May 2011 - Wisconsin Real Estate Magazine by Lauren Bizorik

Prospecting Prowess

State Budget impact on market

Tips for standing out in a crowd

Proposed regulation changes good for Real Estate

May 2011 $5.00

MAGAZINE

MASTERING the CLOSE >> Page 6

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table of contents

may

New Vacant Land Offer to Purchase is here

Sales Tip: Prospecting is the Key to Longevity

Real Estate Market Regulations Could Improve

Closings are a critical time for getting an accepted offer and finishing the deal. With a few tried and true tips, you can score a successful close.

How to seperate yourself from the masses so clients have reason to single you out. REALTORS® need to master the art of prospecting with persistence.

State proposal includes a plan to improve real estate lisence regulations. Check out this breakdown of what’s ahead.

www.wra.org/wrem

27, no. 8

articles

Mastering the Close

Revised once last year, new updates in the 2011 WB13 focus on the unique, 10-page Vacant Land Offer to Purchase report.

vol.

24 10

features

2011 |

Housing sales decline in March

A breakdown of March, 2011 housing statistics statewide and by region show the number of new listings is down 23 percent over March 2010.

Legal Hotline: Closing the details Our legal team answers your questions regarding escrow agreements, fuel prorations, closing statements, HUD-1 and search and hold.

Product Showcase Great uses for Google’s content monitoring program, Google Alerts, and the new forms available to Wisconsin REALTORS®.

WRA will Pursue Mandatory VLCR The benefits for REALTORS® to use Vacant Land Condition Reports means less reliance on the Offer to Purchase and better seller compliance.

Kloppenburg v. Prosser

A perspective on why Wisconsin’s Supreme Court race was historic in 2011, and why those races have become so polarized.

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 ® very yeartothe Wisconsin REALTORS Association Politics role in shaping the coming.” The Pewaukee-based commission has play aforvital their rental housing will double from around

hosts REALTOR® &notGovernment Estate industry, which is why this and our most conducted aDay, comprehensive review of Real housing 70,000 currently to a whopping 140,000 by 2010. year’s Wisconsin Real Estate and Economic recent event – held lastsince month – had a record patterns the 1970s. Some say a partial solution would be for the U.S. Outlook Conference focuses on partnerships number of attendees. It’s no surprise the current state government to reverse course on housing policy and Receives– are Millions Ease government and Real Estate. The event of Wisconsin’s politics – fromWisconsin leaders to proposals what tobetween substantially increase funding for rental assistance, Community Crisis is planned June 9 at the Fluno Center for Executive brought members to the event.Foreclosure It also sets the stage for a number particularly help for working families. United Way of Dane County Business (09/30/08) Education in Madison, and is done in partnership of related articles in this issue Milwaukee of Wisconsin RealJournal Estate(WI) magazine. United InWay of Dane County with$39 the UW NAR Madison School ofFree Business. The event it, our chairman, John Horning, talksofabout why it’s important The state Wisconsin is due to receive nearly Releases FHA Toolkit recognized the Stark Family to with is geared toward real estate and housing professionals, for the association advocate for our In addition, theneighborhoods million in interests. federal funds to stabilize Wisconsin REALTORS® Association (10/30/08) the 2008 Tocqueville Society on how and proposed stave off a regulation spate of abandoned According builders, developers, government and non-profit legislative team expands changeshomes. in Award for outstanding service to the Dane County NAR the WRA are eager to you meet the to HUD and Gov. Jim Doyle, the funds are separate professionals or and anyone interested in help community the state budget could impact the real estate market, and why Billcommunity Malkasian and United Way. The Tocqueville Society current challenges of the troubled economy. from approximately $9.2 million the government is development. Keynote speakers include Congressman We the State Supreme Court race was so critical this time around. WRA President Award celebrates and acknowledges people or know that you need resources that canKnetter, help you awarding the city of Milwaukee, where the foreclosure Paul Ryan; Wisconsin Gov. Scott Walker and Michael families, such as the Starks, who have a majorthen, that It should be made no surprise, national and local economy, rate the is currently 9.9 percent. HUD is awarding the andclose transactions, and you need them at little orofno president chief executive officer of the University impact on the quality of life in Dane County through fundsthe viaproposed its Neighborhood Stabilization Program, as well as uncertainty surrounding state budget and cost. NARThose has just released may an all-new FHA Toolkit Wisconsin Foundation. interested register at www. their exceptional service and commitment to the under which almost $4 billion is being allocated to budget repair bill, has influenced the housing market. With more online for FREE to help you get clients the financing bus.wisc.edu/whc2011. community. localpeople and state governmentswe forhave the redevelopment houses on the market – and less house-hunting, they need in a credit-strapped environment. It is of abandoned and foreclosed houses. In addition to one a variety conferences and workshops, the WRA to workReceives even harder. of theofmost comprehensive toolkits NAR has City Housing Authority ® offers tips on technology and legal matters, as well as new or ever produced, and it’s available to all REALTORS 100-Unit Grant Closing is certainly more challenging Sites: Not todayJust than itfor wasPersonal even five useful products and services to help members keepalso on top Milwaukee Journal Sentinel (09/25/08) Pabst, Georgia right now by visiting the link below. They haveof Connections Anymore years ago. Bob Cocoran, our feature writer in this issue, tackles the industry. launched In this issue WRE, we“NAR feature Google Alerts, a a newofpage called Helps You Navigate The city of Milwaukee’s some housing authority is dueof Mastering Minneapolis-St. Paul Business Journal (09/29/08) Grayson, of the finer points the Close. Cocoran stresses content monitoring resource that allows to find get customized the Current Economy” whereusers you can dozens of Katharine to receive $6.7 million in federal Hope VI money a successful close will occur more likely by having all your bases e-mail alerts great tailored to theand user’s specifications. It also helps products resources, like the FHA Toolkit, to build 100 new housing units. The 100 units will St.matter. Paul, Minn.-based REALTOR® Teresa Boardman covered. In other words, details professionalsfor stayfree on or topatofatheir reputation be constructed in a 2.5-mile area and will include steepown discount. Visitonline. www.Realtor. says Flickr, Facebook and other social networking 29 public housing and Communication, affordable rental being units; proactive and establishing reliable org/NARHelpsYou for links to these great programs sites make it easy to meet people whoIn might conclusion, May is shaping up to be a month of transition. nine affordable housing units for income-eligible and products. become resources will go a long way eventually toward seeing a clients. close allWhile the many way professionals As we look ahead, the WRA is exploring and investing in new families; and 62 moderately priced, open-market are usingMarcus these sites toshares make with business contacts through. In that same vein, columnist Wally products, services resources forStrong, the 2011-12 operating condominiums. HUD Secretary Steven C. Preston Homeand Loans Going Albeit a use them to conduct why prospecting is a vitaland partcompanies of generating business, and background comments, “Milwaukee’s ushousing authority has budget. Look for a member survey to come out in the second checks or recruit new workers, many simply want Bit Tighter, in Area why you always need to be prepared to seize an opportunity. demonstrated it has the leadership to lead and half of May to solicit feedback from you to help us plan for to connect with people who have similar interests. Wisconsin State Journal (10/17/08) Balousek, Marv revitalize neighborhoods and transform lives. investing in new and emerging trends and resources for the According “The hard There are plenty of opportunities for youtotoBoardman, take advantage of atsell is dead. It Cities like Milwaukee change and grow and need to Despite theparticipate. ongoing national credit crisis, property WRA. We hope you will doesn’t work door-to-door, and it doesn’t work on Convention, set for September 13-15 at the revitalize housing to makethis sureyear’s manyAnnual aren’t priced professionals say mortgage money remains available social As networks.” Boardman Kalahari Resort inhousing Wisconsin Dells. always, On the Flickr, convention is connected out.” Milwaukee is one of a half-dozen throughout southern Wisconsin to home buyers with a fellow photographer who eventually used her event that authorities nationwide toa showcase receive new Hope VIdraws more than 1,200 attendees from with solid credit. Ron Steinhofer, manager of services to purchase a home. Until next month, around the state. Attendees get to visit with exhibitors and see grants. Marshall & Ilsley Bank’s regional home lending their new products, build brand awareness and generate leads. Foreclosures Push Rents Higher, group, states, “There’s plenty of money for home Housing Study Delay It’s Frustrates also a great way to get educated. Designation courses and a Squeezing Low Income Families loans out there. It is slightly more difficult to qualify Advocates variety of electives such as social mediaPublic marketing, tips(09/21/08) from theOlson, Dan Minnesota Radio (MN) than two or three years ago, but if you have a good Milwaukee Journal Sentinel (10/07/08) Williams, Scott most successful people and even how to create a great script are credit score, a good job and a down payment, money In Minnesota’s Twin Cities, a wave of home Bill Two years after promising the ofMilwaukee metro some the courses in this year’s lineup. Visit wra.org often for foreclosures has pushed more people into the rental is available.” Steinhofer adds that banks still are area’s first major housingfrequent study inupdates three decades, on this year’s convention. apartment sector. The result is an intensifying making loans via such programs as Fannie Mae the Southeastern Wisconsin Regional Planning demand Minneapolis and St. Paul’s and Freddie Mac. Furthermore, credit standards tips fromto industry areonhelpful, we also need to rental housing Commission (SEWRPC) is While still struggling get the insiders that the vacancy remain about the same as they were six months ago, effort launched. Proponents hope the will thisstock, understand thestudy basics. In issue so wemuch coversoimportant changesrate is very low and rents are on the rise. This, in turn, means lowserve as a catalyst for improving housing meaning that qualified home buyers can get loans to the affordable Vacant Land Offer to Purchase form. Tom Larson, chief income working families face higher monthly rents opportunities throughoutlobbyist the city’s if they have the proper income verification. On the andsuburbs. directorBut of legaleven andthough public their affairsincome for thehovers WRA,at unchanging commissioners have yet to assemble advisory downside, banks have been less willing to make explains whyanthe WRA will be pursuing legislation to require 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, sellers of vacant land to complete a vacant land condition report vacancy rate has dipped from 7 percent to closer to timetable for conducting the survey. Phil Evenson, conventional financing without a down payment has (VLCR). Ultimately the goal is4 to make Average sure buyers understand percent. monthly rents over that same the commission’s executive director, said other issues indeed disappeared. However, 100 percent financing conditions that could influence their decision to purchase the 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 property, or at what price. than $850. The St. Paul-based Wilder Foundation housing advocates the most. Bethany Sanchez, Rural Development home loans. recently reviewed income data for several Twin Cities

wisconsin real estate magazine

may 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

The Wisconsin REALTORS Association has a **NEW** Member Benefit Agreement with UPS!

