what’s new in the condo offer?
Political chaos in wisconsin
Highlights of the revised and updated WB-14.
Numerous recall elections slated for this summer.
April 2011 $5.00
MAGAZINE
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table of contents
features 6 8 16 27
WRA Launches New Website Powerful search tools, faster access and easier shopping are just a few of the great features the WRA’s new website has to offer.
april
12 18 24
Uncovering the Truth: Inspection Contingency Notice or amendment? Learn how to cut through the confusion in a real estate transaction.
Difficult Budget for Difficult Times Controversy and debate surround Governor Walker’s biennial budget bill for Wisconsin.
www.wra.org/wrem
vol.
27, no. 7
articles
Marketing is the Chance to Tell Your Story Use marketing to differentiate yourself from the competition and gain customer loyalty.
2011 |
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What’s New in the Condo Offer?
Highlights of the revised and updated WB-14.
The New NEW WB-11 Residential Offer to Purchase Updated language in the newly revised 2011 Offer to Purchase increases clarity for users.
Sales Tip: Follow Through with Follow-up! Effective follow-up with prospective clients is key to the success of any REALTOR®. Learn how to improve your skills with these three tips.
Political Chaos in Wisconsin Wisconsin’s political upheaval may prompt unprecedented numbers of recall elections this summer.
Lawmakers Consider Changes to Wisconsin’s Wetland The WRA is working to ensure that any modifications to the state’s wetland mitigation program benefit property owners as well as the environment.
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News
inside the wra
with bill malkasian
Top News Stories in and Around the Industry Housing Council, laments, “It’s been a long time number of people in those markets paying too much United Way Honors the Stark Family coming.” The Pewaukee-based commission has for their rental housing will double from around for Service we are living in uncertain ast month,toI had the chance to aattend a series review of not conducted comprehensive ofAdmittedly, housing
L
70,000 currently to a whopping 140,000 by 2010.
legislative and economic times. But no conferences around the country. Not surprisingly, patterns since the 1970s. Some say a partial solution would be for the U.S. matter how challenging the marketplace when people learned I was from Wisconsin, their government to reverse course on housing policy and the state budget situation, the bottom line first question was, Wisconsin “So, what’s going on in Wisconsin, Receives Millions toorEase substantially increase funding for rental assistance, Community is we’ve all got to keep doing what we do. The anyway?” We are living in interesting times to Crisis be sure. And it’s Foreclosure United Way of Dane County for working families. ® Business JournalREALTORS (WI) (09/30/08) WRA remains particularly committed help to being there each step crucial now more than ever thatMilwaukee we at the Wisconsin UnitedAssociation Way of Dane County of the way. Together, we can help move our industry bring you the latestThe on state our industry. of Wisconsin is due to receive nearly $39 NAR Releases Free FHA Toolkit recognized the Stark Family with forward. million in federal funds to stabilize neighborhoods Wisconsin REALTORS® Association (10/30/08) With this in mind,Society our April issue includes a series of articles the 2008 Tocqueville and stave off a spate of abandoned homes. According Awardaddressing for outstanding service to recent developments in Madison, including a piece NAR and the WRA are eager to help you meet the to HUD and Gov. Jim Doyle, the funds are separate the Dane community on County Governor Walker’sand budget from bill approximately and an exploration of how $9.2 million the government is BillUnited Malkasian Until next time,current challenges of the troubled economy. We Way. The Tocqueville Society Award celebrates Wisconsin’s political upheaval may the prompt unprecedented awarding city of Milwaukee, where the foreclosure know that you need resources that can help you WRA President and acknowledges people or families, suchelections as the this summer. numbers of recall rate is currently 9.9 percent. HUD is awarding the close transactions, and you need them at little or no Starks, who have made a major impact on the quality funds via its Neighborhood Stabilization Program, of life in Dane County There’s throughatheir exceptional lot more going on than just which the budget of course, under almostissue, $4 billion is being allocated to service and commitment so to the we community. also give you an article on wetland mitigation, focusing on redevelopment local and state governments for the our efforts to find solutions thatofmake wetland more abandoned andmitigation foreclosed ahouses.
City Housing Authority Receives effective tool for property owners without compromising their 100-Unit Grant important role in our environment. Sites: Not Just for Personal Bill Milwaukee Journal Sentinel (09/25/08) Pabst, Georgia Connections Anymore
withauthority the Legislature, we’ve been working closely with The city of Milwaukee’sAlong housing is due Minneapolis-St. Paul Business Journal (09/29/08) Grayson, to receive $6.7 million in Hope VI thefederal Department of money Regulation Katharine and Licensing, and we talk about to build 100 new housing units.ofThe units will some our100 progress in a series articles on rule changes ® St. of Paul, Minn.-based REALTORand Teresa Boardman be constructed in a 2.5-mile and offers; will include forms;area condo and tips on when to use a notice versus says Flickr, Facebook and other an social networking 29 public housing andamendment affordable in rental units; transactions. real estate sites make it easy to meet people who might nine affordable housing units for income-eligible eventually become clients. While many professionals families; and 62 moderately priced, open-market This April marks the 43rd anniversary of Fair are using theseHousing sites toMonth. make Fair business contacts condominiums. HUD Secretary Steven C. Preston housing laws protect the right ofand every individual and family live background companies use them to toconduct comments, “Milwaukee’sin the housing has homeauthority of their dreams, inchecks the neighborhood of their choice. or recruit new workers, many simply want demonstrated it has the leadership to lead and Here in Wisconsin, we have one of the finest equal who opportunity to connect with people have similar interests. revitalize neighborhoods and transform lives. committees in the country, and IAccording hope you’ll in supporting their sell is dead. It tojoin Boardman, “The hard Cities like Milwaukee change and grow and need to doesn’t work door-to-door, and it doesn’t work on important efforts to ensure equal housing opportunities for all. revitalize housing to make sure many aren’t priced social networks.” On Flickr, Boardman connected out.” Milwaukee is one of a half-dozen housing If you haven’t already, I also encourage you photographer to check out who our new with a fellow eventually used her authorities nationwide to receive new Hope VI website at www.wra.org. Thisservices projecttowas a huge undertaking purchase a home. grants. and a real team effort between staff and leadership, with crucial
Foreclosures Push Rents participation from members. Already, we’re receiving some greatHigher, Housing Study Delay Frustrates Squeezing Low Income feedback. You can find a handy guide to the new site in Families this Advocates
