, we do the scouting so you don’t have to. Web publishers use RSS to easily create and distribute news feeds that include links, headlines, and summaries. REALTORS® can utilize RSS feeds on their own websites as a quick and easy way to automatically populate it with fresh and up-to-date information. The WRA offers four RSS feeds you can subscribe to using thirdparty RSS news reader software such as Google Reader, Newsgator and Feedbucket. WRA.org uses an aggregator to automatically publish industry news from national, state and local sources, including our own WRE magazine in addition to a news feed from Facebook (see www.wra.org/News/RSS/RSS_Feeds_from_the_WRA/).

A New and

Improved DNR?

Governor Walker is considering a plan to completely overhaul the Wisconsin Department of Natural Resources (DNR) in an effort to improve the customer service and business support of the agency, as well as enhance its mission to protect our natural resources. If approved by the governor, this new plan could be implemented through executive order within the next few months. by tom larson

wisconsin real estate magazine

june 2011

www.wra.org/wrem

Background Under the plan, the DNR would operate under a two-year, Charter Agency pilot program that would give the agency increased flexibility to hire employees, offer merit pay and expedite the permitting process. In addition, the agency would be able to better allocate staff resources to those areas where permitting backlogs exist. The Charter Agency concept has been recently utilized by the states of Iowa and Washington. Both states pursued innovative strategies to achieve better results within the government by testing the hypothesis: given greater operating flexibility, Charter Agencies will be able to produce better outcomes for their customers at less costs than under the standard bureaucratic system. The Wisconsin DNR Charter Agency concept is similar to the Iowa and Washington wisconsin real estate magazine

june 2011

programs, but is a more streamlined version with less bureaucracy and red tape involved. New Agency Framework Under the Charter Agency, the DNR has established various operational goals and has identified ways to achieve those goals. Those goals include: â&#x20AC;˘

Enhancing customer satisfaction through increased outreach and assistance, development of online permitting options and expanding over-the-counter service;

â&#x20AC;˘

Improving cost-effectiveness by eliminating duplicative systems, lower priority work and reducing overhead and operational costs for facilities management, rent, travel and other basic operations; DNR

continued on Page 8

Improved DNR?

(Continued from page 7)

•

Improving management systems to reduce permit times for major air and water permits;

•

Changes should result in “more boots on the ground” and staff having more hands-on duties and less paperwork;

•

Greater consistency and accountability in decision-making by setting uniform performance expectations for staff and supervisors and implementing biannual audits of programs; and

•

Wisconsin businesses would have a more responsive and accountable partner in business development;

•

Maintaining employee salary and fringe costs below 90 percent of authorized levels for fiscal year, 2011.

DNR regulatory decisions will be consistent and transparent to the public;

•

Customer service and access to the DNR will be greatly improved;

•

Efficiencies and cost-savings will be enabled through reduced bureaucracy; and

•

Encourages developing Internet-based tools to streamline and more effectively track permit applications.

To achieve these goals, the DNR would be given more autonomy to independently manage its human and capital resources. Rather than working through the Department of Administration, the DNR would have the discretion to manage the following: •

Recruitment and retention of high performing employees by offering merit pay to reward excellence and retain and attract talented employees;

•

Workforce alignment – to shift resources to areas where more staff is needed to remedy permit backlogs;

•

Customer service – Over-the-counter service will be increased by 30 percent over 2010 base year.

•

Greater utilization of information technology to assist consumers in obtaining information and processing permits; and

•

Reduced Permitting Times – Goal of reducing average permitting times by 10 percent for major air and water permits.

•

Purchasing and procurements.

•

Customer Satisfaction – Measurable customer service bench marks are established for selected critical business function (by first quarter); improvement goals are established (by second quarter) and measured (years one through four).

The DNR believes this new framework will result in numerous benefits for both our natural resources and the economic development community. These benefits include:

Finally, to measure the success of this new framework, the DNR has established the following performance benchmarks:

•

DNR’s mission to protect and enhance the environment will be better supported;

•

DNR will have increased operational flexibility;

wisconsin real estate magazine

For more information on the new plan to restructure the DNR, please contact Tom Larson (tlarson@wra.org) at (608) 240-8254. Tom Larson is Chief Lobbyist and Director of Legal and Public Affairs for the WRA.

june 2011

www.wra.org/wrem

FACING CHANGE WRA 2011 CONVENTION

www.wra.org/2011convention September 13-15, 2011

Kalahari Resort & Convention Center - Wisconsin Dells

FacingChange FACING CHANGE WRA 2011 Convention

Registrant One INFORMATION:

 Check here if you are an Association Executive Name___________________________________________ Firm Name __________________________________________ Address_ ________________________________________ City_______________________ State_ _____ Zip____________ Phone (W) ( )___________________________________ (H) ( ) __________________________________________ WRA 2011 E-mail Address_____________________________________ WRA member # _______________________________________

September 13-15, 2011

Kalahari Resort & Convention Center

CONVENTION www.wra.org/2011convention

*TWO-FER Convention Special: 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/convention2011fees) 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/convention2011reg. 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 website to register and take advantage of the discounted pricing.

Two-FER: 2nd WRA Member INFORMATION: Name___________________________________________ Firm Name___________________________________________ Address_ ________________________________________ City ______________________ State _____ Zip _____________ Phone (W) ( )___________________________________ (H) ( ) ___________________________________________ E-mail Address_____________________________________ WRA member # ________________________________________ Member Thru 8-1 Thru 8-22 After 8-22 ATD  1-Day Pass ( Tues/Wed/Thurs ) circle one $ 84 $ 94 $ 104 $ 124  Full Convention Pass $ 114 $ 124 $ 134 $ 154  TWO-FER: 2nd WRA Member* $ 54 $ 64 $ 74 $ 94  Unlicensed Spouse/Sig. Other $ 35 $ 35 $ 35 $ 55 Name of Spouse or Significant Other:____________________________________________. Non-Member

 1-Day Pass ( Tues/Wed/Thurs ) circle one  Full Convention Pass

Real Estate Continuing Education

Thru 8-1 $ 114 $ 154

Thru 8-1

Thru 8-22 After 8-22

Thru 8-1 $ 185 $ 185 $ 185 $ 330 $ 330

Thru 8-22 After 8-22 $ 195 $ 205 $ 195 $ 205 $ 195 $ 205 $340 $ 350 $ 340 $ 350

Thru 8-1

Thru 8-22

After 8-22

Room Rates Standard Room: Jacuzzi Suite: Royal African Queen Suite: $179 Release Date: August 13, 2011

$99 $149

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

ATD

• Access to Indoor Theme Park following Chairman’s Dinner - 9/14

ATD

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 C – Other Approved Forms - 8:30 – 12:00 (9/13)  Course 1 – Listing Contracts – 8:30 – 12:00 (9/14)  Elective D – Financing – 1:00 – 4:30 (9/13)  Course 2 – Offer to Purchase – 1:00 – 4:30 (9/14)  Course 3 – New Developments – 8:30 – 12:00 (9/15)  Course 4 – Business Ethics – 1:00 – 4:30 (9/15) Designation Classes  ABR Elective - Real Estate Marketing Reboot (9/13)  CRS Elective - Positioning Properties (9/13)  CRS Elective - Real Estate Social Marketing (9/14)  Both CRS Electives (9/13 & 9/14) w/convention  ABR & CRS Electives (9/13 & 9/14) w/convention

Kalahari Resort and Convention Center 1305 Kalahari Dr. | Wisconsin Dells, WI Phone: 877-253-5466 or 608-254-5466

Included in Registration Fee: • Icebreaker Party – 9/13

$ 124 $ 134 $ 154 $ 164 $ 174 $ 194 Thru 8-22 After 8-22

Hotel information:

Event Fee – Per Person: Golf (9/13) ��$98 Wild Rock Golf Club - Wisconsin Dells  Member One  Member Two Real Estate Bar Camp (9/13 @ 12:30p.m.) �� FREE  Member One  Member Two

ATD $ 225 $ 225 $ 225 $ 370 $ 370

Two-Fer Pricing

ATD

Two-Fer Pricing

CRS Luncheon (9/15) ��$20  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 13, 2011 and will be refunded, minus a $25 administration fee. Registrations cannot be transferred from person to person.