Robert Keefe, Chairman-Elect rkeefe@keeferealestate.com

Renny Diedrich, Treasurer rdiedrich@coldwellhomes.com

Here is what you can save with UPS:

William E. Malkasian, cae, President wem@wra.org Editorial Staff:

William E. Malkasian

•

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WRA Members currently enrolled in the UPS Savings Program must re-enroll to take advantage of this new exclusive offer. If you do not have a UPS account, UPS will set one up for you and e-mail you all the information you need to start shipping. Just take a few minutes to fill out the short application form by visiting: www.savewithups.com/enroll. To enroll use promo code NCR308. If you have any questions, call UPS at 1(800)325-7000.

Publisher

Robert Uhrina Managing Editor

Autumn Drussell

Distinguished Service Award Applications Available

Editor

Joe Leschisin

The Wisconsin REALTORS® Association at the January 1985 Board of Directors meeting established the Distinguished Service Award. The purpose of the Award is to provide recognition to those REALTORS® who have provided many years of leadership and distinguished service to the Wisconsin REALTORS® Association.

Senior Designer Wisconsin Real Estate Magazine, USPS 597-850, ISSN 1548-0526, is published monthly by the WISCONSIN REALTORS® ASSOCIATION, 4801 Forest Run Road, Ste. 201, Madison, WI 53704. Periodical postage paid in Madison, WI and additional mailing offices. An annual subscription rate of $5 is included in membership dues and a copy is mailed to every paid REALTOR® and affiliate member of the association. Nonmember subscription rate: $60. POSTMASTER: please send address changes to the WISCONSIN REALTORS® ASSOCIATION, 4801 Forest Run Rd., Ste. 201, Madison WI 53704-7337.

All current members, local association executives and employees of the Wisconsin REALTORS® Association with at least five years of membership or employment are eligible. The application deadline is June 30, 2011. Applications are available on the WRA website at: wra.org/DSDaward.

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.

Nationwide Open House Weekend

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.

The National Association of REALTORS®, the Wisconsin Association of REALTORS® and your local association of REALTORS® are partnering to bring you Nationwide Open House Weekend. Open houses open doors to buying opportunities, so what could be better than a weekend full of open houses, encouraging people to tour homes and learn more about the benefits of home ownership? That’s the promise of the 2011 REALTOR® Nationwide Open House Weekend June 4-5.

The Nationwide Open House Weekend offers buyers a stress-free way to visit homes for sale in different neighborhoods where they might want to live. For sellers, the weekend provides a high-visibility effort to promote traffic and drive home sales.

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

What can you expect? Plan to join this historic event by holding open houses on June 4-5. REALTOR® efforts will be advanced by: Promotional support from your state and local association of REALTORS®, including news releases, media advisories, radio advertising and limited print advertising.

REALTOR® NATiONWidE

Open

HOuse WEEkENd

June 4-5, 2011

Join REALTORS® coast-to-coast for this two-day event

A brief article you can customize and use in your own newsletter/website. to help promote the benefits of home ownership and highlight the value of working with a REALTOR®.

Blue REALTOR® balloons to display at your open houses to increase their visibility ***(For information on where to get your balloons, call Barabara Matthopoulos at The REALTOR® Nationwide Open House Weekend (312) 214-5511).***

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

provides a great opportunity to have an open dialogue

Stay tuned for more information.

may 2011

with consumers about housing issues that matter most.

Chairman’s Corner

John P. Horning

o far, 2011 has been a year dominated by political and legislative news. Special elections, recall elections and contentious budget debates at the state and national levels have all grabbed headlines and framed the context in which we engage our issues. The issues at stake are important to the future of our state and nation, so it is important for us as REALTORS® to be informed and involved. We need to be advocates for the interests of our profession, but more importantly, for the interests of home and property owners. Our mission requires that we be leaders and work together in addressing the issues affecting our industry. The WRA’s Mission Statement reads: “The Wisconsin REALTORS® Association is the leader in addressing and communicating the issues and trends affecting the state’s real estate industry. Working in partnerships, it provides professional services and support which enhance the success of real estate professionals.” This year’s REALTOR® and Government Day in Madison was a great example of member involvement and commitment to this mission. Our annual lobbying day was sold out several weeks in advance. Some 600 REALTORS® gathered to learn more about pending issues, listen to the Governor and legislative leaders, and walk to the Capitol to meet with their own lawmakers and discuss our issues. It was the perfect time to thank the legislators for their past work and to inform them of important pending issues. On behalf of the WRA leadership team, I want to thank each of you who attended. Our lobbying efforts also included our congressional delegation and

wisconsin real estate magazine

may 2011

very important federal issues now pending in Washington D.C. In early April we had an opportunity to meet with US Rep. Paul Ryan from Janesville, Chairman of the House Budget Committee. Our primary goal was to advocate for maintaining the Mortgage Interest Deduction. Congressman Ryan was receptive to our message. We also discussed our concerns over the future of the GSEs (Fannie Mae and Freddie Mac) as well as issues with certain provisions of the Dodd-Frank Act, the major financial industry reform law adopted last year. We plan to visit again with Congressman Ryan and the rest of our congressional delegation when we return to Washington for NAR’s midyear meetings in May. We expect another strong showing of Wisconsin REALTORS® to make the trip to D.C. for these important meetings. Speaking of NAR, we are delighted to have Vicki Cox Golder, Immediate Past President of NAR, join us at our Board of Directors’ meeting on May 6. She will update our Board on the latest programs and initiatives of the National Association of REALTORS®, including key pending issues as well as the REALTOR® Party Political Survival Initiative. Regarding national issues, our industry faces numerous threats, including: 1.

Retention of the Interest Deduction,

Mortgage

Winding down Fannie Mae and Freddie Mac,

Shrinking FHA by increasing fees and lowering limits,

Extension of the National Flood Insurance Program,

Dodd-Frank Act restrictions on affiliates and seller financing; and

Definition of Qualified Residential Mortgage (QRM) requiring 20 percent down.

These changes could have a major impact on housing and the availability of mortgage financing. As a longtime member of NAR’s leadership team, Vicki will give us great insight to the status of these issues and what we can do to help. Regarding the Political Survival Initiative, this revolutionary “game changer” program is designed to address the new political realities created by the U.S. Supreme Court’s “Citizens United” decision last year, which opened up new doors for political and legislative advocacy and campaign financing. The NAR directors will vote on this $38.8 million program and how to fund it at the May meetings in Washington. The funds and programs are designed to benefit not just NAR, but every state and local association as well. As you can see, we live in challenging times with key legislative issues pending here in Wisconsin and in Washington D.C. With 13,000 REALTORS® in Wisconsin, we must invest in educating ourselves on the issues; invest in effectively advocating to state and federal policymakers; and invest in remaining a unified, cohesive voice for property owners everywhere. As we saw at REALTOR® & Government Day, we all work best when we all work together. You can be proud to be a member of the WRA. We truly live out our mission as the leader in addressing issues affecting the Wisconsin real estate industry and working together to enhance the success of real estate professionals. Enjoy your spring!

John P. Horning www.wra.org/wrem

news monthly wisconsin housing report

Home Sales and Prices Fall in March By David E. Clark, Economist, C3 Statistical Solutions Inc.

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

> WISCONSIN HOUSING STATISTICS MONTHLY ACTIVITY - MARCH 2011

% Change

YTD-2011

YTD-2010

% Change

-23.1% -18.5% -9.6%

28,461 9,017 $122,500

36,959 9,572 $135,000

-23.0% -5.8% -9.3%

Statewide

MAR-2011

MAR-2010

New Listings Closed Sales Median Sales Prices

11,790 3,753 $123,00

15,332 4,605 $136,000

Region

Median Price MAR-2011 MAR-2010

% Change

Existing Home Sales MAR-2011 MAR-2010

% Change

Southeast South Central West Northeast Central North

$132,000 $150,250 $121,000 $106,500 $88,250 $94,000

-13.7% -3.0% -6.5% -11.2% -18.1% +2.2%

1,415 740 406 654 208 317

-16.8% -12.8% -28.0% -16.4% -33.8% -18.9%

$153,000 $154,900 $129,400 $120,000 $107,800 $92,000

percent in the south central region and between 16.4 and 18.9 percent in the southeast, northeast and north regions of the state. In the west, existing home sales dropped 28 percent over the period, with the most significant decline was seen in the central region, which slid 33.8 percent for the month. For the quarter, sales look better according to the REALTOR® report. “The decline in sales for February and March were preceded by strong sales in January, so the picture improves when viewed on a quarterly basis,” said Horning.

oth existing home sales and median prices fell in March according to data just released by the Wisconsin REALTORS® Association (WRA). Sales of existing homes fell 18.5 percent in March compared to the same month last year. The median home price fell 9.6 percent to $123,000 over the same period. But REALTOR® experts caution comparisons to last year can be misleading because of the federal homebuyer tax credit, which was in effect in 2010 but is no longer available. “After solid sales in January this year the market has fallen sharply in February and March,” John Horning, Chairman of the WRA Board of Directors, said. “While disappointing, it’s important to remember that home sales in March of 2010 were not typical due to the impact of the federal homebuyer tax rebates.” Horning added program front-loaded sales into the first half of 2010 as buyers rushed to close before the program ended June 30. “The tax credit anomaly of 2010 will distort our 2011 sales and price numbers,” Horning noted. “We expect to return to a more reliable applesto-apples comparison around the fourth quarter of this year.”