Public Radio (09/21/08) Milwaukee Journal Sentinel (10/07/08) Williams, Scott month’s article, “Ten Things YouMinnesota Should Know About(MN) the New WRA Olson, Dan
Website.” In Minnesota’s Twin Cities, a wave of home Two years after promising the Milwaukee metro foreclosures has pushed more people into the rental area’s first major housing study in three decades, Soon, our 2011-12 planning process will begin. speaking apartment sector.We’ll Theberesult is an intensifying the Southeastern Wisconsin Regional Planning to many of you directly aboutdemand the latest developments in Paul’s your rental housing on Minneapolis and St. Commission (SEWRPC) is still struggling to get the markets, look will forwardstock, to hearing on-the-ground so muchyour so that the vacancy rate is very low effort launched. Proponents hopeand the Istudy andbe rents are on the rise. This, D.C., in turn, means lowperspective. On May 9-13, we’ll going to Washington, serve as a catalyst for improving affordable housing income familiesDelegation. face higher monthly rents andthewillcity’s visit suburbs. the Hill May our working Congressional opportunities throughout But 11 with even though discussion topics will include thetheir futureincome of thehovers GSEs, at unchanging commissioners have yetImportant to assemble an advisory levels.deduction, Since 2005, the Twin Cities apartment committee to oversee theretention research ofor the set mortgage a specific interest extension of flood vacancy rate has dipped from 7 percent timetable for conductinginsurance the survey. Phil Evenson, and many real estate financing issues like the definition to closer to 4 percent. Average monthly rents over that same the commission’s executive director, saidorother issues residential of the QRM, qualified mortgage, and other Dodd time span are up more than $25, rising to more keep getting in the way. Frank The delays have frustrated provisions that will impact real estate financing for years than $850. The St. Paul-based Wilder Foundation housing advocates the most. Bethany Sanchez, to come. recently reviewed income data for several Twin Cities vice president of the Metropolitan Milwaukee Fair counties. The organization’s research found that the
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cost. NAR has just released an all-new FHA Toolkit online for FREE to help you get clients the financing they need in a credit-strapped environment. It is one of the most comprehensive toolkits NAR has ever produced, and it’s available to all REALTORS® right now by visiting the link below. They also have launched a new page called “NAR Helps You Navigate the Current Economy” where you can find dozens of great products and resources, like the FHA Toolkit, for free or at a steep discount. Visit www.Realtor. org/NARHelpsYou for links to these great programs and products.
Home Loans Going Strong, Albeit a Bit Tighter, in Area Wisconsin State Journal (10/17/08) Balousek, Marv
Despite the ongoing national credit crisis, property professionals say mortgage money remains available throughout southern Wisconsin to home buyers with solid credit. Ron Steinhofer, manager of Marshall & Ilsley Bank’s regional home lending group, states, “There’s plenty of money for home loans out there. It is slightly more difficult to qualify than two or three years ago, but if you have a good credit score, a good job and a down payment, money is available.” Steinhofer adds that banks still are making loans via such programs as Fannie Mae and Freddie Mac. Furthermore, credit standards remain about the same as they were six months ago, meaning that qualified home buyers can get loans if they have the proper income verification. On the downside, banks have been less willing to make loans with higher loan-to-value ratios. In addition, conventional financing without a down payment has indeed disappeared. However, 100 percent financing is still available with Veterans Administration and Rural Development home loans.
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
NAR’s REALTOR Benefits® Program
Robert Keefe, Chairman-Elect rkeefe@keeferealestate.com
Take advantage of NAR’s REALTOR Benefits® Program. Choose from a variety of value-added offers and savings from industry leaders. Plus, every partner provides products and services that you can use every day, in your business and personal life. A detailed description of the member benefits is available online at www.realtor.org/realtor_benefits.
Renny Diedrich, Treasurer rdiedrich@coldwellhomes.com
Marketing Entertainment® Book Lowe’s REALTOR.com® REALTOR Team Store®
William E. Malkasian, cae, President wem@wra.org Editorial Staff:
Educational Tools ABR SRES ePRO SFR Green
Technology Dell DocuSign® Hewlett Packard Lenovo relay® SentriLock LLC Xerox zipForm®
William E. Malkasian Publisher
Robert Uhrina Managing Editor
Joe Leschisin
Office Solutions FedEx® FedEx OfficeSM Ifbyphone (Coming 2011) OfficeMax (Coming 2011)
Financial Services & Personal Protection American Home Shield NEW! IdentitySecure® REALTORS® Federal Credit Union Subject to change.
Travel Avis Budget Hertz
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.
Insurance Liberty Mutual REALTORS® Core Health Insurance REALTORS® Dental Insurance Victor O. Schinnerer (Coming 2011)
Free Fair Housing Resources from NAR
Right Tools, Right Now Initiative Offers Fair Housing Resources
Permission to reprint or quote any material from this issue is hereby granted, provided the Wisconsin Real Estate Magazine is given proper credit in all articles or commentaries, and the WISCONSIN REALTORS® ASSOCIATION is provided with a copy of any reprint. Advertising of third party products and services herein does not imply endorsement by the WRA unless specifically stated. Furthermore, the WRA does not endorse, approve, or otherwise warrant the accuracy or legality of any information or content contained in advertisements. Any questions regarding advertising policies should be directed toward the editor.
Make the most of Fair Housing Month with free resources from the National Association of REALTORS®’ Right Tools, Right Now program, covering fair housing regulations and housing discrimination issues. To help promote Fair Housing Month, we’ve highlighting three e-products that can be downloaded and printed for immediate use: Fair Housing Sales: Pocket Guide, Fair Housing Rental: Pocket Guide and Fair Housing Handbook - Fourth Edition. All of these tools are offered free and at-cost through NAR’s Right Tools, Right Now initiative.
Fair Housing Rental: Pocket Guide (eProduct)
Fair Housing Sales: Pocket Guide (eProduct)
This handbook is the most comprehensive fair housing resource available in the industry. Topics include suggested fair housing office procedures, background on fair housing regulations, samples of the Department of Housing and Urban Development Equal Housing Opportunity poster logo, equal service report forms, information on the NAR/HUD partnership and a self-assessment questionnaire. This is a great resource for brokers, agents and associations. (Free electronic copy.)
This pocket reference guide is a must-have for brokers and agents alike. It contains examples of buyers’ and sellers’ most commonly asked questions relating to housing discrimination as well as the appropriate responses. (Free electronic copy.)
Contact Us: 4801 Forest Run Rd., Suite 201 Madison, WI, 53704-7337 (608) 241-2047 • (800) 279-1972
Order at www.wra.org/fairhousingpocketguide.