Chairman of the Board’s Dinner (9/14) ��$49  Member One  Member Two  2nd WRA Member* .....$ 276  2nd WRA Member* .....$ 276

Appraisal Course - 9/15/2011 WRA Appraisal Section Member  Class Only  Class w/ Convention

$ 134 $ 144

$ 144 $ 154 $ 154 $ 164

$ 174 $ 184

 2nd WRA Member* .....$ 90

WRA REALTOR Member  Class Only  Class w/ Convention

$ 144 $ 154

$ 154 $ 164 $ 164 $ 174

$ 184 $ 194

 2nd WRA Member* .....$ 100

Non-Member  Class Only  Class w/ Convention

$ 154 $ 164

$ 164 $ 174 $ 174 $ 184

$ 194 $ 204

After Party Bowling Tournament (9/14) �� FREE Sign up on site! 8:00 - 9:00 pm 9:00 - 10:00 pm 10:00 - 11:00 pm

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

Total amount $__________________  Enclosed is my check made payable to the WRA  Charge my VISA / MasterCard (circle one) Card Number ��Exp. Date___________

techhottips

View more posts at www.techhottips.com

Technology Tips & Tools for the Real Estate Professional

Wifi Hotspot Security Tip You may have heard people wary of logging into public WiFi spots fo security reasons. Public Wi-Fi hotspots are usually unsecure. Your local coffee shop and the airplane WiFi, for example, want to make it convenient for you to connect. So that same lack of security that makes it easy, also makes connecting to them risky. Windows 7 has added an extra feature when you connect to a public WiFi network. As soon as you connect, the “Set Network Location” window pops-up automatically. Be sure and set the location to “Public Network” when prompted, if you’re connecting to a public hotspot. The Public Network location blocks file and printer sharing, which are common routes for data snoopers. Network discovery is turned off too; all of which makes your data less visible on a wireless network.

Who Are You? If you have a Facebook business page as well as a personal page, did you know you can “become” your Business Page identity while leaving comments and likes on other pages ? Maybe you read that and think you don’t care... but let me suggest that by taking on the identity of your Business Page and liking and commenting in a few places that are in your community, do you think some people’s curiosity might get piqued and they’d have a look at your business page as a result ? Let me show you how you can do this - see if your readership increases after you try it a few times. 1.

Log into your Facebook Account and use the drop down menu under [ACCOUNT].

Select [Use Facebook as a Page].

Your pages that you manage will appear, choose the one you want to become and click [Switch].

All of your activities will now list you as “Your Business Page Name” instead of your “Personal Name.” Here is an example of how I used it the other day on a local brewery page in a town I live and practice Real Estate. (That brewery has over 28,000 people that like their page! I get a kick out of that kind of opportunity! )

Export Your Peeps In order to import your contacts into an application or website, you will first need to export them to a .csv file. Why on earth would you want to do that ? •

Many places in social media allow you to import your contacts to see if the people you already know are using the network.

•

You might want to use your current contact list for an electronic newsletter to send out.

•

Some people find it easier to edit/sort/organize their contacts in a spreadsheet - this will do that.

•

If you are changing where you keep your contact list, you’ll want to move all of your old ones over.

•

And the most important reason of all, you need a backup no matter where you store your precious database.

Here is video walking you through exporting your database using Gmail. You will find it similar whether you use a web-based contact list, contact management systems like Top Producer, Outlook, or other services.

wisconsin real estate magazine

june 2011

product showcase

The PowerMat

Effective Real Estate Sales & Marketing

Wireless Technology Innovations

Proven marketing techniques and effective technology applications

The PowerMat – a portable charging mat – uses technology first demonstrated in 2008. It can charge up to two electronic devices at the same time, with a two-position design for flexibility. It can provide upwards of four charges for most devices. The most common use for a charging mat is for cellular phones and other small, electronic devices; however some can provide charges for laptop computers.

Every real estate sale has three essential elements: planning, marketing and closing. This logical, three-stage approach to the relationship between marketing and sales is the framework for Effective Real Estate Sales & Marketing. New and seasoned agents will appreciate the extensive coverage of proven marketing techniques and effective technology applications. Information on comprehending consumer behavior, effective communication, marketplace specialization and prospecting as well as details on the uniqueness of the sale process and qualifying, presenting and negotiating offers are given. Featuring complete coverage of technology trends with real world applications throughout, Effective Real Estate Sales & Marketing will equip real estate professionals for today’s marketplace.

How it works: A PowerMat works using electromagnetic induction to charge a device, or in simpler terms, it’s a way to transfer electrical power using a shared magnetic field. If you have ever seen or used an electric toothbrush, it’s the same concept: A docking device is plugged into an electrical source (i.e. plugged into the wall) then the device is dropped into the dock to keep its charge. Consumer reviews tout the device’s ability to shut off when it senses it’s been touched, which makes it a plus for those who have children. They also comment positively on its ease of use and time-saving. The PowerMat is available at your local Best Buy and retails for approximately $129.99, however similar devices exist at a variety of other price ranges.

The WRA offers a library of more than 100 publications featuring the nation’s most renowned real estate authors. A variety of books are available, covering important subjects such as technology, marketing and sales. Books on more specific subjects like property management and real estate appraisal are also available. The WRA also offers a variety of other products, including consumer brochures, office reference materials, CDs and DVDs, and a variety of office supplies and specialty items. For more information on any of the WRA products, contact the Products Department staff. To order please visit: www.wra.org/pub118.

wisconsin real estate magazine

june 2011

www.wra.org/wrem

best of the legal hotline

legal with tracy rucka

Lake Water Quality

Radon

The buyer is thinking about buying a cabin on a small lake. He has heard about Eurasian Milfoil and wants to know more about the lake water quality before purchasing lakefront property. What should the agent tell him?

The buyer’s offer includes a radon testing contingency. The buyer heard that active radon mitigation systems are required when the radon levels are high. If the radon level exceeds 4.0 pCi/l and the seller agrees to cure, what type of system must be used?

One of Wisconsin’s greatest assets is her lakes and rivers. However, there are invasive species of plants and animals threating the health of Wisconsin waters. Although REALTORS® are not expected to become botanists and limnologists, REALTORS® should be prepared to refer interested consumers to authoritative resources to investigate water quality issues. One such publication from the Wisconsin Department of Natural Resources (DNR) is “Choosing the Right Waterfront Property” at dnr.wi.gov/org/water/wm/ dsfm/shore/documents/ChoosingtheWaterfrontProperty. pdf. The DNR maintains a list of Wisconsin lakes that have reported invasive species, both plant and animal. The list for Eurasian Milfoil is available at dnr.wi.gov/lakes/invasives/Species. aspx?species=EWM.