Median prices were down 9.6 percent statewide in March compared to March 2010; however prices in the northern region of the state actually increased 2.2 percent over the period. Two other regions had median prices fall by moderate margins, with prices dropping 3.0 percent in the south central region and 6.5 percent in the west region. Existing home prices dropped 11.2 percent in the northeast and down 13.7 percent in the southeast region. Finally, the central region dropped 18.1 percent over the period. “We have to interpret these price changes with caution,” Bill Malkasian, WRA President, said. “Buyers were highly motivated last year to take advantage of the tax rebate and that urgency certainly influenced prices. The return to a normal

All regions in Wisconsin saw sales drop significantly in March 2011 compared to March 2010. The reductions were 12.8 wisconsin real estate magazine

may 2011

1,700 849 564 782 314 391

spring pattern of sales, combined with nearly 15 months of inventory makes 2011 much more of a buyer’s market.” Indeed, the Wisconsin REALTORS® Housing Affordability Index, which measures the percent of the median priced home that a buyer with the statewide median family income can purchase, stood at 244 in March, well above the 216 measure from last year. Both mortgage rates and household income levels were virtually unchanged from last March, so the boost in affordability comes from the decline in median prices over the period. “Our affordability continues to improve,” Malkasian said, noting other economic factors continue to provide positive signs for the housing market as well. “Wisconsin’s unemployment rate is down nearly two percent since peaking in the summer of 2009, and we have added more than 25,000 jobs over the last 15 months so while the growth is slow, the economy is improving,” Malkasian added. “As the economy continues to grow, we will eventually see upward pressure on both mortgage rates and home prices so this is a good time for credit-worthy buyers to get a lot of home for their money.” For More Information Contact: David E. Clark, Economist, C3 Statistical Solutions Inc. Office phone: (414) 803-6537

wisconsin real estate magazine

may 2011

www.wra.org/wrem

Mastering the Close Ahhh, springtime. The buds are blooming, the trees are greening and the Milwaukee Brewers have taken the field - all absolute proof that spring is indeed here. I bring up your beloved Brewers because baseball can serve as a nice analogy for my topic about closings – the critical time between getting that acceptable offer and finishing up the deal. In baseball, finishing up the deal means getting batters around all the bases safely. In real estate, it’s about agents getting buyers and sellers around the closing obstacles safely.

ust think how demoralizing it is for a team to get a player all the way to third base with no outs and then things go sour. First an infield pop-up. A ground out. Then the alltoo-common strike out. Three outs. All that work to get to third and then – nothing. The same thing happens every day in real estate. An agent moves a client closer and closer to a close and then something goes wrong – a loan falls through, an inspection yields an ugly surprise, a seller gets cold feet – and strike three, you’re out. Back to the dugout to regroup. Not a fun place to be. The good news is there are several things you can do to make it around the bases and enjoy scoring a successful close. Here are a few tips you can start using today: 1. Have a system. Ever since I entered the real estate consulting business nearly 20 years ago I’ve been a huge proponent of systems. They take the guesswork (and a good chunk of the hard work) out of real estate, and they’ve been the cornerstone of what I offer agents and brokers. I’m not the only one who’s come to realize systems play a key role in getting to a successful close. One agent I know who’s a big fan of systems is Sara Dreyer, a REALTOR® with RE/MAX Realty 100 in Milwaukee. “I think it’s key to have a system for tracking dates and deadlines in the offer,” Dreyer says. “We use Top Producer software and set up very detailed closing plans that we use on every transaction to be sure nothing gets missed.” If a system sounds too tiring, you might at least consider a closing checklist. That’s something Jo Ferraro, a REALTOR® with Century 21 Affiliated and president at The Jo Ferraro Team in Madison, recommends. “If you don’t have a checklist that outlines what’s to be done from accepted offer to close, create one,” Ferraro says. “It’ll help you provide more consistent service to all your customers, lenders, title insurance folks, attorneys, inspectors, lenders, closing officers and yourself.”

wisconsin real estate magazine

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The gist here, of course, is that you make yourself as organized and efficient as possible through every step of the process. Do that and you’ll enjoy faster and more hassle-free closings. 2. Communicate (and communicate even more) so everyone knows what you’re doing and what they’re doing. Moving to another sports analogy, think about the Packers: What do the players do before a play? They huddle and communicate so everyone knows what they’re doing after the ball is snapped. If one player doesn’t get the message, it can mean at best, a botched play and at worst, a turnover that leads to an opponent scoring. “Keep every single party to the transaction informed with what you’ll be handling and what they’ll be handling,” Dreyer says. She adds that in her office they use a letter that can be e-mailed to her clients summarizing the dates and deadlines in the offer and lets them know what her office will be handling and what they need to handle, with deadlines. Then Dreyer follows up at intervals to be sure that everyone has completed their tasks. Think of yourself as the pitcher. Nothing happens without you. Make sure you’re in control and that you know what’s going on at every turn. Don’t leave anything to chance. 3. Be proactive. You’ve heard the old adage that an ounce of prevention is worth a pound of cure. That saying couldn’t come in handier for REALTORS® seeking a smooth close. “Follow up frequently to be sure everything is on track and is being addressed,” Dreyer says. I couldn’t agree more. She also says it’s not a time to believe that no news is good news. Dreyer practices what she preaches and asks lenders for a weekly update on loans progress. And she tracks when the appraiser calls. If she doesn’t hear from an appraiser, she’ll call the lender to learn when it was ordered. “It’s better to do that than to find out that the appraisal is going to be late and then you don’t make the loan commitment deadline,” Dreyer says. The other side of this coin is procrastination. It can be a deal killer like no other. Stay on top of the details with a can-do attitude at all times. Mastering continued on Page 8

Mastering (Continued from page 7)

When things get off the path, often our first reaction is to find out who goofed and stick them with the blame. If you’re driving down the highway on the way to an important meeting and your car stops, you might think, “Aghhh, this car maker is the worst.” But it could be you forgot to fill up with gas. But no matter why the car stopped, the only thing that’s going to get you back on the road is to think, “solution.” Trust me, blame doesn’t help matters. Remember, keep your goal in mind: to get the sale closed. “If a closing challenge crops up – and hopefully you saw it coming with all your follow up and tracking – but if not, be sure to tell all parties as soon as possible and instead of finger-pointing, work to find a solution,” Dreyer says.

4. Know your lenders. While we’re on the topic of lenders, Dreyer and others say it’s especially important these days (after the mortgage crisis) to be proactive with lenders. Whether or not a buyer can get a loan of course depends on the strength of that particular buyer. But Dreyer says it’s vitally important that when you get a preapproval letter with an offer that you call and talk with the lender personally about the customer’s qualifications. “REALTORS® shouldn’t just rely on the written letter,” Dreyer says. “The most agents can do, assuming they feel confident enough in the strength of the preapproval to begin with, is to continue to follow up with the lender to be sure to head off any potential issues or delays.” Ferraro agrees. She says REALTORS® should take time to talk to buyers’ lenders to ensure they’re well qualified, completely informed and educated with the loan process and their loan program specifics. “Setting expectations for the lender and providing timely information and deadlines will help facilitate a smoother process for everyone,” Ferraro says. 5. Read, review, repeat. You’ve heard it many times before: shampoo, rinse, repeat. Well, when it comes to closings, that saying becomes read, review, repeat. Sure, it’s not that exciting but it has to be done. Dreyer advises agents to review all closing documents including title policy and closing statements to correct errors or uncover any issues before they get to the closing table. Are all the names spelled correctly? Is the purchase price correct? Are all buyer credits and seller charges correct? Are there any exceptions on the title that need explanations? All vital questions to consider and to keep everything on track. 6. Think solutions, not blame. Invariably something (and often more than just one thing) will go wrong along the road to a closing. Sometimes it’s big, sometimes small, but you can count on it.

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7. Education, Education, Education. To get to an effective closing, replace the old real estate moniker of location, location, location with education, education, education. Ferraro calls education “the single most important element” in ensuring an offer gets to closing. “Educate not only yourself, but also your customers and clients – and not only about the house they’re considering, but the entire process,” Ferraro says. Take inspections for example. She says to educate your buyers on the inspection process, the possible outcomes and potential solutions upfront. “When and if needed, this step of educating buyers is very beneficial to be able to remind and move buyers and sellers forward and past obstacles,” she says. One reason Ferraro says she’s so adamant about education is that it helps set expectations. “If you explain each phase and the possible roadblocks and solutions to each step, it helps ease the stresses along the way such as financing obstacles, inspection, appraisal issues etcetera,” she says. “If you communicate honestly, clearly and educate upfront, it can save tons of time and frustrating situations down the road. Take the extra time upfront, do your homework, give your professional advice and be the best home-buying guide you can be to help your customers and yourself enjoy the success and satisfaction of a smooth closing.” And if you can do that – actually have your clients enjoy the process – you’re on the sure and successful path around all the bases of real estate. Let me hear from you. How are you doing with your closings? Have you added anything new to your tool box to make closings a little easier or better? If so, what? What specific problems or questions do you have about closings? Please send any comments or questions you have to Article@CorcoranCoaching.com or visit www.facebook.com/ CorcoranCoaching.