This pocket guide is a great tool for anyone involved with the management or leasing of real estate. The information covered includes fair housing laws, the responsibilities of real estate professionals and checklists to ensure proper procedures. (Free electronic copy.) Order at www.wra.org/fairhousingrentalpocketguide. Fair Housing Handbook: Fourth Edition (eProduct)
legal hotline: (608) 242-2296 • (800) 799-4468 Order at www.wra.org/fairhousinghandbooknar. general fax: (608) 241-2901 products/education fax: (608) 241-5168 legal hotline fax: (608) 242-2279 REGISTRATION FORM HOTEL INFORMATION president fax: (608) 242-2267 FAIR HOUSING CONFERENCE & AWARDS e-mail: editor@wra.org Website: www.wra.org Plaza Hotel The WRA commemorates FairCrowne Housing Month,Ave. marking 4402 East Washington LUNCHEON 608-244-4703 APRIL 28 & 29, 2011 43 years since the adoption of the historic Fair Housing Room Rate: $114 single/double PLEASE PRINT Act. The landmark civil rights legislation – also known Name(s) of Attendee(s) _____________________________ as Title VIII of the Civil Rights DIRECTIONS Act – was enacted on ________________________________________________ April 11, 1968. Each April, theLocation: nationLocated honors the off of Interstate 90/94/39 on Firm Name/Group _________________________________ Highway 151S (exit 135A). Travel 1/2 mile. Hotel will Join in learning and sharing fair housing knowledge at the Fair occasion by rededicating itself to your equal housing Address _________________________________________ be on right. Housing Conference on April 28-29 at the Crowne Plaza Hotel opportunities for all. Fair housing laws protect the City, State, Zip ____________________________________ Parking: Complimentary. Accessible entry is located at the hotel’stomain entrance. in Madison. The program includes community credit solutions, right of every individual and family livelobby in the home Daytime Phone ___________________________________ facebook: www.facebook.com/wisconsinrealtors new protected bases, accommodating hidden disabilities and dreams, the neighborhood of their choice. Wisconsin Fair Housing twitter: www.twitter.com/wirealtors If you have a special need of duetheir to a disability, please in contact the Wis. HUD office by noon, 14,prohibits 2011. community Network’s fair housing solutions. TheApril law discrimination based on race, color, 25th Statewide linked-in: www.wra.org/linkedin Phone: 414/935-6662; TDD 414/297-1423. national origin, religion, sex, disability, familial status youtube: www.wra.org/youtube CONFERENCE FEE (includes continental breakfast and lunch) For more information, visit www.wra.org/fairhousingconference. To Portage To Wisconsin Dells and elderliness.
Wisconsin Celebrates the 43rd Anniversary of Fair Housing Month
Received by April 26, 2011 – $50 each Received after April 26, 2011 – $60 each Entree selections for Friday are:
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____ Grilled Rock Cornish Game Hen w/Natural Gravy magazine april ____ Baked Atlantic Salmon w/Cranberry Apple Butter
151
90/94
(Please specify lunch selection for each person registered)
Dane County Regional Airport
CROWNE PLAZA
135A
FAIR HOUSING CONFERENCE
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news monthly wisconsin housing report
February Housing Sales and Prices Fall By David E. Clark, Economist, C3 Statistical Solutions Inc.
View all housing statistics at www.wra.org/housingstatistics
> WISCONSIN HOUSING STATISTICS MONTHLY ACTIVITY - FEBRUARY 2011
YTD-2011
YTD-2010
% Change
16,608 5,215 $122,000
21,628 4,965 $135,000
-23.2% +5.0% -9.6%
FEB-2011
FEB-2010
% Change
New Listings Closed Sales Median Sales Prices
8,043 2,640 $117,00
11,237 2,793 $135,000
-28.4% -5.5% -13.3%
Region
Median Price FEB-2011 FEB-2010 % Change
Existing Home Sales FEB-2011 FEB-2010
% Change
Southeast South Central West Northeast Central North
$124,900 $135,000 $115,000 $111,450 $82,550 $88,525
937 494 266 490 170 275
-8.8% -13.2% -13.1% -7.5% +6.9% +37.5%
A
fter a strong showing in January, home sales in Wisconsin declined in February according to data just released by the Wisconsin REALTORS® Association (WRA). Sales of existing homes fell 5.5 percent in February compared to the same month in 2010. The median home price was down more substantially, falling 13.3 percent to $117,000 over the same period. “Harsh weather in February may be partly to blame, but so too is the fact that last year at this time buyers were rushing into the market to take advantage of the expiring federal tax rebate program,” said John Horning, Chairmanof the WRA Board of Directors. “The existence of the federal homebuyer tax rebates last year inflated February 2010 sales, making a February-toFebruary comparison impractical,” Horning said. “It’s going to be a while before the distortion in home sales resulting from these programs play out completely.” Horning noted that for the second straight month, the northern and central regions of Wisconsin outperformed the rest of the state, with February 2011 home sales in the northern part of the state increasing 37.5 percent over February 2010, and sales up
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Statewide
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$145,000 $163,000 $127,175 $121,000 $108,000 $99,500
-13.9% -17.2% -9.6% -7.9% -23.6% -11.0%
by a more modest 6.9 percent in the central region for that same period. In contrast, sales were down between 7.5 percent and 13.2 percent in the other regions. “It’s always tricky to make projections from winter sales figures, but in those regions of Wisconsin where vacation homes make up a larger share of the total market, sales are improving so far this year,” said Horning. “That is worth noting since these areas were especially hard hit during the recession,” he said. Median home prices in February were down in all regions, with four of the six regions dropping by double-digit margins. Specifically, compared to February 2010, prices dropped 7.9 percent in the northeast region and 9.6 percent in the west region. Prices declined 11 percent in the north and 13.9 percent in the southeast. Median prices also fell 17.2 percent in the south central region and 23.6 percent in the central region over the same period. “It’s difficult to pinpoint just how much of this reduction in median prices is due to seller discounting, and how much is due to a shift in the mix of homes sold in these areas,” said WRA President Bill Malkasian. The first federal tax credit program, which ended in November 2009, only allowed first time april 2011
1027 569 306 530 159 200
buyers to participate, whereas the program in place last year permitted trade-up buyers to also participate. “This may have shifted sales to higher-priced homes last year compared to this year,” he said. What is clear, according to Malkasian, is that the state economy continues to improve. The state unemployment rate stood at 7.4 percent in January (the most recent data available), which is down from 9.2 percent in January 2010, and well below the national rate, which stood at 8.9 percent last month. “It’s also clear that our housing remains very affordable even as mortgage rates have moved up in recent months,” said Malkasian. The Wisconsin REALTORS® Housing Affordability Index, which shows what percentage of a median-priced home a buyer with the median family income can afford in Wisconsin, was at 255 in February of this year, up from 216 in February 2010. “It is hard to imagine housing in Wisconsin being more affordable than right now, especially if the upward trend in mortgage rates continues,” said Malkasian. For More Information Contact: David E. Clark, Economist, C3 Statistical Solutions Inc. Office phone: 414-803-6537 www.wra.org/wrem
techhottips
View more posts at www.techhottips.com
Technology Tips & Tools for the Real Estate Professional
top 3 - be there!