Whether the seller will install a passive or active system depends upon several variables including the construction of the home. The parties would be wise to consult with a radon mitigation installer to determine what type of system is appropriate for the property. A list of Wisconsin Radon Mitigation contractors may be found at www.dhs.wisconsin.gov/radiation/RadonProt/Lists/Miti%20 APRIL2011.pdf. According to the EPA, an active mitigation system has four basic elements: (1) an electric vent fan (located outside of conditioned space, i.e., in the attic, garage or outside the building envelope); (2) a system failure warning device (may also be in the basement); (3) a vent pipe running between sub-slab gravel up to above the Legal Hotline continued on Page 14

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Legal Hotline

(Continued from page 13)

multi-family units to have carbon monoxide detectors. The law includes CO detector requirements for most single-family homes and duplexes, and parallels requirements for smoke alarms for installation. For new residential construction beginning October 1, 2008, these alarms must be interconnected, continuously powered by electrical service and have a battery backup. For existing residential buildings as of October 1, 2008, CO alarms were to be installed by April 1, 2010 in buildings with any type of fuel burning appliances (batteries, electrical outlet plug-ins or wiring to the building’s electrical service are allowed). CO alarms are not required if there are no attached garages, and there are no fuel-burning appliances or all fuel burning appliances are “sealed combustion” and are under warranty or annually inspected for CO emissions. Owners of older construction homes can comply with the law by installing plug in CO detectors. If the property has plug in CO detectors the offer may be drafted to state whether they will remain with the property after the sale. The WRA has updated the RECR to include disclosure about CO detectors. For additional information, see the DHS Carbon Monoxide fact sheet at dhs.wi.gov/eh/ChemFS/fs/CO.htm and the CO alarms brochure at commerce.wi.gov/sb/docs/SBPubCarbMonoBroch209.pdf.

Gas Station Property The broker is considering listing a property that used to be an old service station. How does the broker address the fuel tanks and avoid liability for the buyer and the seller? roof or eave and (4) sealed and caulked cracks and joints. A passive system (installed at the time of construction) has: (1) a vent pipe extending from the sub-slab gravel up to above the roof or eave and (2) a physical barrier (polyethylene membrane) between the soil and house foundation. The EPA has published a new Consumer’s Guide to Radon Reduction, available at www.epa.gov/radon/pubs/consguid. html#reductiontech. Also see the Home Buyer’s and Seller’s Guide to Radon at www.epa.gov/radon/pubs/hmbyguid.html#6.

Carbon Monoxide Detectors Is there a requirement for single family homes to have carbon monoxide detectors permanently installed? The buyer has an accepted offer on an older home where the seller installed plug-in CO detectors on all levels. At the walk through the buyer noticed the seller had removed the CO detectors. Must the seller replace them? Beginning February 1, 2011, Wis. Stat. § 101.647 requires virtually all homes to have carbon monoxide detectors. The law expands coverage beyond the April 1, 2010, requirements for all

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At the time of the listing the broker may ask the seller to complete a written statement regarding property condition, such as the WRA Seller Disclosure Report – Commercial. The seller would be asked to disclose any known defects or contamination and the status of any remaining or removed fuel tanks. The parties may check with the Department of Commerce to determine if there are any tanks in the DCOMM tank database. See information at commerce. wi.gov/ER/ER-BST-HomePage.html. The seller may wish to confer with his attorney regarding strategies for reducing or eliminating seller liability. Likewise the buyer may be referred to legal counsel, the EPA, the DNR and the Department of Commerce. The buyer’s attorney may recommend that the buyer’s offer include appropriate testing or inspection contingencies. The attorney might recommend, for example, that the buyer include contingencies for both Phase I and Phase II Environmental Assessments. Both attorneys may give advice about the how the parties might allocate the risk of environmental contamination. In addition, before drafting an offer, the buyer may consult with the lender to determine what documentation or evidence will be needed in order for the buyer to qualify for financing for the purchase of this property.

www.wra.org/wrem

More information is available at the DNR website, dnr.wi.gov/ org/aw/rr/cleanup/petro.htm. While discussing a possible vacant land listing, the seller said they were told there was a landfill located nearby. However, she did not know exactly where it was because it has since been filled in. Is it incumbent upon the agent to disclose this as an adverse material condition on the Real Estate Condition Report should it be true? The seller client completes the RECR – not the licensee. The seller should discuss any questions about the seller’s obligation to disclose with his or her attorney – not the agent. The seller’s disclosure is based on the definition of defect contained in the RECR. If after consultation with her attorney the seller decides not to disclose the landfill, whether the possibility that a landfill may have existed in the area constitutes a fact the agent needs to disclose as an adverse material fact is a judgment that only the agent can make after considering all of the facts and circumstances in the situation. Agents make their disclosures in a letter or some other form, not in the RECR. If the agent, as a competent licensee knows that a possible landfill (1) has a significant adverse effect on the value of the property; (2) significantly reduces the structural integrity of the property; (3) presents a significant health risk to the occupants of the property or (4) is information that indicates that a party to the transaction wisconsin real estate magazine

june 2011

is not able to or does not intend to meet their obligations under the contract, then the possible landfill constitutes an adverse fact. If a party to the transaction was to so indicate or if a competent licensee would generally recognize that the possible landfill is of such importance that it would affect a reasonable party’s decision to enter into a contract or would affect the party’s decision about the terms of the contract, the fact is both adverse and material. If the possible landfill is both adverse and material then Wis. Admin. Code § RL 24.07(2) requires the agent to timely disclose the possible landfill in writing to all parties to the transaction, even if the client would direct the agent not to disclose. See the list of landfills licensed by the DNR at dnr.wi.gov/org/ aw/wm/faclists/WisLic_SWLandfills.pdf and additional landfill information at dnr.wi.gov/org/aw/rr/rbrownfields/historic_fill. htm. A sample material adverse fact disclosure letter is available in on page 26 of the October 2009 Legal Update, “Diligent Disclosure,” at www.wra.org/LU0910 or on ZipForm. See the October 2009 Legal Update, “Diligent Disclosure,” at www.wra.org/LU0910 for further discussion of licensee disclosure obligations. See the list of landfills licensed by the DNR at dnr.wi.gov/org/aw/wm/faclists/ WisLic_SWLandfills.pdf and additional landfill information at dnr.wi.gov/org/aw/rr/rbrownfields/historic_fill.htm. Tracy Rucka is Director of Professional Standards and Practices for the WRA.

legal

Uncovering the Truth: “As Is” Transactions The Third Installment in a Series of Articles Dispelling Real Estate Myths

By cori lamont

In this third piece about real estate myths, I have chosen to write about something that is commonly confused; especially in a world where foreclosures, estates, trusts and bank-owned properties are recurring real estate transactions. And so, this month the focus is on “as is” transactions.

n “as is” clause may be used in the offer to purchase for any type of property. The reason why a seller may choose to use this type of clause may vary from financial constraints on the seller’s ability to commit any more funds to repairs, to environmental or other problems the seller does not want to confront, to an elderly person who is physically or mentally unable to deal with the situation. In other words, there are no limits on who may use an “as is” clause or on the type of property that may be involved. Generally, an “as is” clause means that the seller (1) will not complete a Real Estate Condition Report (RECR) or other seller condition reports, leaving the buyer primarily responsible for determining the condition of the property being purchased, and (2) will not repair the property or “cure any defects.” Typically an “as is” clause also alerts the buyer that he or she is responsible to determine the condition of the property being purchased.

wisconsin real estate magazine

june 2011

The folklore of “as is” urban legends are plentiful. However, the widespread tales, or a derivative there of, fit into one of the following five urban legends. URBAN LEGEND # 1: A SELLER SELLING A HOME “AS IS” IS NOT REQUIRED TO MAKE ANY DISCLOSURES The Truth: While the seller may believe deciding to sell “as is” is as easy as playing the game Monopoly®, the use of an “as is” clause is not necessarily a seller’s “Get Out of Jail Free Card.” The seller may still need to make some disclosures about the property. 1.