Bob Corcoran is a nationally recognized speaker and author who is founder and president of Corcoran Consulting Inc. (CorcoranCoaching.com, (800) 9578353), an international consulting and coaching company that specializes in performance coaching and the implementation of sound business systems into the residential or commercial broker or agent’s existing practice. I look forward to hearing from you. Sign up for your complimentary business consultation. www.CorcoranCoaching.com/bpw.php www.wra.org/wrem

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may 2011

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legal

The Wait is Over: The New and Improved Vacant Land Offer to Purchase By debbi conrad and cori lamont

Along with the WB-11 Residential Offer to Purchase and the WB-14 Residential Condominium Offer to Purchase, the WB-13 Vacant Land Offer to Purchase has also been revised. The WB-13 shares the same use dates as the WB-11 and WB-14 – optional use date is March 1, 2011 and the mandatory use date is July 1, 2011.

he majority of the WB-13 changes mirror the changes made in the residential offer. For example, this includes revisions to provisions for: agency relationship of drafting licensee (lines 1 and 2 – reflecting 2006 agency law changes); Delivery – including the addition of e-mail; Closing; Closing Prorations; Buyer’s PreClosing Walk-Through; Property Damage Between Acceptance and Closing; Definitions; If This Offer is Not Contingent on Financing; Appraisal Contingency; Property Dimensions and Surveys; Earnest Money; Distribution of information; Notice about Sex Offender Registry; Secondary Offer; Title Evidence – including Conveyance of Title, Gap Endorsement, Merchantable Title; Special Assessments; Default; Inspections and Testing; and Inspection Contingency.

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This article will focus specifically on the changes unique to the 10-page WB-13 Vacant Land Offer to Purchase. For a detailed discussion of the changes to the WB-13 review the 2011 Vacant Land Offer to Purchase Legal Update.

NEW: GOVERNMENT PROGRAMS CONTINGENCY (LINES 98-110) This contingency provides the buyer an opportunity to see what federal, state, county and local programs and accompanying fees exist on the property as well as the costs involved if the buyer fails to continue participation in the programs. The inclusion of this contingency was to provide the buyer the opportunity to ask the seller to deliver a list of

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all conservation, farmland, environmental, governmental or land use programs, agreements, restrictions, conservation easements, etc. that apply to the property (farmland preservation, use value assessments, managed forest, conservation reserve, etc.) along with a list of any pending or deferred penalties, fees, etc ... As stated in the contingency, the buyer has seven (7) days from “actual receipt” (which is defined the offer) of the list and disclosure to terminate based upon those restrictions, programs, fees, etc. that the buyer finds unsatisfactory. A caution included in the contingency reminds the buyer that if the buyer does not terminate the offer, then the buyer is agreeing to continue all of the programs. If the buyer does not do so, the buyer must reimburse the seller for any fees and penalties charged to the seller as a result of the buyer’s failure to participate or adhere to program guidelines and restrictions. This contingency is especially helpful for any buyer wishing to purchase a parcel to develop it.

MODIFICATION: CONDITIONS AFFECTING THE PROPERTY OR TRANSACTION (LINES 163-187; 246-278) Currently sellers of vacant land are not required to complete a condition report. For more information regarding proposed legislation requiring vacant land sellers to complete a condition report, read Tom Larson’s article on page 26 - the list of the Conditions Affecting the Property or Transaction in the revised WB-13 comes from the WRA’s optional Seller Disclosure Report – Vacant Land. These are concerns that might arise with regard to vacant land, including vacant land in rural settings. The following highlights new items added to the list in the WB-13. •

Item j - relates to contamination or unsafe conditions resulting from pesticides, herbicides, fertilizer, radon, radium, lead, arsenic or other hazardous substances on the property;

•

Item k - covers the production of meth or other hazardous or toxic substances;

•

Item m - relates to well defects and well water contaminants such as E. coli, nitrates, atrazine, etc.;

•

Item n - relates to septic system defects and out-of-service POWTS not properly closed;

•

Item p - relates to Brownfields, contaminated land and remediated soils;

•

Item r - addresses potpourri of homeowners associations, areas shared with others, zoning violations, nonconforming uses, conservation easements, restrictive covenants or other instances of use of the property by non-owners (other than recorded utility easements);

•

Item s - asks whether the property is in a special purpose district like a drainage district, lake district, sanitary district, etc. that can impose fees;

•

Item t - covers government regulations requiring repairs, alterations or corrections;

•

Item u - relates to property tax increases, reassessments and special assessments;

•

Item v - is for burial sites, artifacts, mineral rights, endangered species and orchards;

•

Item w - is about flooding, standing water, drainage problems or other water issues;

•

Item x - covers material damage from fire, wind, floods, erosion, etc.;

•

Item y - looks at odor, water intrusion, noise, etc. from neighboring property;

•

Item z - crop damage, diseased trees and injured livestock;

NEW: MANAGED FOREST LAND CONTINGENCY (LINES 111-120) Effective Jan. 1, 2011, Wis. Stat. § 710.12 requires sellers to provide buyers with a written disclosure, no later than 10 days after acceptance of the offer, if the property will continue to be subject to a Managed Forest Land (MFL) order after the sale. This disclosure explains that MFL orders remain in effect for 25 or 50 years and that the Department of Natural Resources (DNR) Division of Forestry monitors MFL management plan compliance. In addition, the seller must furnish Division of Forestry contact information and include the mandatory language that appears on lines 117-119 of the WB-13: “Changes you make to property that is subject to an order designating it as managed forest land, or to its use, may jeopardize your benefits under the program or may cause the property to be withdrawn from the program and may result in the assessment of penalties.” Checking the box on line 111 satisfies the required MFL disclosure requirement. The WRA has created a separate Managed Forest Law – Seller Disclosure form (WRA-MFL) on ZipForm as an alternate way for sellers to satisfy the § 710.12 disclosure requirement. For more information review the February 2011 Wisconsin Real Estate magazine article, “Condition Report Conundrum” at http://www.wra.org/WREM/Feb11/ ConditionRptConundrum/, the November, 2010, Wisconsin Real Estate magazine article, “New Disclosure Requirements” at http://www.wra. org/WREM/Nov10/NewDisclosureReqs/ and the July, 2010 Legal Update, “Legislative Update 2010” at www.wra.org/LU1007.

NEW: INFORMATION PROVISIONS (LINES 125-145) The WB-13 now includes basic educational information relating to use value assessments, Farmland Preservation and the Conservation Reserve Program, all of which could trigger a substantial penalty fee. This section also includes information relating to County Shoreland zoning and mitigation plans. While these are not all of the programs or issues that may impact vacant property development, these are the most common. Each brief discussion alerts consumers to the possible concerns and provides resources for more information.

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Vacant Land continued on Page 12

Vacant Land

(Continued from page 11)

•

Item aa - touches on manure storage facilities;

•

Item bb - addresses impact fees or other conditions that would increase the cost of development or reduce the property value;

•

Item cc - relates to shoreland zoning mitigation plans; and

•

Item dd - is about use value assessments.

NEW AND MODIFICATION: PROPOSED USE CONTINGENCIES (LINES 306-350) As in the previous version the vacant land offer continues to include an overall heading for a Proposed Use Contingency with sub-categories below, also referred to as an umbrella contingency. However, several improvements have been made in the revised WB-13. The introductory section to this umbrella contingency states the buyer’s proposed use on lines 306-308 that is referenced in the sub-contingencies below on lines 314-350. This introductory umbrella language also states the checked provisions below are deemed satisfied unless the buyer delivers written notice to the seller specifying those subcontingencies that cannot be satisfied, accompanied by written evidence substantiating why the indicated provisions cannot be satisfied. If the buyer provides this written notice, the offer is then null and void. This part of the WB-13 includes a formatting facelift as well. Each of the sub-contingencies on lines 314-350 includes a check box and heading as well as additional boxes and blank lines to be completed, if applicable, within the sub-contingency. NEW: ZONING CLASSIFICATION CONFIRMATION (LINES 314-316): this may be an important inclusion for any buyer concerned with the zoning or availability of a zoning variance before moving forward with his or her plans. This sub-contingency allows the buyer to verify the zoning represented by seller and confirms that the zoning will allow the buyer’s proposed use stated on lines 306308. SUBSOILS (LINES 317-320): this sub-contingency permits the buyer to address any concerns with adverse subsoil conditions such as buried foundations or construction materials, organic or non-organic fill, dumpsite use, buried containers containing hazardous or toxic materials, high groundwater tables, soils with a low load-bearing capacity or excessive rock that may impede or increase the costs of development. PRIVATE ONSITE WASTERWATER TREATMENT SYSTEM (POWTS) SUITABILITY (LINES 321328): this sub-contingency allows the buyer to obtain

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www.wra.org/wrem

written evidence from a certified soils tester that the soils and other conditions meet the applicable code requirements for the installation of a POWTS suitable for the buyer’s proposed property use. EASEMENTS AND RESTRICTIONS (LINES 329-332): including this sub-contingency provides the buyer an opportunity to obtain copies of easements, covenants and restrictions affecting the property. In addition, the buyer may obtain a written opinion from a qualified independent third party (for example, an attorney) that none of the easements or restrictions will prevent, significantly delay or significantly increase the cost of the buyer’s proposed use. APPROVALS (LINES 333-337): this sub-contingency allows the buyer to make the offer contingent on the buyer receiving permits, licenses and other approvals required for the buyer’s specified proposed development. For example, the buyer may wish to make the offer contingent on receiving a liquor license for the proposed tavern. UTILITIES (LINES 338-342): this permits the buyer to verify in writing the location of various existing utility connections for electric, gas, municipal sewer, water and telephone, etc. NEW: ACCESS TO PROPERTY (LINES 343-345): this new sub-contingency allows the buyer to address legal access to the property. This may be of significant use to a buyer that is purchasing the property to build on, because a buyer with no legal means of vehicular access to the property (landlocked) may need to purchase additional land or an easement from an adjoining landowner, petition the town board to lay out a highway, or talk to attorney about whether a way of necessity or prescriptive easement (by adverse possession) are present. NEW: LAND USE APPROVAL (LINES 346-350): licensees should note this new sub-contingency is indeed part of the Proposed Use Contingency. This sub-contingency was intentionally set apart and purposefully placed at the left margin because this sub-contingency has a deadline separate than the deadline provided on line 310 of the umbrella contingency. When reading the language, this sub-contingency clearly references a separate deadline on line 349, but then goes on to clarify that it is still part of the Proposed Use Contingencies by referencing the, “proposed use at lines 306-308.” The reason why the subcontingency has a separate deadline is simple; generally it will take significantly longer to secure the land use approvals than it will to accomplish the other tasks under the proposed use umbrella. This sub-contingency gives the buyer the opportunity to secure any rezoning, conditional use permits, licenses, variances, as well as building and occupancy permits needed for the buyer’s proposed use.