Tumblr is the best of traditional blogs and social networks. While post don’t have character restrictions like Twitter, the community encourages short posts and quick updates.
Do you have a presence on the most popular websites? If not, you should! So what’s the magic in getting started?
As with twitter, people can repost your content with one click and they can even use the ubiquitous “like” button. Tumblr is used as a photo or video blog by some and the ability to post from your phone makes it so much easier. Visit www.tumblr. com/goodies once you sign up for a free account and find ways to post to Tumblr from your email, and from the most pupular smart phones.
If you want a presence on Google, give them some content. You can do this by blogging, updating content on your website, uploading photos with captions, etc. Just your general online presence might even give you some Google Juice. Have you completed your Google Profile yet ?
quick, long, boring, annoying. •
Typically you don’t want to hang around all day or for long periods of time.
So hopefully you got your profile set up, followed some people, and you’ve been listening. Ready to talk ? Sign into your Twitter account with your username and password and let’s get started ! The status update box is where you’ll be typing what you want to say:
Some of the features include:
The number two site is Facebook! I hope you have at the least a personal profile and movin’ on up – a Business Page as well. By “being” on Facebook doesn’t mean just having a profile though -interact and engage with the people you want to reach and build relationships with. Thirdly, but not least, YouTube ! Create video, my friends. Video of the area you sell and practice real estate in is a must. By creating video in your area, you are establishing expertise in the community. Keep your videos less than 2 minutes long and make sure you customize your free YouTube channel. (aka your profile).
•
Scheduled posts
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Auto post to twitter and facebook
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Create landing pages
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Add disqus comments
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Create redirect URLS using your tumblr address
After you enter your text, click [TWEET] and everyone who follows and is listening to you will see your update.
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Post from your phone
Like this:
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Create voice audio posts from your phone
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Get listed in the tumblr directory
You’re a Twit ! | Twitter Part Two Part Two: You are a Twit … or if you followed the steps in our first post about Twitter, Be a Twit, you are : )
I want to connect with you on the Top Three ! See you there….
If you want to direct your conversation at someone in particular, just type the “@” before their name like you see below. Another example of a commonly used abbreviation is shown below in the “RT” or Retweet. I decided to repeat what Melissa said as well as comment at the end of her tweet with “….. ooh! Must be exciting!”
Tumblr: the new microblogging site If you are looking for a tool that will help you organize your social media posts and get you some google juice, take time to review this product.
Let’s continue the TwitWorld and explore how to engage in conversation on Twitter, the microblog. Think about Twitter like a cocktail party.
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You can’t be a part of every conversation.
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It’s fair to say you can drift in and out of a few groups of gathered people.
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You can probably overhear quite a number of people talking. It’s acceptable eavesdropping!
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People are people. You find people controlling conversation, you find people who just listen, people telling all about themselves, people trying to sell you things.
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Talk can be funny, serious, personal, business,
april 2011
Don’t be afraid to click around and see what the various buttons do. One of the important places to check is the @Mentions tab – that will be where you can see if anyone tweeted trying to get your attention If so, you’ll want to answer back. If you want to practice a little before you talk to complete strangers, you can talk to Amy, @ AmyChorew or myself, @KimWood – well, we are probably complete strangers too – but we don’t bite. There are many mobile and desktop applications to make Twitter easily accessed and organized – but for now – get the hang of using Twitter.com. It’s a good place to begin.
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Ten Things You Should Know About the New WRA Website
The Wisconsin REALTORS® Association launched its newly re-designed website in March with the goal of streamlining its previous site of nearly 5,000 pages of content. The new website offers a whole new look and feel with bolder, brighter colors; a cleaner design and more streamlined organization. Nearly a half of a million users visit WRA.org annually to perform research, register for education, download marketing materials, watch videos and take advantage of the many member benefits the WRA offers. These 10 tips will help guide you through some of the changes on the new website.
content quickly and access information with more accuracy. You can set limiters; specify whether to search Web pages, documents or images; and even apply Boolean logic to fine tune your search results with a high level of precision.
Home Page Enhancements The new homepage was designed to help you access the WRA’s most popular resources faster than ever. Here, you will find hot spots, which provide one-click access to the WRA’s top resources without having to sift through multiple menus and submenus. You will also find quick links throughout the page, giving you immediate access to top events, industry news, videos, upcoming courses, consumer resources, career information and the WRA’s social communities.
More Comprehensive Housing Statistics The WRA’s new and improved housing reports include state and regional data in addition to county data, so you can compare your local market against larger geographic areas. Reports dating back to 2007 allow you see market performance over time and analyze trends. In the near future, you will also be able to download housing reports directly to Excel and JPEG formats for use in other documents.
Powerful Searching An improved WRA search engine provides stronger indexing, allowing you to drill into
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Visit: www.wra.org/HousingStatistics
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april 2011
www.wra.org/wrem
Find a REALTOR® Auto-complete Suggestions The WRA still maintains the largest REALTOR® referral database in the state. The newly updated Find a REALTOR® database offers additional features to help you spell contact names and can even make suggestions if you can not remember someone’s name. Simply type in a few characters and Find a REALTOR® will suggest close matches.
Wisconsin Real Estate Magazine – All News Under One Umbrella News is now centralized all in one location. The news tab includes Wisconsin Real Estate Magazine and its seven years of back issues. You will also find other publications the WRA offers, such as home sales reports, press releases, RSS feeds and more.
myWRA Improvements
Visit: www.wra.org/HousingStatistics
Updating your account information is easier than ever. A new profile options page allows you to update your profile – contact information, password, mailing address, e-mail subscriptions and virtual business card information – all in one place. You will also find in myWRA your education history, certificates of completion, on demand education and WRA contacts.
Easy Login and Password Recovery The WRA’s login area remains at the top of every page. If you forgot your username or password, simply click “Help” and follow the onscreen instructions. Your credentials will be e-mailed to you. Once you are logged in to the WRA website, you will be able to update your profile, register for courses, receive special pricing and access memberonly information.
Shopping Made Easier Sales and Marketing Tools at-a-Glance Sales and Marketing tools were housed in several locations on the old WRA website. The new website centralizes all of these tools into one location so you know where to find them every time you visit the site. You can then browse through all of the WRA’s marketing tools - side by side and discover new resources that are available.
The website’s overall shopping experience was improved to make the process more intuitive for visitors. For example, now you can view your entire shopping cart from anywhere on the website without having to check out. Additionally, when you add an item to the shopping cart, a pop-up screen appears displaying the item(s) in your shopping cart and the quantity. Quantities can also be adjusted directly from the cart, making the checkout process smoother.