Seller cannot create risk: The seller has the duty to exercise ordinary care in refraining from any act which would cause foreseeable harm to another or create an unreasonable risk to others.

www.wra.org/wrem

Seller cannot conceal or prevent discovery of defects: the seller may be liable for misrepresentation if he or she actively conceals a defect or prevents a buyer from investigating the property and discovering the defect.

Seller cannot make false affirmative representations: the seller may be liable if he or she makes false affirmative statements about the property.

Seller must disclose defects that are difficult to discover: the seller may be liable in an “as is” situation if he or she fails to disclose material conditions which the buyer is in a poor position to discover.

Thus the use of an “as is” clause is not always going to be an escape for the seller from all disclosures. URBAN LEGEND # 2: WHEN LISTING AN “AS IS” PROPERTY A LISTING AGENT IS NOT REQUIRED TO MAKE DISCLOSURES The Truth: The fact the seller is choosing to sell “as is” does not eliminate the listing agent’s duty to disclose. Wis. Admin. Code § RL 24.07 requires licensees to disclose potential material adverse facts to the parties in writing and in a timely manner. In fact, where the buyer is purchasing “as is” it is very important for the buyer to know the condition of the property. Generally, the buyer has professionals inspect the property as a condition of the offer to purchase, but this does not excuse the agent from his or her duty to assure that all known and information suggesting material adverse facts are disclosed in writing to the buyer. URBAN LEGEND # 3: THE LISTING AGENT IS NOT REQUIRED TO INSPECT THE “AS IS” PROPERTY The Truth: License law requires all licensees to inspect the property by performing reasonably competent and diligent property inspections; regardless of the type of property or if it’s being sold “as is.” § RL 24.07(1)(b) requires listing brokers to inspect the property prior to executing the listing and make inquiries of the seller on the condition of the structure, mechanical systems and other relevant aspects of the property as applicable. The rule also states licensees shall ask the seller provide written responses to the licensee’s inquiry. Generally, this response takes the form of a RECR or a seller disclosure report. However, when a seller refuses to complete a report and sell “as is,” best practice for the listing broker would be to obtain written evidence that the licensee asked about the condition of the property and the seller refused to answer. The WRA Seller’s Refusal to Complete Condition Report form (SRR) could serve as that written evidence. URBAN LEGEND # 4: A SELLER OF A PRE-1978 “AS IS” PROPERTY IS EXEMPT FROM THE LEAD BASED PAINT DISCLOSURES The Truth: Lead-based paint (LBP) disclosure requirements are not waived with an “as is” sale. Licensees are required to assure lead based paint disclosures are properly made. As of December 6, 1996, no offers on residential housing built prior to 1978 can be accepted without the LBP disclosure.

wisconsin real estate magazine

june 2011

This disclosure requirement is independent of the RECR law. The penalties for noncompliance with the LBP law are federal and apply not only to the seller, but also to the real estate agents involved in the transaction who must ensure compliance. URBAN LEGEND # 5: IF A BUYER IS WRITING AN OFFER ON AN “AS IS” PROPERTY THE BUYER IS PROHIBITED FROM WRITING AN OFFER CONTINGENT ON A HOME INSPECTION CONTINGENCY The Truth: While it is common for an “as is” seller to counter out an inspection, the buyer is not prohibited from including an inspection contingency in the offer. If the buyer did not include this contingency, then the buyer would be buying the property “as is.” An inspection contingency would generally give the buyer the option to back out of the offer if the defects were so bad that the buyer no longer wanted the property. “As is” language does not prevent inspection contingencies. It simply means that if the buyer goes through to closing, and defects are later found, they cannot go back to the seller for any compensation. The buyer is solely responsible for determining whether the property is in acceptable condition. Cori Lamont is Director of Brokerage Regulation and Licensing for the WRA.

legal

Offer Provisions to Ensure a Healthy House By debbi conrad

The United States Department of Housing and Urban Development is emphasizing the importance of giving families in America the opportunity to live in a home that is both affordable and healthy in its “Healthy Homes” campaign. HUD wants to ensure homeowners have safe, decent and sanitary housing as a means for preventing disease and injury as well as enhancing the homeowner’s quality of life and the overall well-being of the community.

EALTORS® recognize the path to a healthy home begins when the home is purchased. A purchaser wants a home that is free from environmental dangers and contaminants. Buyers don’t want to purchase homes with indoor air pollutants caused by oven cleaner, cigarette smoke or mold or other lurking dangers that cannot be seen or smelled like carbon monoxide or radon. Other possible health risks within a home may come from the paint on the walls. REALTORS® can help homebuyers investigate and alleviate many of these potential indoor environmental hazards.

Mold Mold is everywhere and there is no practical way to keep it out of a home. Mold grows naturally, particularly in warm, damp, humid conditions where there is little air movement. Some mold can be very harmful and make allergies or asthma worse. Flooding or water leaks, spills from bathtubs or showers, condensation and other sources of moisture or humidity may make a home a more likely host for mold. The first thing many people want to do when they learn of a potential mold problem is have the house tested and find out what kinds and quantities of mold are present. Generally, it is not necessary to identify the species of mold. The Centers for Disease Control and Prevention (CDC), the EPA, State of Wisconsin Division of Public Health (DPH), and other experts across the country recommend against spending time and

wisconsin real estate magazine

june 2011

money for testing. One reason for this is that there are no Environmental Protection Agency (EPA) standards or other authoritative information regarding what constitutes an unsafe level of mold. Consequently, different “experts” and contractors may take samples using different testing methods, interpret data differently and recommend different measures to address the problem. Most authorities recommend a thorough inspection to determine the cause of any mold growth rather than testing. The inspector should look for visible mold growth in a property, but should also look for evidence of water intrusion and musty or other odors suggesting the presence of mold colonies. Prompt elimination of the moisture source, removal of the mold and a thorough cleaning are more useful responses, regardless of mold species or concentration. HOMEBUYER SAFEGUARDS: When there is a flood or other indicators of possible water intrusion or mold, the prudent REALTOR® will: •

Provide buyers with information brochures published by authoritative sources that explain mold and its effects on consumers.

•

Point out conditions that may indicate water problems and potential mold situations; make written disclosure of any known moisture and mold problems or conditions not disclosed by the seller in the RECR or otherwise disclosed to the parties. www.wra.org/wrem

•

Ask for the seller’s CLUE report as a valuable resource for double checking past events, such as water intrusions.

•

Use a sample mold testing contingency like the one in Legal Update 02.06 (www.wra.org/LU0206) if a buyer wants to have mold testing performed. Testing for mold does not fall within the standard home inspection contingency in the residential offer to purchase.

•

If the parties clean areas where mold is found on their own, provide them with mold cleaning instructions so they may clean the mold safely, such as at www.dhs.wisconsin.gov/eh/HlthHaz/fs/ moldclean.htm.

Mold Resources •

Existing Mold Resource Page: EnviroLand/Existing_Mold_Resource/

www.wra.org/Resources/

•

Information for water damaged homes -- Flood Hazards and Recovery: www.dhs.wisconsin.gov/flood/

Lead Lead in the home may be found in house paint and water pipes. Most problems with lead come from old lead-based paint (LBP) or lead dust that can easily poison children if they get it into their mouths or breathe it in from the air. When children swallow lead dust it can cause illness and lifelong learning disabilities and behavioral problems. If a pregnant woman gets lead in her body, it can harm her unborn baby. Many homes built before 1978 have lead paint or varnish on the walls, woodwork, windows and floors. In homes built before 1950 there is a greater chance the paint contains lead. No offers on residential housing built prior to 1978 can be accepted without a LBP disclosure giving the buyer the opportunity to conduct a LBP inspection or a risk assessment for LBP hazards. A LBP inspection tells the lead content of painted surfaces, while a risk assessment identifies any LBP hazards and provides hazard reduction suggestions. A buyer is not required to have a LBP inspection, but must be given the opportunity. A seller in general, cannot counter out a LBP inspection contingency or reject an offer solely because it includes a LBP inspection contingency. HOMEBUYER SAFEGUARDS: Include a WRA Addendum S or another LBP addendum in all offers on housing built before 1978. Make sure that the seller: •

Gives the buyer an EPA-approved information pamphlet regarding the identification and control of LBP hazards (“Protect Your Family from Lead in Your Home” pamphlet).