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MODIFICATION: MAP OF THE PROPERTY (LINES 351-364) While this contingency is not new to the WB-13 it has been substantially improved both with regard to language and function. As in the previous WB-13, the buyer selects the desired map components. However, there are several new additions including: the requirement that the map must be dated after the date of acceptance of the offer; insertion of minimum and maximum acreage; and cautionary language regarding the cost and time required to obtaining the map. The contingency fails if the buyer delivers a copy of the map and written notice identifying any encroachment, material inconsistency, or failure to meet the map contingency requirements to the seller within the five days of the earlier the deadline for the map or buyer’s receipt of the map. New language also clearly states that upon delivery of buyer’s notice the offer is null and void.

NEW: PROVISION OF MERCHANTABLE TITLE (LINES 437-441) While the Title Evidence language of the WB-13 is substantially the same as the WB-11, there are two provisions that are different. Line 438 gives the buyer the ability to choose the deadline for the delivery of the title commitment by inserting a specific number of days after acceptance (“15” if left blank). In the WB-11, the title commitment is due not less than five business days before closing. Since buyers purchasing vacant land typically intend to develop that land now or in the future, this revision gives the buyer’s attorney or the buyer a longer period to review the title commitment and address any title concerns.

NEW: TITLE NOT ACCEPTABLE FOR CLOSING (LINES 442-449) This is the second Title Evidence subsection where the WB-13 has a new timeline. Blank lines are provided for the deadlines for notifying the seller regarding of any title objections and the seller’s response. Specifically the buyer may insert the number of days the buyer has after delivery of the title commitment to notify seller regarding the buyer’s title objections (“15” if left blank) and the number of days the seller has to deliver notice to buyer of the seller’s election to remove the objections (“5” if left blank). Again, this modification was made to allow the buyer to work through title concerns early on rather than waiting until immediately before closing.

NEW: INSPECTION CONTINGENCY – RIGHT TO CURE (LINES 518-524) The 2000 version of the WB-13 did not include a right to cure provision within the inspection contingency. The 2011 WB-13 mirrors the WB11 and now includes a right to cure provision. Debbi Conrad is Senior Attorney and Director of Legal Affairs and Cori Lamont is Director of Brokerage Regulation and Licensing for the WRA.

legal

best of the legal hotline

with tracy rucka

Closing Notes

o assure a smooth closing, REALTORS® should begin planning for the closing when the property is listed and the offer to purchase is drafted. Keeping good internal timelines and checklists will minimize unintended obstacles that could postpone or jeopardize closings. The following Hotline questions have been asked and answered about closing issues.

Escrow Agreements The buyer went on the pre-closing walk-through and it was discovered the seller had not completed repairs according to the terms of the offer. The parties want an escrow agreement for the work to be completed. Can the broker hold the funds and do they need a written escrow agreement? According to Wis. Admin. Code § RL 18.07(1) a broker may, with a separate agreement prepared by the parties or an attorney, place funds in escrow to be held after closing. A well-written escrow agreement will minimize difficulties in fulfilling the terms of the post-closing escrow. Real estate licensees are not authorized to

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draft escrow agreements, therefore, the broker may recommend the parties use the services of an attorney or draft their own agreement. Paying an attorney to draft the agreement may be money well spent to assure the agreement adequately identifies the intent of the parties and covers both the fulfillment of obligations and non-compliance by either or both parties. Because an escrow agreement should be drafted for the specific needs of parties in that transaction, agreements from other transactions should not be copied for use in subsequent transactions. See § RL 18.07 at http:// legis.wisconsin.gov/rsb/code/rl/rl018.pdf. What is the broker’s obligation to assist the parties with the escrow agreement after closing? Do the agents have any agency relationship requirements or duties after the sale has been completed? License law provides that only the duty of confidentiality extends past closing. Otherwise the provision of brokerage services is concluded when the transaction closes. It will be up to the parties, or their legal counsel, to assert their legal rights per the terms of the escrow agreement.

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Fuel Prorations A property sale is to close tomorrow. The seller has brought up an issue with the propane fuel proration. When the seller purchased the fuel, the seller’s cost per gallon on a prepaid basis was half the price of the current cost. The seller wants to prorate based on the higher amount. Is that proper? The language of the old offers did not specifically address this issue –thereby leaving parties with the need to insert specifuc provisions and the dollar amounts they wanted to use. The 2011 WB-11 Residential Offer to Purchase closing proration section states, in part, that the fuel shall be prorated at closing, based upon date of closing values. The parties are cautioned to consider using alternate values if applicable. In addition, if it would be difficult to have fuel readings the day of closing, the parties may provide another approach in the offer. If date-of-closing values cannot be satisfactorily obtained, the fuel proration may be computed using average rates, per diems or other amounts.

Closing Statements and HUD-1 Is a listing broker required to prepare and provide closing statements detailing both the seller’s costs and the buyer’s costs or can the title company assume this responsibility? At the time of the closing, the listing broker is required per Wis. Admin. Code § RL 15.03 (http://legis.wisconsin.gov/rsb/code/rl/ rl015.pdf) to ensure that a complete copy of the seller’s portion of the closing statement is delivered to the seller and a complete copy of the buyer’s portion of the closing statement is delivered to the buyer. These closing statements shall accurately account for all funds received and paid by the broker in connection with the transaction. Although the licensee is not required to prepare closing statements (that job may be delegated), it is prudent practice to do so in order to ensure accuracy. By completing a closing statement and comparing it to the HUD-1 provided by the title company or closing agent, licensees will likely minimize errors at closing. If a seller cannot attend closing or wants to pre-close, can the agent/ broker sign the HUD-1 for them? The Department of Regulation and Licensing has disciplined brokers for signing contracts on behalf of buyers without proper authorization. The underlying issue is whether authorizing the broker to sign on behalf of the party protects the interest of the public. Because signing on behalf of the party is not part of general real estate practice, the broker may place the seller in a position where there is a challenge to the enforceability or validity of a document not signed by the party. That risk is substantially eliminated if the seller gives the broker a limited power of attorney which gives the agent specific authority to sign certain documents. With a power of attorney there remains a risk for miscommunication, and liability for the broker undertaking such activity. Whether the broker

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wants to risk the potential liability for such activity is a question for the broker’s attorney. The broker may also wish to review the company’s errors and omissions insurance policy to see if the policy would cover any claims relating to such activity.

Agents at Closing Does the broker need to attend the closing or can the salesperson who handled the negotiations attend solo? Per Wis. Admin. Code § RL 17.08 (http://www.legis.state.wi.us/ rsb/code/rl/rl017.pdf), the broker-employer must supervise the activities of any licensee employed by the broker-employer. Whether the broker-employer and or licensee attend a closing is a matter of company policy. The broker-employer is responsible for the actions of any licensee attending a closing regardless of whether the broker-employer is there. There are pros and cons for a licensee attending closing. A licensee attending closing must be cautious not to engage in the unlicensed practice of law if legal issues arise. A broker may, upon the request of the parties, draft an amendment to reflect any last-minute closing table argreements. When deciding whether to postpone or proceed with closing the parties should be referred to legal counsel.

Search and Hold The broker has a listing and the closing is set for Friday. When the title work came in it revealed that the seller has a second mortgage on the property. The seller had not disclosed this mortgage to the broker and, given the purchase price, there are not enough funds to pay the Legal Hotline continued on Page 16

Legal Hotline

(Continued from page 15)

first and second mortgagees and the other liens. What can be done to prevent this? At the time of the listing, the listing broker may ask the seller to complete the WRA Listing Questionnaire Regarding Title Issues to avoid being surprised by liens and additional mortgages just before closing. The questionnaire is designed to identify early in the transaction, many different title issues that could have an impact on closing. In addition, requesting a search and hold from the title company is helpful in case the seller has forgotten or is concealing relevant information. Having this information from the beginning gives the seller more time to obtain the funds necessary to satisfy the liens and mortgages and have a successful closing. The Provision of Merchantable Title subsection of the residential offer indicates that the title commitment delivered to the buyer must show merchantable title “subject only to liens which will be paid out of the proceeds of closing and standard title insurance requirements and exceptions, as appropriate.” Thus, if a seller provides a title insurance commitment that has liens and the seller cannot pay them at or before closing, the seller is apparently providing a commitment that is not acceptable for closing. In the Title Not Acceptable for Closing subsection, the buyer can object to the seller in writing and the seller has 15 days to correct the situation. If this is not done, the seller is at risk of losing the sale. More information about title issues is available in the February, 2011 Legal Update, “2011 WB-11 Residential Offer to Purchase” at www.wra.org/LU11.02 and Wisconsin Real Estate magazine article, “Short Sales and Title Insurance” at http://www.wra.org/WREM/ Jun09/ShortSalesTitleInsurance/.

REALTOR® NATiONWidE

Open

The buyer feels the listing agent should have disclosed the liens that could not be satisfied. What are the broker’s disclosure obligations regarding the seller’s liens on the property? Brokers are required to make timely written disclosures of material adverse facts. When there is information that indicates that a party to the transaction is not able to or does not intend to meet his or her obligations under the contract, then the issue constitutes an adverse fact. If a party to the transaction were to so indicate, or if a competent licensee would generally recognize this fact 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 this fact is both adverse and material, then Wis. Admin. Code § RL 24.07(2) requires the broker to timely disclose the fact in writing to all parties to the transaction, even if the client would direct the broker not to disclose. If the broker was aware of the seller’s financial issues disclosure would have been appropriate. Tracy Rucka is Director of Professional Standards and Practices for the WRA.