Visit: www.wra.org/SalesTools
Simplified Legal Section
A Path to Follow Think of Hansel and Gretel’s trail of breadcrumbs when visualizing the new website structure. A path indicating where you are and how you got there appears at the top of every page so you can easily find the information again. The WRA’s legal section contains hundreds of pages of legal information, publications and reference materials. The WRA’s Legal Updates and Legal Update videos for a given year are now conveniently listed on one main page for easier access. In addition, articles published in the Wisconsin Real Estate Magazine are cross-referenced in the global navigation. Simply click “Legal News Articles” under the Legal tab to get instant access to the latest articles from the WRA’s legal team.
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Let Us Know What You Think These are just a few of the exciting changes you can see now on the WRA’s new website, and more features are yet to come. Check out Wisconsin Real Estate Magazine and the WRA’s Facebook Fan Page for more tips and tricks about the new website. If you have suggestions or requests related to the new site, please do not hesitate to let us know at wra@wra.org.
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Marketing is the Chance to
Tell Your Story
by pat zaby, crs, rfc
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A simple definition of marketing is the chance to tell your story. Marketing allows you to describe what makes you different from all the other agents. More importantly, you can define how people benefit from doing business with you.
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et’s say that your overall goal in real estate is to make your customers and clients better homeowners. You strive to achieve that goal by helping people understand the tax advantages, financing alternatives and investment aspects of homeownership. Your contacts wouldn’t dream of buying or selling a home with another agent because you take such good care of them and make them better homeowners. They even show their loyalty by referring friends to you when they are buying and selling real estate. Ultimately, your clients feel so secure with the services you have provided that they start buying rental property from you.
This level of service will distinguish you from your competition, create lifetime customers and generate referrals throughout the year. Ultimately, a new revenue source could emerge with a familiar
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product – single family homes. You could market the same home as a principal residence or a rental property. Now that the goals and objectives have been established, it is time to set up the marketing plan that will make it work. According to the National Association of REALTORS® Profile of Buyers and Sellers, 87 percent of buyers say they would recommend or use their agent again. Unfortunately, only about 14 percent actually do. The fallout can be attributed to two obvious scenarios: either the agents aren’t in business when the buyers need their services again, or the agents do not stay in touch with their clients. More often, it is the latter.
The most cost-effective strategy for lead generation is to establish a database of people and brand yourself to become their real estate professional. Keeping your name out there means staying in touch on a regular basis – a minimum of 36 times a year – using various methods of communication. Let’s explore some strategies that will help us stay on task and achieve our goals.
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Database
toward becoming a better homeowner, which directly benefits the customer and furthers your branding endeavor.
A commonly quoted statistic is that it costs five to seven times more to get a new customer than to keep an existing one. Especially in this struggling economy when lead generation is slow, friends, relatives, past customers and their referrals can all be excellent sources of prospects. NAR has confirmed year after year that the majority of buyers and sellers select their agent this way.
Customer loyalty, repeat sales and referrals are the goals of database marketing. It is essential that the customer values your communication, whether it is through mail, e-mail, social media, phone or faceto-face contact.
Facebook, LinkedIn and Twitter Postings When using social media, instead of describing what you ate for lunch, ranting about crazy drivers or linking to the latest cute animal video, consider posting links to articles about homeownership. Copying an article is a violation of U.S. copyright laws and constitutes plagiarism. However, it is acceptable to link to those sites, and you can even include a comment about each article. Instead of being the author of the information, you will be the purveyor. You will still be helping your readers to become better homeowners.
In a competitive market, a customer database is essential to sustained success, whether it is maintained in an e-mail program, contact manager or spreadsheet. The goal is to keep the contact information current and send frequent messages to maintain top-of-mind awareness.
Blog Blogging is a great way to tell your story. Since you control the content, you can write about things that support your point of view. You are branded according to what you write about. Blogs also increase search engine visibility and optimization, and can lead to media attention when reporters
The challenge is to make the messages interesting enough that your contacts will read them. The topics should be geared
search for sources of information and your name shows up in the results. Blogs are basically free and are considered valuable content by search engines. WordPress and Blogger are two of the most popular blog platforms. It is beneficial to have your blog located on your personal website because it will drive traffic there and increase exposure to your business. Through blogging, you promote your business by providing information and advice to the public in general while targeting your specific market. Each blog should be no longer than two to six paragraphs. If they are too long, people are unlikely to read them. The challenge is to post relevant material on a frequent basis, and this is probably what keeps most agents from starting a blog. When you are conscious about providing the content on a regular basis, you will find yourself inspired by advice that you give a prospect or client that would also appeal to your readers. There will likely be times that you write several articles and “bank” them until it is time to for them to be posted.
Website Content Quality content on a website can help to increase traffic as well as search engine visibility and keep visitors on your site longer. Some suggestions for content are: •
Your blog
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Hyperlinks to your social media pages
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All available listings through IDX
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Real Estate Today news radio widget www.retradio.com/player.php
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Articles of interest to buyers and sellers based on your point of difference
Annual Advisory An annual advisory is a meeting held once a year with past customers and clients to discuss various things that will affect their homeownership. The objective is to provide them with valuable information and possibly uncover a need for a service. The
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the service, they’ll do business with you again and refer their friends to you. Your business will grow and sustain itself with lifetime customers.
following items could be discussed: •
A list of similar homes that have sold recently and are for sale currently
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Refinancing analysis to help them determine whether it would save them money
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An amortization schedule with the increased principal contribution to compare how the lender applies the additional payments
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A list of recommended repairmen
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Rental property opportunities
Marketing is an opportunity to tell your story. If the public likes your story, they’ll do business with you. If they’re satisfied with
An equity accelerator to show them how to save interest by pre-paying their mortgage
Your product or services should be clearly distinguishable from the competition. Your story should have a value proposition that clearly defines exactly what buyers and sellers can expect when working with you. As long as the value exceeds the price, people will buy. You’ll be providing a valuable service and building a business that will last a lifetime. Pat Zaby is a REALTOR® and instructor who has spoken at WRA conventions on numerous occasions, as well as on a national basis for over 20 years. You can read his blog at www.PatZaby.com and contact him at Pat@PatZaby.com.
On the Right Track Fair Housing
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legal
What’s New in the Condo Offer? by debbi conrad
Condominium connoisseurs have been eagerly awaiting the arrival of the newly revised WB-14 Residential Condominium Offer to Purchase. Practitioners want to know: What are the most important changes in the new condo offer? Basic Changes
Substantive Enhancements
The first order of business was to change the basic offer to purchase provisions to match the basic provisions of the newest WB-11 Residential Offer to Purchase. Real estate professionals and consumers want to know that when it comes to the provisions for earnest money, document delivery, property condition disclosures, financing, closing prorations, title evidence and inspections, the same basic standards and procedures are found in all Department of Regulation and Licensingapproved offers.