•

Discloses any known information concerning LBP or LBP hazards, the location of LBP and/or LBP hazards, and the condition of the painted surfaces. Peeling, chipping or cracking paint and lead dust from friction sources such as windows, doorframes and stairs are hazards if the paint is LBP.

•

Provides any records and reports on LBP and/or LBP hazards which are available to the seller (includes records and reports concerning common areas).

•

Provides the buyer with a 10-day period to conduct a paint inspection or risk assessment for LBP or LBP hazards. Parties may

wisconsin real estate magazine

june 2011

mutually agree, in writing, to lengthen or shorten the time period for inspection. LBP Resources •

May 2010 Legal Update, “Lead-Based Paint in Target Housing” at www.wra.org/LU1005.

•

A listing of certified lead professionals is available at www.dhfs. wisconsin.gov/lead/CompanyList/index.htm.

Radon Radon is found all over the United States and is the second leading cause of lung cancer. Radon gas comes from the natural (radioactive) breakdown of uranium in soil, rock and water, which gets into the air. According to EPA estimates, one in every 15 homes nationwide has a radon level at or above the recommended radon action level of 4 picoCuries (pCi/L) per liter of air. Testing is the only way to know if someone is at risk from radon. The EPA and the Surgeon General recommend testing all homes below the third floor for radon. The EPA website at www.epa.gov/radon/ pubs/hmbyguid.html#3.b. states: “Make sure that the test is done in the lowest level of the home that could be used regularly. This means the lowest level that you are going to use as living space whether it is finished or unfinished. A state or local radon official or qualified radon tester can help you make some of these decisions.” HOMEBUYER SAFEGUARDS: REALTORS® will protect the homebuyer from radon concerns by: •

Giving buyers a copy of the EPA’s “Home Buyer’s and Seller’s Guide to Radon” (www.epa.gov/radon/pubs/hmbyguid.html). Healthy House continued on Page 20

Healthy House

(Continued from page 19)

•

For a new home, asking if radon-resistant construction features were used and if the home has been tested.

•

If not, including a separate radon-testing contingency in the offer to purchase. Radon testing cannot be conducted under the home inspection contingency in the residential offer to purchase.

•

Provide in the contingency the seller will install radon reduction or mitigation measures if the radon level is 4 picocuries per liter (pCi/L) or higher.

Radon Resources •

Radon Information for Wisconsin: www.dhs.wisconsin.gov/radiation/RadonProt/index.htm

•

EPA Radon Information: www.epa.gov/radon/index.html

Carbon Monoxide Carbon monoxide (CO) is a deadly gas that can come from appliances that burn gas, oil, coal, or wood and are not working as they should. If appliances that burn fuel are maintained and used properly, the amount of CO produced is usually not dangerous. However, if appliances are not working properly, are poorly vented or are used incorrectly, dangerous levels of CO can result. Hundreds of people die accidentally every year from CO poisoning caused by malfunctioning or improperly used furnaces, water heaters, gas stoves and other fuel-burning appliances.

August 8-9, 2011

Two-Day CRS210 Course Building Exceptional Customer Service Referral Business (Recently Revised)

www.wra.org/CRS

The new Wis. Stat. § 101.647 requires virtually all homes to have CO detectors beginning on February 1, 2011. All home inspectors will check for CO alarms. HOMEBUYER SAFEGUARDS: Make sure the home inspector confirms on his or her report that all required CO detectors are on the premises. Carbon Monoxide Resources •

CO alarms brochure: PubCarbMonoBroch209.pdf

commerce.wi.gov/sb/docs/SB-

•

Department of Health Services Carbon Monoxide fact sheet: dhs. wi.gov/eh/ChemFS/fs/CO.htm

These are only some of the possible environmental factors that may need to be addressed when a consumer purchases a home. As always, a REALTOR® should disclose any potential environmental concerns to the parties and assist the buyer in drafting appropriate contingencies whereby the proper credentialed experts can inspect and conduct testing to identify those hazards that need to be remediated before the house will be a safe and healthy home for the buyer.

September 13, 2011

Rock’N & Rolling

Golf Outing Join us for the WRA’s 2011 Annual Convention Golf Scramble at Wild Rock Golf Club.

HUD Healthy Homes Resources: portal.hud.gov/hudportal/HUD?src=/ program_offices/healthy_homes/healthyhomes Debbi Conrad is Senior Attorney and Director of Legal Affairs for the WRA.

wisconsin real estate magazine

june 2011

www.wra.org/ConventionGolfOuting

www.wra.org/wrem

WRA Member Benefits WRA Member Benefit Spotlight:

Insurance Benefits

ou are undoubtedly aware of the health benefits available to WRA members through REGIT … but are you aware that you can quote these benefits yourself online by going to the website www.regitinc. com/aspwra. By entering some basic information, you will be able to review all the health policies available to you along with the base monthly premium. A side-by-side comparison of different plans is also available. And you can link to brochures for more details, to apply online, or access a paper application.

The Importance of Page 1 on Google? Jeff Corbo, RealEstateHomePages.com Marketing Director

Because there are so many plans to choose from, the professionals at REGIT are available to help you find a plan that works for you or to answer any questions you have. You can reach the WRA representative – Lorraine Allen – at (800) 537.9786. Online or in person – you have a choice of how you check the cost of your health insurance.

ow often do you perform a Google search and get to the second page of results? If you are like most people, the answer is hardly ever. Try doing a real estate search on Google for your area (like Madison homes for sale). What you will find is 10 results in the Google pay-per-click area (top and right side of the results page) and 10 results for the natural search area (middle of site below the first couple paid ads). With 20 results to choose from, most with property search and features similar to your website, there is no need for a consumer to find page two of the results. If you are looking for search engine traffic then, it’s quite apparent your goal needs to be achieving page 1 placement. You can either pay Google money (hence, the term pay-per-click) or work on techniques that will optimize your site for the natural search area. This does not cost money, just research and a website that can be fully optimized. It’s quite difficult to rank for a popular term like “Wisconsin real estate” unless you are a search engine expert or know someone who is. Therefore, we suggest going after lesser searched or long-tail phrases (i.e. Sun Prairie foreclosures or Madison condos and townhomes). You will have a fighting chance for a page 1 ranking and hence, some free visits to your website. At RealEstateHomePages.com, you are given the right tools to win the day with Google. We even send you a top 10 list of things Google will like when you sign up. Hosting is just $39.95 with free setup for all WRA agents thru June. Check out what we have to offer at www.RealEstateHomePages.com or call one of our representatives at (800) 280-6926

wisconsin real estate magazine

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education

Broker Pre-License Course June 27-30, 2011

Greater Milwaukee Association of REALTORS® - Milwaukee

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

CRS 210 - Building an Exceptional Customer Service Referral Business August 8-9, 2011 WRA Headquarters - Madison This is a highly interactive course that has been revised an updated to deliver all the essentials for refocusing students’ business plan to a customer service-centered, repeat and referral business. Information provided in the course will help identify the expectations of the new consumer and new behaviors necessary to meet those expectations.