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HOuse WEEkENd

June 4-5, 2011 Join REALTORS® coast-to-coast for this two-day event to help promote the benefits of home ownership and highlight the value of working with a REALTOR®. The REALTOR® Nationwide Open House Weekend provides a great opportunity to have an open dialogue with consumers about housing issues that matter most.

For more information, contact Barbara Matthopoulos at the Chicago Association of REALTORS® 312-214-5511 or e-mail bmatthopoulos@chicagorealtor.com.

Promotional materials and other resources are available.

Visit www.REALTOR.org/topics/nationwideopenhouse.

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techhottips

View more posts at www.techhottips.com

Technology Tips & Tools for the Real Estate Professional

Google 411 Have you heard me bragging on Google yet? Well, here I am again because time saving shortcuts are a big help for us all and you need to know about Google 411. Thank goodness we don’t have to carry around the yellow pages in the back of car in case you need a phone number or address while we’re out and about. Smartphones and even mobile phones in general have made the search for a phone number easier than that - and hey, at least our fingers don’t get black tips from flipping pages :) If you already text message - Google 411 is faster than you can imagine! Next time you need a business address or phone number, give this a try. Send a text message to 46453 (“Google”) with the name and city you’re looking for. Instantly you’ll receive an answer from Google with the business name and number. I couldn’t believe how fast it worked when I was trying to find a locksmith. I tried to text, “Locksmith Malvern PA” and I got results !

Hook me up Often times I find myself running around with my laptop and needing an Internet connection. I’ve hooked up to the public WiFi networks around; a good option when they’re there. I’ve had the Verizon WiFi card; a costly, but decent option. But about a year ago, I found the very best option around ... are you ready ? /insert drumroll sound here/ It’s PDA.net through my Smartphone! PDA.net is an app available on the Android, Blackberry, Palm, Windows Mobile, and if you jailbreak your IPhone, you can get it on there too. It is one of the best practical apps out there. You can get it through the marketplace or at JuneFabrics (no, it isn’t a fabric store). I used the free one for a while, but quickly upgraded for less than $25.00 per year so I could view secure sites. (Oooooh, just saw while writing they are offering the application for $15.95- go get it!) I’ve even changed phones and it upgraded with me :) I like it when they take care of things like that. Today, while waiting on some tests of my future mother-in-law at the local hospital, I found the public WiFi network to be too slow. So I hooked up PDA.net through my Android with it’s USB cord and PRESTO! I could get my work done online and even held a webinar for about 30 minutes !

qr code, huh? Have you heard about QR Codes? There’s a big debate on whether these little squares of black will actually turn into a useful tool for real estate marketing or whether they will go by the wayside. If you want the long term, it’s called the Quick Response code and looks similar to the UPC symbol found on a lot of products. I’ve seen these QR codes popping up all over the place! At the hospital, on storefronts, on signage in a store, on appliances, on real estate signs, marketing materials, etc. They are around if you look! So what’s behind the black squares? You’ll need a smartphone with a QR Code Reader to find out :) Look in your marketplace for a QR Code Reader - there are many free ones out there. I have a Droid and use QR Droid. After you download the app on your phone, open the program and capture a picture of this one:

wisconsin real estate magazine

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wra website legal

Website Login

By autumn drussell

Each month we will take a look at different areas of the all-new WRA website 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.

In a technology-driven society, security and ease of use are two key components any website should offer. Now, with the March launch of the WRA’s new website, www.wra.org, that’s standard operating procedure. Creating an account, resetting your username and password and updating your profile are resources that have been streamlined and are easier than ever. Ease of use: Members will now find their login area – username and password entry – located in the top, right-hand corner of the homepage. This is standard for most websites and makes your log-in process much easier to find.

Housing Statistics Did you know Dane County median homes prices in 2011 are higher than the state average?

That’s just one valuable piece of data members of the Wisconsin REALTORS® Association can now use to help build marketing plans with the WRA’s improved Housing Statistics resource at wra.org. With the launch of the WRA’s new website in February, members can now find that resource as one of eight hot buttons right on the homepage, so no more searching for the information you use most.

Security: The WRA has switched to the Internet-standard for username and password (login credentials) reset. Members who forget their password will receive an e-mail to the address previously supplied to the WRA, which will include a link members must click on to complete the process. The upshot? No one can hijack your account simply by knowing information readily available on your business card, such as your name and e-mail address. Don’t have access to your computer? No problem. Call the WRA (800) 279-1972 during normal business hours, 8:30 a.m.-5 p.m., and a staff member can reset the password with some identifying information from you. More features: In addition to a streamlined log in process and enhanced security, the Account Settings page is much more robust and selfcontained. Previously members had to navigate three separate pages to update their profile. Now, all profile information can be found in one place, and navigated to from either myWRA or through an account setting link to give you quicker access. It’s a much improved account management tool, and more intuitive. For further questions about the WRA’s new website, visit www.wra.org/help.

Quick facts: If I had a username and password on the old site, do I need to create another one? Where once you could only review county-wide data, members can now compare home prices and home sales across the state, whether it be county to county, region to region, or state to region or county. And, data goes back to 2007 so members can track trends and see whether or not they are under or over performing as compared with others in the field. What’s more, those numbers are provided real-time, so as those numbers are reported by local Multiple Listing Services, that information should become available to members almost instantly.

No. If you have ever registered with wra.org, your account information should have transferred.

Soon, members will also be able to download comparatives in pdf format, for use in marketing and sales.

Can I change membership account information?

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

wisconsin real estate magazine

may 2011

Why do I need an account? To be able to see member-only information (such as Legal Services and myWRA). It also enhances your visit to wra.org by verifying you as a member. This automatically gives you member-pricing for education and products. In addition, online forms will auto-fill with your personal information, such as Legal Hotline, saving you time.

Yes, online at wra.org. Click on the Account Settings tab at the top of the page, log in and you can modify your profile and personal settings.

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  1-Day Pass ( Tues/Wed/Thurs ) circle one $ 84 $ 94 $ 104  Full Convention Pass $ 114 $ 124 $ 134  TWO-FER: 2nd WRA Member* $ 54 $ 64 $ 74  Unlicensed Spouse/Sig. Other $ 35 $ 35 $ 35 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 $ 124 $ 164

$ 134 $ 174

Thru 8-22 After 8-22

ATD $ 124 $ 154 $ 94 $ 55

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

Kalahari Resort and Convention Center 1305 Kalahari Dr. | Wisconsin Dells, WI Phone: 877-253-5466 or 608-254-5466 Room Rates Standard Room: Jacuzzi Suite: Royal African Queen Suite: $179 Release Date: August 13, 2011

$99 $149

Included in Registration Fee: • Icebreaker Party – 9/13 • Real Estate Continuing Education – Four of Six courses included in Full Convention Pass - MUST register in advance first come, first served!

ATD $ 154 $ 194

• 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

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

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

Thru 8-22 $ 195 $ 195 $ 195 $340 $ 340

After 8-22 $ 205 $ 205 $ 205 $ 350 $ 350

ATD $ 225 $ 225 $ 225 $ 370 $ 370

Two-Fer Pricing

Thru 8-1

Thru 8-22

After 8-22

ATD

Two-Fer Pricing

$ 134 $ 144

$ 144 $ 154

$ 154 $ 164

$ 174 $ 184

CRS Luncheon (9/15) ��$20  Member One  Member Two

 2nd WRA Member* .....$ 90

WRA REALTOR Member  Class Only  Class w/ Convention

 Special Services: Check here if you require special needs to attend. Attach written description of needs.

$ 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

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

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___________

product showcase

Google Alerts

New Forms

Customized e-mail alerts with Google’s monitoring application

The new offers are complete!

If you’re the type of person who doesn’t like to search for your news, Google Alerts might be worth looking into. As a content-monitoring service, it allows a user to simply enter the topic they wish to monitor and after a few steps, get an e-mail alert tailored to the user’s specifications. For example, after typing in the term real estate, within five minutes I received a custom e-mail with at least 10 articles ranging from industry news to mortgage rates, open house listings and more. Users can also personalize searches by source type (i.e. discussions, news, video, blogs, etc.).

The Department of Regulation and Licensing has made revisions to the WB-11 Residential Offer to Purchase, WB-13 Vacant Land Offer to Purchase and WB-14 Residential Condominium Offer to Purchase. It became apparent to the Forms Advisory Committee, already working to update the WB-14 Residential Condominium Offer to Purchase and the WB-13 Vacant Land Offer to Purchase, that there were sections of the 2010 WB-11 Residential Offer to Purchase that could be modified to clarify language and enhance its use in real estate transactions. That effort, combined with questions, comments, and concerns from practitioners and attorneys regarding the 2010 Offer, led to the creation of the new 2011 WB-11 Residential Offer to Purchase. Optional and Mandatory use dates are 3/1/11 and 7/1/11. Revised forms include: WB-11

Residential Offer to Purchase

WB-13

Vacant Land Offer to Purchase

WB-14

Residential Condominium Offer to Purchase

A complete summary of changes and a draft copy of the 2011 WB-11 Offer to Purchase is available in the February 2011 Legal Update at www.wra.org/LU1102. Some handy uses of Google Alerts include:

In addition to the DRL approved forms, the following WRA drafted forms have been revised:

•

Keeping tabs on a developing news story

WRA-SMK

Smoke Detector Notice

•

Monitoring your online reputation

WRA-5DRV

5 Day Notice to Remedy

•

Keeping current on a competitor or industry

WRA-5DNV

5 Day Notice to Vacate

•

Getting the latest on a celebrity or event

WRA-14DN

14 Day Notice to Vacate

•

Keeping tabs on your favorite sports teams

WRA-28DN

28 Day Notice to Vacate

Users determine the frequency of checks for new results. Three options are available: daily, weekly or as-it-happens. These options set the maximum frequency of alerts and do not always control how often they will receive alerts. Alerts are sent only if new content matches the user-selected search terms.