The primary substantive changes made to the new WB-14 Residential Condominium Offer to Purchase relate to (1) disclosure documents, (2) condominium fees and (3) elimination of the Association Sale Approval Contingency.
The need for Addendum C was eliminated. Addendum C to the WB-14 Residential Condominium Offer to Purchase was originally created to supplement the 2000 version of the condominium offer to reflect the changes made to the condominium law in 2004. The addendum updated the condo offer by incorporating the then-new requirements for the condominium disclosure materials executive summary and the Condominium Addendum to the Real Estate Condition Report. It also outlined the procedures and deadlines for the delivery of missing disclosure materials and the buyer’s resulting rescission rights. These changes in the law have been integrated into the 2011 edition of the WB-14. Condominium sellers will still need to use the Condominium Addendum when they provide a Real Estate Condition Report to prospective buyers, but Addendum C is no longer necessary.
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(1) Condominium Disclosure Materials ◊
Disclosure Document Delivery Deadline “CONDOMINIUM DISCLOSURE MATERIALS: Seller agrees to provide Buyer, within 10 days of acceptance of Offer, but no later than 15 days prior to closing, current and accurate copies of the Condominium disclosure materials required by Wis. Stat. § 703.33” (lines 204-206 of the 2011 WB-14).
The big news when it comes to the revised condominium offer has to be the new deadline for the seller’s delivery of the condominium disclosure materials. The days when the seller and the listing agent could postpone delivery of disclosure materials to the buyer are over. The condominium disclosure materials must be delivered to the buyer within 10 days of the seller’s acceptance of the offer. While the deadline in Wis. Stat. §703.33(1) remains “not later than 15 days prior to the closing,” a seller who does not deliver the materials shortly after acceptance will be in breach of the WB-14.
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Executive Summary Unnecessary for Some Small Condominiums “The Condominium disclosure materials include a copy of the following and any amendments to any of these [except as may be limited for small Condominiums with no more than 12 units per Wis. Stat. § 703.365(1)(b) and (8)]” (Lines 206-207 of the 2011 WB-14).
The list of disclosure materials on lines 208-218 of the form includes the executive summary. A “small condominium” includes any residential or nonresidential condominium with no more than 12 units. Small condominium declarants or associations may elect to use a condensed version of the disclosure materials that would not include an executive summary. If the choice was made to use the shorter list of disclosure documents, that fact must be stated in the declaration. The disclosure materials could then be limited to the declaration, bylaws, rules, association articles of incorporation, association management agreement and other association contracts, budget, any association leases and a copy of the plat. No expansion plans, floor plans or executive summary would be required. Agents working with a small condominium with 12 or fewer units may find it prudent to contact the association for a copy of the current condominium disclosure materials. If there is any question over what materials are necessary, a copy of the declaration (and any amendments thereto) may be reviewed by an attorney to see if the shorter list of disclosure materials has been authorized. ◊
Missing Disclosure Materials Delivery and Buyer Rescissions “If the disclosure materials are delivered to Buyer and Buyer does not receive all of the disclosure documents, Buyer may, within 5 business days of Buyer’s receipt of the disclosure materials, either rescind the Offer or request any missing documents. Seller has 5 business days following receipt of Buyer’s request for missing documents to deliver the requested documents. Buyer may rescind the sale within 5 business days of the earlier of Buyer’s receipt of requested missing documents or the deadline for Seller’s delivery of the documents [Wis. Stat. § 703.33(4)(b)]” (lines 226-230 of the 2011 WB-14).
Under Wis. Stat. § 703.33(4)(a), a condominium buyer may, at any time within five business days following receipt of all of the required disclosure documents, rescind the offer in writing without stating any reason and without any liability on the buyer’s part. In the past, if the buyer did not receive all of the required disclosure materials, the buyer’s five-business-day time period for rescission never started, leaving the buyer with a way to back out of the transaction right up until closing. The law was revised in 2004 to stop buyers from waiting until the last minute to cancel the transaction due to a missing document or page. The new WB-14 states that if the buyer receives condominium disclosure documents that are missing one or more of the documents required by § 703.33(1), the buyer will have five business days to either rescind the offer in writing without stating any reason, or to request that the seller deliver the missing documents. If the buyer neither rescinds nor requests missing documents within the five business days, then the delivered materials will be deemed satisfactory and the buyer will have
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no further right to rescind based upon those materials. The seller has five business days following receipt of the buyer’s request to deliver the missing documents to do so. The buyer may rescind the sale within five business days following the buyer’s receipt of the requested missing documents or the seller’s deadline for delivering the documents, whichever is earlier. ◊
Buyers Must “Actually Receive” Condo Disclosures “The Parties agree that the 5 business days begin upon the earlier of: (1) Buyer’s Actual Receipt of the disclosure materials or missing documents or (2) upon the deadline for Seller’s delivery of the documents” (lines 231-232 of the 2011 WB-14).
By now most real estate practitioners should be familiar with the story of the condominium disclosure materials that were delivered to the agent named as the buyers’ recipient for delivery. This agent was in Wisconsin while the buyers were at their winter home in Florida. Wis. Stat. §703.33(4) requires that condominium buyers be given five business days from receipt of the required condominium disclosure materials to rescind the contract. On January 12, the disclosure documents were personally delivered to the agent, as the buyers’ recipient for delivery, but the buyers did not actually receive the documents in Florida until January 23. On January 24, the buyers gave notice to rescind their offer. The sellers objected and sued for the earnest money. The court found for the sellers, concluding that because the agent, as the buyers’ recipient for delivery, received the documents on January 12 and the buyers did not rescind until January 24, the rescission was late and ineffective. The agent’s receipt of the disclosures, not the buyers’ receipt in Florida,
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started the clock on the time frame for rescission according to the courts. This problematic result is addressed 0n lines 231-232 of the new WB-14 by making it clear that the five business days begin upon the buyer’s actual receipt of the disclosure documents. As it says on lines 66-67 of the WB-14, “‘Actual receipt’ means that a Party, not the Party’s recipient for delivery, if any, has the document or written notice physically in the Party’s possession, regardless of the method of delivery.” For further discussion of this problem, see “Document Delivery Dilemma, Condominium Style” in the February 2008 issue of the Wisconsin Real Estate Magazine, at www.wra.org/WREM/Feb08/ DocDeliveryDilemma. (2) Condominium Fees and Assessments ◊
Seller Must Be Current with Assessments “UNPAID CONDOMINIUM ASSESSMENTS: All unpaid assessments shall be paid by Seller no later than closing” (line 443 of the 2011 WB-14).