Real Estate Marketing Reboot - ABR® Elective September 13, 2011 Wisconsin Dells

Uniform Appraisal Dataset (UAD) Program Course August 11, 2011 - WRA Headquarters - Madison August 17, 2011 - WICPA, 235 North Executive Drive - Brookfield August 25, 2011- REALTORS Association of Northeast WI ®

Appleton The Uniform Appraisal Dataset (UAD) program was announced in December 2010. To improve the quality and consistency of appraisal data on loans delivered to the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, at the direction of the Federal Housing Finance Agency (FHFA), have finalized the development of the UAD, which defines all fields required for an appraisal submission for specific appraisal forms and standardizes definitions and responses for a key subset of fields.

Do you think the marketing plans and strategies you used at the height of the real estate market boom work as well for you today as they did then? Think again. It’s time to reconsider how you promote yourself and attract new business, or a real estate marketing REBOOT. In this one-day course, you will revisit marketing fundamentals, branding, relationship marketing with an emphasis on electronic tools, social media, blogs, Twitter, podcasts, really simple syndication (RSS) feeds and website search engine optimization (SEO), among other technologies. Practical tips and examples of agents leveraging these tools in the field make this course a must for all real estate professionals.

For appraisals with an effective date (date of inspection) on or after September 1, 2011, the appraisal report must be completed in compliance with the UAD for conventional mortgage loans sold to Fannie Mae or Freddie Mac. These include all appraisals completed on forms:

Positioning Properties to Compete in the Market (Staging) - CRS Elective September 13, 2011

Real Estate Social Marketing Strategies for Success Both Online and Offline - CRS Elective September 14, 2011

- Uniform Residential Appraisal Report (1004 and 70) - Individual Condo Unit Appraisal Report (1073 and 465) - Exterior-Only Inspection Individual Condo Unit Report (1075 and 466) - Exterior-Only Inspection Residential Report (2055)

Wisconsin Dells

Staging is receiving national attention as an established trend in real estate. Now is the time to develop the knowledge and skills to integrate staging into your business. This course is an in-depth study of the staging process designed to integrate staging and pricing and develop strategic marketing skills. Created by Martha Webb, author and producer of Dress Your House for Success, this course will help you take control of the staging movement. Building new skills to offer sellers a proven method of optimizing price and minimizing market time will add value to your services.

This course will focus on how to:

wisconsin real estate magazine

june 2011

•

Develop a social marketing plan to turn fans and followers into real estate transactions.

•

Harness the power of thought leadership.

•

Turn social networking into a major profit center through Facebook, YouTube, LinkedIn and Twitter.

•

Leverage your visibility and credibility with a content-rich video.

www.wra.org/wrem

Course Schedule

Visit wra.org/CourseSchedule for full schedule.

Sales & Marketing Management Date Course Thru 8/1 8/22 After 8/22 ATD

September 26-27, 2011

* Plus cost of books. ** Early registration applies two weeks prior to the August 8-9, 2011 start of the course. *** Wisconsin CRS members receive a $20 discount.

2-Day ABR Designation Course *260 *270 *Deduct $30 from registration fee due to Special Offering by REBAC. CRS 210 ***285 ***295

*290 ***315

Conference and Conventions Date Event Location September 13-15, 2011 WRA Annual Convention Wisconsin Dells Early registration applies two weeks prior to the start of the course

September 13, 2011 September 13, 2011 September 14, 2011

ABR Elective: Real Estate Marketing Reboot CRS Elective: Positioning Properties to Compete in the Market CRS Elective: Real Estate Social Marketing Strategies for Success both Online and Offline Both CRS Electives (9/13 and 9/14) includes convention ABR and one CRS Elective (9/13 and 9/14) includes convention

Real Estate Continuing Education

Date

Course

Location

2009-2010 real estate continuing education is still The available by: On Demand – DVD – Self-Study Booklets Course 1 – Listing Contracts Course 2 – Offer to Purchase Course 3 – New Developments Course 4 – Buyer Agency Agreements Elective A – Risk Reduction Elective B – 1031 Exchanges and Exchange Opportunities Elective C – Condominiums Elective D – Landlord/Tenant and Property Management Elective E – Financing Elective F – Broker Supervision

June 7, 2011 June 22, 2011 July 27, 2011 August 4, 2011 August 10, 2011 August 11, 2011 August 18, 2011 August 18, 2011 August 24, 2011

2011-12 Elective A 2011-12 Elective C 2011-12 Elective A 2011-12 Courses 2 & 1 2011-12 Courses 2 & 1 2011-12 Courses 4 & 3 2011-12 Courses 4 & 3 2011-12 Electives B & A 2011-12 Electives B & A

Racine Racine Sheboygan Brookfield Madison Brookfield Madison Brookfield Madison

QuickStart www.wra.org/QuickStartOnDemand

wisconsin real estate magazine

$195 $195

$205 $205

$225 $225

$185

$195

$205

$225

$330

$340

$350

$370

$330

$340

$350

$370

262-554-3940 262-554-3940 920-457-7908 800-279-1972 800-279-1972 800-279-1972 800-279-1972 800-279-1972 800-279-1972

$27/m;$35nm $27/m;$35nm $27/m;$35nm $27/m;$35nm $27/m;$35nm $27/m;$35nm

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

Appraisal Continuing Education Date August 11, 2011 August 17, 2011 August 25, 2011 September 15, 2011 Pre-License * Plus books Available online! sales training program

$185 $185

Course

Uniform Appraisal Dataset (UAD) Program Course Madison Uniform Appraisal Dataset (UAD) Program Course Brookfield Uniform Appraisal Dataset (UAD) Program Course Appleton HUD/FHA & USDA Rural Appraisal Standards Wisconsin Dells Submitted for WI Appraisor & Assessor. Michigan & Minnesota Approved.

Date Course Location Member June 27-30, 2011 July 18-21; 25-28, 2011 Aug. 1-4, 2011 Oct. 3-6; 10-13, 2011 Oct. 31-Nov. 3, 2011

june 2011

Location

Broker Pre-License Course Sales Pre-License Course Broker Pre-License Course Sales Pre-License Course Broker Pre-License Course

Milwaukee Madison Madison Madison Madison

$260* $325* $260* $325* $260*

Non-Member $280* $325* $280* $325* $280*

Realtor® sales tip

The Rules: Truths about the Real Estate Business By marcus a. wally

ecently I brought on a few new agents and as the founding broker of our team, it is up to me to help them step out on the right

foot.

Real estate is the ideal profession for self-starters, as well as anyone who doesn’t want to be confined to a cubicle all day or report to three different bosses. Best of all, it’s for those who are motivated by the fact that unlike a salaried employee, there’s no limit on how much money you can make. But being your own boss isn’t as easy as it sounds. Many people enter the real estate business with the goal of building a thriving enterprise and becoming a financial success, yet they fail to envision all of the hard work and discipline that’s required to achieve such a victory. One of the most important lessons I emphasize with my new hires is to follow the rules of the trade. Real estate is like cooking - if you follow the recipe, the meal turns out properly. If you take short cuts or substitute ingredients, your meal may not be a hit. This month, I want to share a proven system to ensure your best chances of becoming successful. Follow these time-tested tips for thriving in today’s market and you will have a productive real estate career: 1. Don’t follow others who are not where you want to be in terms of net worth, happiness, family, fun and peace. Be strong and develop your own rules for success. 2. Spend time learning a customer’s motivation. This is the single most important factor to remember. It doesn’t matter how good you are, if a buyer or seller isn’t motivated, there is nothing you can do to convince them otherwise. Find out the customer’s level of motivation as fast as possible because your most valuable asset is time. 3. Don’t be suckered into purchasing anything

wisconsin real estate magazine

that is being sold to you as a guarantee. I am always fearful of anyone who is trying to sell me something with the statement, “This will solve all your real estate problems.”