WRA-30DN

30 Day Notice to Vacate

Google Alerts only provides content from Google’s own search engine. Alerts are available in plain text as well as HTML and in 2008, Google made alerts available as Real Simple Syndication (RSS) feeds.

For the latest information on form availability in print and on zipForm, as well as tools to help you learn about the new forms, visit the WRA website at www.wra.org/formsupdate.

The rental notices were revised to make the language universally acceptable to all Wisconsin county courts and the Smoke Detector Notice was updated to include state carbon monoxide detector laws.

Visit www.google.com/alerts to sign up for a free account.

wisconsin real estate magazine

may 2011

education

Sales Pre-License Course July 18-21; 25-28, 2011 WRA Headquarters - Madison

To obtain a real estate license in the state of Wisconsin, you must first complete 72 hours of approved education courses such as our sales and licensing course. Second, you must pass a state-administered exam. The WRA will be offering an eight-day Accelerated 72 Hours Sales program on – July 18-21; 25-28. Brokers can purchase a $50 discount coupon for only $10, which entitles your new recruit to a $50 discount on the registration fee. Your new recruits can be ready to take the exam as soon as they complete the class. Ask them to call and register today – 1(800) 279-1972. This program is also available through self-study video (DVD), a self-study online program and just recently released On Demand program. Visit: www.wra.org/CRScourses.

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 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.

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. 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: - 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)

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

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

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

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

may 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

May 11, 2011 May 12, 2011 May 19, 2011 June 1, 2011 June 2, 2011 June 3, 2011 June 7, 2011 June 22, 2011 July 27, 2011

2011-12 Course 2 2011-12 Courses 1 & 2 2011-12 Course 4 2011-12 Course 1 & 2 2011-12 Course 3 & 4 2011-12 Elective A & D 2011-12 Elective A 2011-12 Elective C 2011-12 Elective A

Sheboygan Janesville Racine St. Paul, MN St. Paul, MN St. Paul, MN Racine Racine Sheboygan

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

920-457-7908 608-755-4854 262-554-3940 612-287-3921 612-287-3921 612-287-3921 262-554-3940 262-554-3940 920-457-7908

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 May 9-12, 2011 July 18-21; 25-28, 2011 Aug. 1-4, 2011 Oct. 3-6; 10-13, 2011 Oct. 31-Nov. 3, 2011

may 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

PRIMARY PROSPECTING:

By marcus a. wally

If you are the same as every other Realtor® your value is reduced. The first lesson I remember learning when I got my real estate license 20 years ago was the importance of prospecting. This month’s column is about the value of constantly baiting the hook and keeping your pole in the proverbial water.

You must constantly show proof and tangible benefits to the client about your services. Being the same as any other real estate professional gives the client no reason to hire you over the cheaper broker down the street, their uncle in the real estate business, or the referral they got from their boss. So be different – and master the art of prospecting. The term prospecting can be broken down by letter: Persistence: Without constant follow up and follow through, one is not successful in any field of practice. Commit to prospecting every day. Prospecting is not easy and each of us faces rejection. But somehow we must pull ourselves up by our boot straps and keep marching. Don’t give up, that “yes” is right around the corner. Routine: Prospecting must become a constant, daily routine. In order to make real estate work, we must prospect all the time. I always have my name badge on. I’m constantly smiling at everyone and open to meeting new folks. You cannot be shy and expect to be a top producer. Get over yourself if you are not willing to get out there and let folks know what you do for a living. Then, ask for the business. Opportunity: Prospecting creates opportunity, and opportunity is what buys our groceries. Each and every time you introduce yourself to someone you don’t already know you are creating the opportunity to do business. If not with that person, with someone that person knows. Always remember opportunity sometimes doesn’t knock more than once, so don’t hesitate when opening the door to opportunity. Stamina: When I instruct my GRI classes, I always tell the students it isn’t always the first or try that nets the result, so we must develop stamina in order to succeed. Everyone calls the FBSO once or sends one letter. But it is the agent that stays with the prospect that ends up earning the business. Develop a program to follow up with the Expired/FSBO so that you have repeated contact. The prospect gives in and allows you to obtain the business after constant follow up. Performance: The consistent quality of how we perform each day will be the key to prospecting efficiently. Always strive to offer exceptional customer service. Times are tough right now so I am concentrating on polishing up each and every customer that comes into my life. Commit to giving the best performance no matter what else in

wisconsin real estate magazine

may 2011

www.wra.org/wrem

The key to longevity your life may be affecting you. We all have issues to deal with. Don’t dwell on them. Remain positive. Excellence everyday: Excellence is what all consumers expect every day from every salesperson so when they encounter less than what they expect, the consumer is disappointed and they take their business elsewhere. Competency: Knowledge is power and that keeps me at the top of my game every day. Continue to seek out educational opportunities to strengthen your knowledge base. Your tool kit must be full of sharp tools ready to go to work. Technology: We cannot prospect adequately without the assistance of systems. Today, technology gives us the upper hand to keep in touch with all our customers. Embrace ways to organize your book of business and implement the use of your cell phone, lap top and digital camera to make you efficient. Time management is the key. Integrity: In all that we do each day, we must always have our integrity as our most important value/trait. As salespeople, our reputation is paramount. Without a solid reputation, we have nothing. Never allow your integrity to be compromised. If something is not right, don’t do it. If you feel like something should be disclosed, disclose it. Listen to your gut and keep your head held high no matter what others do.

“Be willing to share your knowledge and talents, be it with your fellow REALTORS® in the office, your competition or a buyer and seller … it feels good to give.” prospects that are willing to listen to you and are loyal to your cause. Remember: SWSWSWN Some transactions will go through Some transactions won’t go through So what NEXT!! Generosity: Salespeople sometimes get a bad rap. If only the members of the public knew how generous many of us are. I try not to assign a dollar to all I do. I enjoy making money, but I also enjoy giving and helping others. Commit to increasing the amount you give of yourself and to others. Be willing to share your knowledge and talents, be it with your fellow REALTORS® in the office, your competition or a buyer and seller … It feels good to give. To be a top performer, you have to be different. The reason that Pavarotti, Michael Jordan, Lance Armstrong, Jack Welch, Jim Carrey and Oprah are

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





Integrity is key to your long term success in the real estate business. Follow our code of ethics to the letter of the law.

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Never give up and the ability to say No:

 

In our business we are allowed to be selective so don’t work with everyone. Work with those

Likewise, you need to show consumers why you’re not just one of the herd. You need to prove your value. So start thinking about how you stand out from the rest. Once you can communicate that solidly to prospects, you’ll find that it’s always easy to answer that ever important question: Why should I hire you?

   

Do not allow others to influence you to stray from the straight and narrow.

wisconsin real estate magazine

paid at the highest level in their fields is because they are different. They are their own brands. They can demonstrate why they are different and why they are worth the money.



may 2011

legislative

WRA to pursue Mandatory Vacant Land Condition report By tom Larson

s part of our legislative agenda for the 2011—12 session, the WRA will be pursuing legislation to require sellers of vacant land to complete a vacant land condition report (VLCR). As with other required disclosures, the goal is to make sure buyers are aware of information known by seller that could have a significant impact on the buyer’s decision to purchase the property, or the price the buyer is willing to pay for it.

time they have purchased the property. Requiring sellers to complete a VLCR will likely reduce the disputes related to the failure to disclose important conditions affecting the property. Better seller compliance with new disclosure requirements. To achieve better compliance with these regulations and to reduce the number

Background Historically, sellers of Wisconsin real estate had no duty to disclose any information to buyers in a real estate transaction. Buyers who purchased real estate assumed tremendous risk relating to the condition of the property, including conditions that were intentionally concealed by the seller. This doctrine was known as caveat emptor, or “let the buyer beware.” Over time, courts and the legislature eroded away this doctrine and began imposing liability on sellers who concealed defects, interfered with a buyer’s attempt to inspect a property, and in cases where the seller intentionally misrepresented material facts related to the property. In 1991, Wisconsin lawmakers adopted the seller disclosure law to ensure that buyers of residential real estate are aware of any adverse conditions affecting the property. Under the law, most sellers of one to four family dwellings are required to complete a real estate condition report and disclose any known defects about the property to prospective buyers prior to the time the buyer purchases the property. See Wis. Stat. Ch. 709. If the seller fails to provide the buyer with the RECR within 10 days after the offer to purchase has been accepted, the buyer may rescind the offer to purchase.

of lawsuits filed by unhappy buyers, the Wisconsin Legislature has imposed a number of new disclosure obligations upon sellers of vacant land. For example, owners of vacant land have an obligation to disclose any known penalties under the use value law, and whether the property is enrolled in the managed forest program. The legislature will likely continue to impose new disclosure requirements and it would be easier for sellers to comply with the requirements if a mandatory disclosure form contained all of the requirements. More user-friendly than Offer to Purchase. Because these disclosures are mandatory, they must be made even though state law does not require a disclosure form for vacant land transactions. While many of the required disclosures have been incorporated into the WB 13 Vacant Land Offer to Purchase (Offer), the Offer may not contain all of the necessary disclosure obligations due to the practical difficulties in amending the Offer every time the legislature or court creates a new disclosure requirement. In addition, the disclosures contained in the

While not required by law, several voluntary disclosure reports related to other types of transactions have been produced by the WRA and are used frequently by REALTOR® members. For example, the WRA has produced condition reports for commercial property (WRA Real Estate Condition Report C) and vacant land (WRA Real Estate Condition Report V).

Offer are less interactive than the disclosures in the VLCR. In other

Why Require the Use of a VLCR

disclosure obligation in the VLCR.