This is a new contractual obligation that is not required in the statutes. ◊
Buyer Should Investigate Other Possible Closing Fees “OTHER FEES: The Association may charge other fees at, or subsequent to, closing which may include storage, Additional Association, reserves, start-up, administrative, etc. fees” (lines 2829 of the 2011 WB-14).
This provision generally alerts buyers that there may be other fees charged by the Condominium Association or an Additional an Association either at or after closing. It is best for buyers to closely review the disclosure documents and perhaps ask the association for information about other fees that may be charged to a new unit owner. “Additional association” is defined on lines 73-74 as “any community, neighborhood, subdivision, master or umbrella association with the power to levy fees or assessments on the Property owner.” (3) Right of First Refusal Provision Removed The 2000 version of the WB-14 contained a contingency at lines 306-307 that required the seller to obtain and deliver to the buyer a waiver of the condominium association’s right of first refusal. That provision was not included in the 2011 condominium offer. Condominium associations holding first rights of refusal have fallen out of favor because many of them were intended or implemented as a means to discriminate in violation of the fair housing laws. First rights of refusal have also become problematic under various financing programs. The provision has not been widely used, and so it was removed. The new WB-14 has an optional-use date of March 1, 2011, and a mandatory-use date of July 1, 2011. Debbi Conrad is Senior Attorney and Director of Legal Affairs for the WRA.
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Uncovering the Truth: Inspection Contingency – Notice Versus Amendment Urban Legends The Second Installment in a Series of Articles Dispelling Real Estate Untruths
By cori lamont
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necessary. Licensees should remember that a short time frame will not provide the buyer time for all of the enumerated items to occur, especially if the home inspector is not able to get into the property right away. Additionally, licensees should keep in mind that the time frame is counted in days, running Monday through Sunday, meaning the time moves quickly.
n January we kicked off a series of articles exposing the truths of real estate practice and dispelling any perpetuated myths. This month the focus is on the Inspection Contingency, specifically the use of amendments versus notices. Before breaking down the myths, let’s go over some of the basics. When drafting an offer to purchase, the Inspection Contingency should be completed to include: •
•
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Information, if any, included on the blank lines regarding specific property components that the buyer would like to have inspected by a qualified independent inspector or independent third party.
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The Truth: There is no right or wrong way to draft the right to cure provision. Licensees should explain the provision and discuss the buyer’s options. Below is an overview of the provision. The buyer delivers to the seller a Notice of
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Seller shall have the right to cure. The seller then has three options: 1.
Deliver to the buyer within 10 days written notice that the seller will cure the defects, thus keeping the offer alive. The seller must cure the defects in a good and workmanlike manner and deliver to the buyer a written notice detailing the work done within three days prior to closing.
2.
Deliver to the buyer written notice that the seller will not cure the defects. This option makes the offer null and void.
3.
Do nothing. This also makes the offer null and void.
A selection of either (shall) or (shall not) in the right to cure provision.
Urban Legend # 1: The right to cure provision should always say, “seller shall have the right to cure.”
A deadline that provides the buyer sufficient time for the inspection, noted follow-up inspections in the inspector’s report, additional inspections of any component inserted on the blank lines, negotiations through amendments, if necessary, and Notice of Defects, if
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Defects and a copy of the inspection report. The right to cure provision is drafted to say:
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Seller shall not have the right to cure. The offer is null and void.
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Urban Legend # 2: A notice and an amendment are the same. The Truth: The notice and the amendment are distinctly different. The Inspection Contingency makes this distinction: “Caution: A proposed amendment is not a Notice of Defects and will not satisfy this notice requirement.” A WB-40 Amendment to Offer to Purchase is used when the parties are agreeing to modify terms; the WB-41 Notice Relating to Offer to Purchase is utilized when one party is giving notice that does not require the other party’s agreement. If the buyer wishes to negotiate terms after a home inspection, then the buyer would draft an amendment. If the buyer would like to provide a Notice of Defects, then the buyer would draft a notice and attach the inspection report. An easy way to remember to reserve the buyer’s negotiating rights is to think of, “A before N,” “amendment before notice,” or 40 before 41. A Notice of Defects will activate the right to cure provision of the offer. Therefore, once a buyer provides a Notice of Defects, the situation is dictated by the right to cure language. Since the amendment is not a notice, the amendment provides the parties with the ability to negotiate terms without activating the right to cure provision. According to lines 421-423 of the 2011 WB-11 Residential Offer to Purchase, a copy of the written inspection report must accompany the buyer’s Notice of Defects. The contract provides that the contingency is waived unless the buyer delivers to the seller, “a copy of the written inspection report(s) and a written notice listing the Defect(s) identified in those report(s) to which the Buyer objects (Notice of Defects).”
The Inspection Contingency provides that the buyer may give a written notice listing the defects identified in the report to which the buyer objects.
Urban Legend # 3: An amendment must be given before a notice. The Truth: A buyer is not required to provide an amendment prior to a notice. However, a buyer wishing to negotiate terms would provide an amendment first. A buyer may also choose to skip the amendment process and go right to the Notice of Defects. If the buyer provides a notice and the parties later decide they would rather negotiate the defect issue, then the parties should document a withdrawal of the Notice of Defects with an amendment. Any amendment proposed after a Notice of Defects has been given should include a provision agreeing to the withdrawal of the notice of defects. If the amendment is signed, the Notice of Defects would be withdrawn and the parties would have
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agreed to certain repairs in the amendment. If the amendment is not signed, the Notice of Defects will be enforced.
Urban Legend # 4: A notice and amendment should be given simultaneously. The Truth: Giving the notice and amendment simultaneously will cause a great deal of confusion. Therefore, the path of least confusion would be to provide the amendment attempting to negotiate the terms, followed by the notice if the seller does not agree to the amendment terms. However, a buyer who is concerned about the time frame of the Inspection Contingency may supply both the amendment and notice at the same time if the buyer includes specific language. For instance, “This Notice of Defects is effective only if the seller does not accept the buyer’s amendment dated ______ on or before ______.”
Urban Legend # 5: A notice should include the defects to be fixed and the name of the company to make the repairs. The Truth: The Inspection Contingency provides that the buyer may give a written notice listing the defects identified in the report to which the buyer objects. It is not appropriate for the buyer to dictate how the seller will cure in a Notice of Defects. The seller’s obligations to cure are outlined on lines 428431 of the offer to purchase. If the buyer wishes to negotiate a certain method for repairing a defect, then an amendment is the appropriate tool.