8. No matter what happens, the customer is

4. You must keep your fishing pole in the water for at least two hours a day. Prospecting is the number one use of our time. The best use of your time is to be in front of others, face to face. Our number one priority is to meet new people and ask them if they have the need to buy or sell real estate. Everyone does, so ask!

But, the customer is always the customer!

5. Never let your local market’s size be an excuse for failure. I live in a small town (St. Augustine, Fla.) and although I must set my goals in line with the market, I never allow my small town to set my boundaries. My average sales price is not close to that of California or Hawaii, but I make the best of it. There is still plenty of business in my town to provide a very good living for my family and me.

with one young buyer who was so tough on

6. Allowing buyer occupancy prior to closing is a mistake you will only make once. No matter how your heart strings get pulled, stay firm on this rule. Do not allow anyone at any time to move into a property prior to closing. Sometimes I feel like the meanest man on the planet, but the rule is the rule and when you detour from the rule you expose yourself to trouble. 7. Always get a large, good-faith binder deposit. Most buyers are not aware of what is customary to put down to show good faith to the seller. But speaking from experience I know offers with large binders are more likely to close than offers with $500 down. My rule is 3-5 percent of the sales price. This shows commitment on the buyer’s part and if you should get into a multiple offer situation, your offer could be chosen simply because of the escrow deposit. However, depending on the type of financing (FHA or VA) I bend my rule.

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always the customer. We often hear, “The customer is always right,” but I don’t like that because we know the customer is not always right.

9. The value remains long after the price is forgotten. This is one of my cardinal rules and it is so true. Missing out on a particular property because of a very small amount of money is not a good business decision. I recently had to get strong wanting to get a good buy, we almost lost the home. I had to remind him of the long term value and not to get bogged down in the hype of buying cheap. Just because it is a foreclosure does not mean you can steal a property. Many times these properties are already fairly priced. Stick to this rule and watch your bottom line grow! 10. Understand the customer’s needs, offer solutions, ask for their business and overcome objections - all in one sitting. Empathy is critical - help solve the challenge (never call them problems), always ask for their business - we must ask for the order and be a solid thinker and figure out how to take a challenging situation and make it better. 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. He earned his MBA from the University of North Florida in Jacksonville. He can be reached at (904) 669-1081 or by e-mail at marcus@newworldrealty.com. www.wra.org/wrem

legislative

By tom Larson

Pier Registration Deadline Extended for Another Year

n May 11, 2011, the Wisconsin Legislature passed Senate Bill 59, which extends the pier registration deadline until April 11, 2012. Governor Walker has indicated he will sign the bill into law very soon.

Background In 2004, lawmakers adopted new dimensional standards for piers. While these new standards were intended to apply only to new piers (those installed for the first time after 2004), some regulators attempted to apply them retroactively to existing piers. As a result, thousands of existing piers could have been declared illegal and been forced to be removed or downsized. In 2007, Wisconsin lawmakers passed a law (2007 Wisconsin Act 204) that grandfathered 99 percent of existing piers from new pier dimensional standards. The new law contains three size classifications of existing piers – small, medium and large. Owners of small piers do not require a permit or need to be registered, and owners of medium-sized piers must register with the Department of Natural Resources (DNR). Owners of large piers must obtain a permit from the DNR. To qualify for grandfathering, a medium-sized pier must meet the following requirements: •

Date – must have been originally placed prior to February 6, 2004

•

Width – no more than 8-feet wide

•

Platforms – a larger deck/platform is allowed as long as it is located at the lakeward end of the pier and the platform has a surface area of:

If a property owner fails to register a mediumsized pier by the deadline, the pier will not be grandfathered and it must be downsized or replaced entirely to be brought into compliance. In some cases, this could be a significant expense to the property owner.

Number of Boat Hoists The most common reason for a property owner to register a pier isn’t the size of the pier or the platform, but the number of boat slips or hoists. Under the pier regulations adopted in 2004, a pier is allowed two boat hoists for the first 50 feet of water frontage and one additional boat hoist for each additional 50 feet of water frontage on the property. The pier grandfathering standards, however, focus exclusively on the size of pier and platform, but do not place any limits on the number of boat hoists. Therefore, if a pre-2004 pier has more boat hoists than what is allowed under the law adopted in 2004, the owner of the pier can grandfather the current number of slips by registering the pier with the DNR.

Spreading the Word

•

200 sq. ft. or less (may be any width), or

•

Between 200 sq. ft. and 300 sq. ft, if the deck/platform is no wider than 10 feet.

Now that the pier registration deadline is extended for another year, REALTORS® should continue to educate waterfront property owners about the need to register certain piers with the DNR. By registering their pier, a property owner will have certainty that their pier is compliant with state law and will avoid possible future enforcement actions by the DNR. Moreover, when the property owner tries to sell the property, the owner will have documentation from the DNR indicating the pier is grandfathered, which will likely be important to prospective purchasers of the property.

Registration deadline – must register with the DNR by April 1, 2011.

For more information, please contact Tom Larson (tlarson@wra.org) at (608) 240-8254.

The DNR estimates 10,000 property owners were required to register their piers by April 1,

Tom Larson is Chief Lobbyist and Director of Legal and Public Affairs for the WRA.

•

wisconsin real estate magazine

2011 in order to be grandfathered. However, only four to 5,000 registrations were received by the April 1, 2011, deadline.

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legislative

Autumn Drussell photos

The Importance of Being at the (Political) Table

here’s an old political saying that if you’re not at the table you’ll be on the menu. That’s why seeing some 600 REALTORS® streaming into the capitol in Madison last month was so heartening. They were participating in a highly effective WRA traditional of being at the table with lawmakers to discuss key real estate issues before decisions are made – better known as REALTOR® and Government Day.

By Michael theo

For over three decades, REALTORS® from every corner of the state have taken a day to travel to Madison, listen to top state officials and legislative leaders, be briefed on pending real estate related issues, then take to the capitol to meet with their individual lawmakers and staff to discuss issues of importance to our industry and the homeowners and property owners we represent. Given the political turmoil and tough budget issues being debated in Madison today, making the trek to capitol this year was both exciting and challenging. Attendees this year heard directly from key state leaders about enormously consequential issues including the pending state and federal budgets, which both

wisconsin real estate magazine

june 2011

www.wra.org/wrem

have a direct and indirect, immediate and long-term, impact our business and our state. These leaders included Governor Scott Walker, Chairman of the House Budget Committee Congressman Paul Ryan, Assembly Speaker Republican Jeff Fitzgerald and Assembly Democratic Leader Peter Barca.

licensees in a more effective and responsive manner, while continuing to ensure consumers are fully protected. •

Maintaining and tightening property tax levy limits. The pending state budget bill proposes to cap property tax levies in Wisconsin to protect property owners from potentially significant tax increases resulting from cuts in state aids to local governments. While these limits will create difficult short term revenue decreases for schools, counties and municipalities, they are necessary to protect housing affordability and the societal benefits of homeownership and thus are supported by the WRA.

•

Creating a new vacant land condition report. This separate, non-budget bill would require sellers of vacant land to complete a vacant land condition report at the time of sale, similar to the current form required by sellers of 1-4 family dwellings. The WRA supports this legislation because sellers are in the best position to know about any adverse conditions, obligations, penalties or programs assigned to the property. Under the proposed law, if a seller fails to make the necessary disclosures, a buyer may have the ability to rescind an Offer or may sue the seller, depending upon the nature of the disclosure.