Fewer disputes related to disclosure issues. In recent years, the regulatory environment affecting vacant land has changed significantly. New regulations at both the federal and state levels have been adopted that affect how vacant land can be used, where development can occur, and the type and amount of fees paid for certain activities. As a result, a growing number of complaints, violations and lawsuits have resulted

because buyers were not aware of these regulations or fees prior to the

wisconsin real estate magazine

may 2011

words, the Offer, unlike the VLCR, does not require the seller to indicate whether each individual condition applies to the subject property by indicating “yes” or “no.” As a result, a seller may be more likely to overlook a disclosure obligation contained in the Offer, than a similar

* For more information regarding the proposed mandatory VLCR, 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.

www.wra.org/wrem

Kloppenburg - Prosser As close as it gets

By joe murray

When you compare the county-by-county election results in the 2011 State Supreme Court race to those in the November 2004 Presidential race, the similarities are striking. JoAnn Kloppenburg carried virtually all the counties carried by Democrat John Kerry and Dave Prosser won virtually all the counties carried by Republican George Bush. The 2004 Presidential race in Wisconsin, much like the 2011 Supreme Court race, was decided by less than half a percentage point.

he eventful 2011 State Supreme Court race is historic for many reasons, but particularly historic from a voter turnout perspective. The cumulative vote total set an alltime record in Wisconsin Supreme Court elections. The outcome was also noteworthy for several other reasons, some of which may come to light in this summer’s recall elections where control of the Wisconsin State Senate could be at stake. Democrats hope to regain control of the Senate by ousting Republicans who voted for Governor Walker’s collective bargaining changes. Republicans are countering with attempts to recall Democratic Senators who fled to Illinois to delay that vote. Here are a few observations in the aftermath of the highly-charged Supreme Court race. •

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A review by “Smart Politics” of past elections for Supreme Court found the April 5th election set an all-time Wisconsin record for the total number of votes in a Supreme Court contest. Approximately 1.5 million voters went to the polls in April, shattering old records set by Donald Steinmetz, 1980 (1.32 million), Roland Day, 1976 (1.16 million), and Horace Wilkie, 1964 (1.04 million). All three of the previous records took place during presidential election years. The record setting vote totals in this year’s race were generated, in large part, by the partisan fight over public employee collective bargaining rights. Democrats and unions framed the Supreme Court election as a potential rejection of Governor Scott Walker, his controversial collective bargaining restrictions, as well as his spending cuts to bring the state’s finances into balance. Their logic: If Prosser was defeated in April and the State Senate flipped from Republican to Democratic control through recall elections, then Walker himself might be vulnerable to a recall in 2012.

The Supreme Court election results illustrate a closely divided state. While voters may not have delivered a “stinging rebuke to the Republican Party,” as Democrats When you compare the and the unions hoped for, the big question is: Will voters respond in a similar way when they county-by-county election vote in recall elections this summer? With a results in the 2011 State state as closely divided as Wisconsin, it may Supreme Court race to be more difficult for Democrats to flip three State Senate seats and take the majority. The those in the November GOP has a 19-14 seat advantage in the Senate.

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2004 Presidential race, the similarities are striking.

Prosser’s victory denied them their first goal. Howard Schweber, a University of Wisconsin expert in judicial politics, summed up the outcome this way: “There was a great deal of talk about a tsunami of rage and disappointment that would deliver a stinging rebuke to the Republican Party. That didn’t happen. Nothing remotely like that happened.” Democrats and unions did motivate their voters and get them to vote in record numbers. So did Republicans. •

Why have Supreme Court races become so polarized in the last decade? The simple answer is money. Prior to the last decade, Supreme Court races were typically not big money elections. Today, races for the high court involve all the elements of higher profile races such as governor, attorney general, U.S. senate, etc. Third parties outspend the candidates’ own campaigns by millions; talk radio highlights the differences between the candidates, blogs and social media are all involved; and business groups, labor and environmental organizations all advocate for “their” candidate. Supreme Court elections are no longer sleepy affairs covered only by local newspapers.

“Nonpartisan” Supreme Court races have become increasingly partisan and the 2011 Kloppenburg – Prosser race was the most partisan yet over the last 10 years. Herbert Kritzer, a political scientist and professor at the University of Minnesota Law School, has tracked the partisan voting patterns of Supreme Court races in Wisconsin and identified the 2011 race as “… the most partisan (voting) pattern that we have seen (in Wisconsin) at least since World War II.”

Prosser ran strong in six of the eight Republican held districts up for potential recall, poorly in one and roughly even in another. He ran strong in two of the eight seats held by Democrats up for potential recall, and respectable in a third target. If the Kloppenburg-Prosser race is a predictor of individual district voting behavior, Republicans have to feel better about their chances for survival after the Prosser victory, narrow as it was.

Predictions on the outcome of hotly contested recall elections are difficult at best. As summed up by political scientist John Coleman of the University of Wisconsin-Madison, neither side can be certain of victory: “Wisconsin is a 50/50 state and has been for a while. People lost sight of that with Obama’s big win in 2008 and the Republicans sweeping in 2010. But overall, this is a state on a partisan knife-edge that can be mobilized to produce victories for conservatives and victories for liberals. Last night (the Kloppenburg-Prosser early returns) was a prime example and reminder of that, very nearly the perfect tie.” Joe Murray is Director of Political and Governmental Affairs for the WRA.

wisconsin real estate magazine

may 2011

legislative

Improving Real Estate Regulations State budget significantly improves regulation of licensees in Wisconsin

he pending state budget bill includes a significant proposal to improve the regulation of real estate licensees in Wisconsin, enhancing the effectiveness and responsiveness of regulations in a fast-changing market while continuing to ensure consumers are fully protected. The WRA strongly supports these changes.

in structure, the proposed changes are important for the real estate industry in Wisconsin for the following reasons: •

A new department: The state budget proposes to rename the DRL, creating instead the new Department of Safety and Professional Services (DSPS) and transferring to it many of the regulations currently performed by the Department of Commerce’s Division of Building and Safety. (This transfer was necessitated by the elimination of the Commerce Department which was replaced by the new Wisconsin Economic Development Authority.) This change will create a vastly different DRL and thus dramatically expand the scope of issues the department secretary must deal with. The new department will thus have a much broader focus, regulating both codes and professions.

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New board and duties: The new REEB will continue to be a seven member board, appointed by the Governor and approved by the state Senate. The proposal changes the make-up of the board to include five real estate licensees and two public members - a ratio similar to other boards. In addition to maintaining the duties of reviewing complaints and deciding appropriate disciplinary measures for violations, the new board will also assume the following duties:

Background The Department of Regulation and Licensing (DRL) regulates Wisconsin real estate licensees primarily through setting educational criteria for obtaining and maintaining a license, creating and updating standardized forms required by licensees for use in real estate practice and protecting consumers through the complaint process and enforcement of discipline. The responsibilities for these functions are divided between the DRL secretary and the Real Estate Board (REB). The REB is made up of licensees and consumers appointed by the governor and approved by the state Senate. Governor Walker’s biennial budget bill (AB 40 and SB 27) proposes to revise current law by changing the Real Estate Board to an examining board, called the Real Estate Examining Board (REEB) and transferring certain regulatory responsibilities from the secretary to the new board. Under the current model, the REB is advisory to the secretary. This model gives the final authority to approve all forms, education curriculum and promulgation of rules to the secretary rather than the board, which is made up of both practitioners, who understand the real estate industry and everyday practice issues and consumer members. The current system has created delays in several areas including: •

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Administrative rules: Much-needed changes to administrative rules effecting practice has taken months, or even years, to be approved. In many cases, these delays result from the inability of department staff and/or the secretary to dedicate the necessary time and focus. Under the budget proposal, the new REEB is empowered to address these issues in a timely fashion to the benefit of consumers, licensees and the department. Education: Similarly, the curriculum for continuing education has often been delayed as recommendations from the Real Estate Curriculum and Examinations Council has waited for secretarial approval. Under the budget proposal, the Council will give the REEB their recommendations and the REEB will have the authority to set the curriculum, thus the ability to publish the curriculum before the two-year continuing education biennium begins, providing educational providers, including technical colleges, the time they need to properly prepare course content in a timely manner. State approved forms: Lastly, needed and time-sensitive updates and improvements to state-approved forms have also seen long delays. The budget bill proposal would authorize the REEB to approve form changes recommended by the forms committee, providing timely changes benefiting licensees and consumers alike.

Proposed new structure The new Real Estate Examining Board structure is not all that new. This structure is similar to 18 of the 23 professional boards currently regulated by the Department. The proposed make up of the new REEB is also similar to existing boards regulating other professions. However routine

wisconsin real estate magazine

may 2011

By Michael theo

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Grant and issue licenses,

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Approve real estate forms,

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Create and approve post and pre-license education requirements,

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Appoint members of the Real Estate Curriculum and Examinations Council and make the council advisory to the REEB,

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Appoint members of the Real Estate Contractual Forms Council and make the council advisory to the REEB; and

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Authority to promulgate and interpret rules.

These changes better protect both the public and licensees by ensuring educational requirements and forms reflect the marketplace and disciplinary enforcement is swift and just. •

Similar to other professions: The proposal transfers to the new REEB the regulatory duties is similar to existing boards overseeing other professions including accountants, architects, professional engineers, designers and land surveyors, geologists, hydrologists and soil scientists, chiropractors, dentists, optometrists, doctors, nurses, pharmacists, psychologists, veterinarians, social workers, funeral directors, barbers and cosmetologists.

Conclusion We support these proposed changes because they will help the new department better perform its regulatory duties; will better serve the professional development and needs of real estate licensees; and will most importantly better protect Wisconsin consumers. We ask all REALTORS® to actively support these changes and encourage your state lawmakers to also do so. Michael Theo is Senior Vice President of Legal and Public Affairs for the WRA. www.wra.org/wrem

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