•

Extending the deadline to register piers. Lawmakers are currently considering bipartisan legislation that would extend by 12 months, the deadline for registering piers with the DNR. (Assembly Bill 73 and Senate Bill 59.) The WRA supports this legislation because the pier registration deadline has recently expired and thousands of existing piers that were not registered could be forced to comply with new standards meant to apply only to new piers. This could result in piers being forced to downsize or even be removed.

To all those who made the trip, thank you! The personal, constituent lobbying you conducted, along with the information you distributed and discussed, will help lawmakers understand the importance of our issues, industry and association. To those of you who didn’t or couldn’t make the trip – thank those who did. Their commitment will help your business. Our issues this year focused on the controversial state budget currently being debated in the state capitol, and several key provisions that directly impact real estate professionals and property owners in Wisconsin. Here’s a summary of the issues we discussed: •

•

Keep housing impact statements. The pending state budget contains a provision to eliminate an existing requirement that the Department of Commerce prepare a report regarding the effect of any proposed administrative rule on housing before the rule is sent to the legislature. The WRA is asking lawmakers to remove this provision and thus keep current law. We support this law because Wisconsin’s economy is dependent on a strong housing and real estate industry and lawmakers need to know the impact of proposed rules on this vital sector of our economy. Eliminate the farmland conversion penalty. The state budget contains a provision repealing the current penalty assessed on farmers who rezone their property. The WRA supports this repeal because current law decreases the value of farmland; increases the cost of development; and fails to recognize the important balance needed between protecting farmland and providing other types of land uses, namely residential and commercial development. Creation of a new Real Estate Examining Board. The state budget proposes to replace the existing Real Estate Board in the Department of Regulation and Licensing, with a new Real Estate “Examining” Board. The WRA supports this change because the new board will assume many important duties currently vested with the Department Secretary and will thus improve the regulation of wisconsin real estate magazine

june 2011

It’s never too early to start making your plans to attend next year’s REALTOR and Government Day. The event will be held once again in Madison on March 28, 2012. The table is being set as we speak. * Author’s note: Since Government Day, repeal of the farmland conversion penalty has passed an important committee vote and the pier registration bill has passed the full legislature.* Michael Theo is Senior Vice President of Legal and Public Affairs for the WRA.

legislative

Our Policy Agenda in

Unsettled Political Times

n November 2008, voters clearly decided they were unhappy with the direction of the country and voted to change the political landscape. They elected Democrat Barack By joe murray Obama as president, and put large Democratic majorities in charge of both houses of Congress and in Wisconsin, both houses of the Legislature. In November 2010, as they did in 2008, taxpayers voted to change the political landscape. They put Republicans in charge of the House of Representatives, elected a new Republican governor in Wisconsin and large GOP majorities in both houses of the Wisconsin Legislature. With voters expressing two distinctly different opinions on who should be in charge over backto-back elections, policymakers have a difficult and unsettled task ahead of them. The federal government is divided. Republicans control the House while Democrats control the Senate and White House. In Wisconsin, Republicans control both houses of the Legislature and the Governor’s office. But nine recall elections underway in the State Senate threaten to displace the GOP single party power structure currently in place. How does all this uncertainty affect our issue agenda? A few observations are in order.

Congress Accomplishing legislative goals in the divided Congress is far more difficult than passing legislation when one party controls the entire process. The National Association of REALTORS® (NAR) is working on important issues that matter to our members and homeowners, in an environment that presents a real challenge to getting anything accomplished before the 2012 elections. Take the mortgage interest deduction (MID). In 2010, the President’s National Commission on Fiscal Responsibility and Reform (the Deficit Commission) issued a report identifying tax and spending changes to reduce the deficit. This report called for eliminating the MID for second homes and reducing the amount of allowable

wisconsin real estate magazine

mortgage debt from $1 million to $500,000. It further proposed to convert the deduction to a 12 percent tax credit. In the Republican-controlled House, Budget Committee Chair Paul Ryan (R-WI) has proposed a Republican budget that would overhaul the tax system and reduce the maximum tax rate from 35 percent to 25 percent, acknowledging certain tax benefits would need to be eliminated or reduced to help pay for it. In the Senate, there is no specific plan. So significant potential changes to the mortgage interest deduction is “on the table” with the President’s proposed budget, with House Republicans and possibly Senate Democrats. Divided government has the mortgage interest deduction in limbo. The NAR is working hard to remind Congress a significant change to the tax rules that apply to home ownership would damage the fragile market and cause home values to decline. The goal of NAR is to protect MID and avoid more disruption to the housing market. For many in Congress, the primary goal is deficit reduction and/or major tax reform. This may sound easy, but it isn’t. Democrats and Republicans are struggling to reach a compromise and REALTORS® and MID will continue to be a big part of the discussion.

Wisconsin Legislature The November, 2010 elections turned Wisconsin government from blue to red. Republicans now control the process and, unless the pending recall elections swing control of the State Senate back to Democrats, the GOP has large enough margins in both houses to pass their priority legislation with or without support from minority Democrats. But what if Democrats take the Senate this summer? How could a newly-divided Wisconsin legislature effect housing or other issues important to the WRA? The good news is that many WRA housing issues are nonpartisan and receive bipartisan support. But there are a few issues that will fall into a more partisan divide, and a divided legislature could spell trouble. Start with health savings accounts, or HSAs. Democrats, in general, oppose HSAs, Republicans traditionally support them. Until Scott Walker was elected and the GOP controlled both houses, HSAs were on the

june 2011

WRA’s priority list. Once Republicans were in control they passed the legislation in 30 days and Governor Walker signed the bill into law. Given our experience over eight years, it’s entirely reasonable to assume HSAs would not have passed without GOP control of both houses and the governor’s office. Another partisan issue, especially this year, is “property tax relief.” Walker and the GOP legislature want to cut spending to reduce the $3.6 billion dollar deficit, in part by placing strict property tax levy caps on local governments and schools to keep levies from rising to offset state government aid cutbacks. Democrats oppose these spending reductions while Republicans say this is what they were elected to do. Democrats have lined up against “draconian” cuts and Republicans say they are “fixing” a long-term problem (the structural deficit) while protecting homeowners from massive property tax increases. Here again, deficit reduction and property tax relief have become partisan issues that could be impacted by a divided government. The WRA has made stable or lower property taxes a priority given lower government revenues and the size of the state spending cuts. If Republicans maintain control of both the Senate and Assembly, the tax levy caps are likely to pass. If the state Senate swings to Democrats, the levy caps will be far more difficult to pass. That’s why Republicans are moving swiftly on the state budget. They intend to pass the budget bill before the July/August Senate recall elections. These are just a few examples of how our issues can be affected by the political outcome from federal and state elections. Between now and August, Wisconsin voters will take part in an unprecedented nine recall elections that could, depending on the outcome, affect them in many ways. And REALTORS® will be a part of this historic process for one very important reason: elections have consequences, good and bad, depending on your point of view. The only bad decision is not getting involved and letting others make the decisions for you. Joe Murray is Director of Political Governmental Affairs for the WRA. www.wra.org/wrem

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he WHEDA Advantage has everything your first-time buyer needs to become a successful homeowner. Low, fixed interest rate, job-loss mortgage payment protection, down payment assistance, access to educational resources, quick loan approval and more!

Discover the WHEDA Advantage! Get your first-time home buyers into a home sooner with a mortgage they can afford long term. Income and purchase price limits apply and home buyer education is required. To learn more, go to www.wheda.com/Realtors. Wisconsin Housing AnD Economic DEvElopmEnt AutHority 201 West Washington Ave n Madison, WI 53703 800.334.6873 n www.wheda.com