Urban Legend # 6: The home inspector determines what is or is not a defect. The Truth: The offer to purchase defines “Defect” for the Inspection Contingency. Line 425 states, “For the purposes of this contingency, Defects (see lines 182-184) do not include structural, mechanical or other conditions the nature and extent of which Buyer had actual knowledge or written notice before signing this Offer.” Lines 182-184 defines Defect as “a condition that would have a significant adverse effect on the value of the Property; that would significantly impair the health or safety of future occupants of the Property; or that if not repaired, removed or replaced would significantly shorten or adversely affect the expected normal life of the premises.” Whether any item listed is actually a defect is determined on a case-by-case basis. If the parties cannot agree whether an item is a defect, as defined in the offer, then the parties should be directed to their respective attorneys for advice. Cori Lamont is Director of Brokerage Regulation and Licensing for the WRA.
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best of the legal hotline
with tracy rucka
The New NEW WB-11 Residential Offer to Purchase
After many years of use, the 1999 WB-11 Residential Offer to Purchase was updated in 2010. After months of using the 2010 Offer, it became apparent there were sections of the offer that could be modified to clarify language and enhance its use in real estate transactions. The Forms Advisory Committee was already working to update the WB-14 Residential Condominium Offer to Purchase and the WB-13 Vacant Land Offer to Purchase. That effort, combined with questions, comments and concerns from practitioners and attorneys regarding the 2010 Offer, led to the creation of the new NEW WB-11 Residential Offer to Purchase (2011 Offer). The optionaluse date of March 1, 2011, and the mandatory-use date of July 1, 2011, will apply for each of the three offers.
T
he following Hotline questions and answers reveal practice concerns that arose with the use of 2010 Offer. In each of the answers, the new 2011 Offer language is included to demonstrate how the modified language responds to solve the practice questions. A complete summary of changes to the WB-11 and a draft copy of the 2011 Offer is available in the February 2011 Legal Update at www.wra.org/LU1102.
Follow-up Inspections The broker was working with a buyer who had a Wisconsin-registered home inspector conduct the home inspection. Based on the inspector’s report, the buyer wanted a follow-up inspection of the roof. The buyer had his brother come to look at the roof, but the seller did not feel this was appropriate because the brother would not give an independent report. Was the seller right? The 2010 Offer did not identify who could conduct follow-up
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inspections. The 2011 Offer specifically states that follow-up inspections must be performed by a qualified independent inspector or independent qualified third party. Lines 417-418 provide: “Buyer may have follow-up inspections recommended in a written report resulting from an authorized inspection, provided they occur prior to the deadline specified at line 421. Inspection(s) shall be performed by a qualified independent inspector or independent qualified third party.”
Appraisal Contingency The broker is working with a buyer who is an investor and submitted an offer not subject to financing. The buyer, however, included an Appraisal Contingency. The appraisal was done and the appraised value was less than the purchase price. The buyer submitted a copy of the appraisal to the seller, but wants to check with some other investors before giving any notice to terminate. When is the notice due?
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The Appraisal Contingency in the 2010 Offer did not expressly state when the buyer had to deliver a Notice of Termination. The language on lines 267-269 of the 2011 Offer was improved to state that the notice of termination must accompany the appraisal report, showing the appraised value is less than the purchase price. Once the appraisal is conducted, if the appraised value is not equal to or greater than the purchase price, the buyer and seller may attempt to renegotiate the purchase price. If they do not reach an agreement, the buyer may waive the contingency and proceed to purchase the property, or the buyer may deliver a copy of the appraisal and a Notice of Termination to the seller. An additional modification to the Appraisal Contingency clarifies that the appraisal of the property will be arranged at the buyer’s cost by the buyer or the buyer’s lender.
Delivery of Notices The listing broker was working with a seller who wanted to continue with the transaction, but the buyer wanted to terminate the offer to purchase. When the buyer submitted the Notice of Defects and home inspection report, the buyer used an authorized delivery method, but only delivered one copy to the listing agent, who was not the seller’s recipient for delivery. The seller claimed that because the offer stated the buyer was to deliver one copy of the Notice of Defects and the inspection report to the listing broker and another copy to the seller, that the buyer had failed to give a proper notice of defects by the stated deadline, and therefore had accepted the property in its current condition. Was the seller correct? Most contingency provisions in the 2011 Offer now require the buyer to submit documents and notices to the seller. This language change was made in the Appraisal Contingency (lines 267-269), Inspection and Testing section (lines 406-407), and Inspection Contingency (lines 421-423). Most other instances involving delivery of a written notice or document in the offer require delivery to the other party – to the seller or to the buyer, as the case may be. In the previously mentioned contingencies, the buyer was technically required to deliver copies to both the seller and the listing broker. The changes in the 2011 Offer reflect practice and prevent a buyer from unwittingly failing to deliver the second copy of a notice. If a real estate licensee has been listed as a recipient for delivery in the Delivery of Documents and Written Notices section of the offer, delivery to the named recipient will suffice as delivery to the party. Note, however, that earnest money is delivered to the listing broker, an executed earnest money disbursement agreement is delivered to the listing broker and a title commitment may be delivered to the buyer’s attorney as an alternative to the buyer.
Delivery Reorganized Why does the Delivery section of the 2011 Offer look different? In the 2010 Offer, there was confusion about the use of the delivery provisions. Therefore, the Delivery of Documents and Written Notices section in the 2011 Offer has been reorganized to simplify use of the optional delivery methods. The blank lines to insert recipients for delivery, fax numbers, delivery addresses or e-mail addresses immediately follow the applicable sections. For example, the lines to include the seller’s or buyer’s recipient for delivery immediately follow the Personal Delivery authorization. If a party wants to name a recipient for delivery, the recipient can be included there. wisconsin real estate magazine
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This structural reorganization of this section serves to emphasize the different, separate delivery methods available to the parties and eliminate the perception that the blank lines all pertain to the e-mail item. In addition, the blank lines asking for parties’ delivery information have been given a uniform sequence; the seller’s information is now requested first, followed by the buyer’s information.
Consumer Transactions and E-commerce Many Hotline questions have been raised about the use of e-mail delivery, electronic documents and electronic consent. Does the determination of a consumer transaction depend solely upon the buyer’s use of the property? The requirement for a party to give electronic consent for e-mail delivery applies when a consumer will be using and receiving electronic documents in place of the written documents otherwise required by law. A “consumer” is defined for these purposes as “an individual who obtains, through a transaction, products or services which are used primarily for personal, family, or household purposes, and also means the legal representative of such an individual.” The definition of a “transaction” under E-Sign clearly includes real estate transactions in which there is a “sale, lease, exchange, or other disposition of any interest in real property.” In addition, consumers who are parties to a brokered real estate transaction are receiving services. Thus, electronic consent requirements apply to most transactions in which individuals are buying or selling residential properties because they will be using the property or the proceeds for personal, family or household purposes. The e-mail delivery language in the 2010 Offer explained a consumer transaction as one in which the property being purchased was used primarily for personal, family or household purposes. This included buyers acting as consumers, but neglected to refer to sellers in consumer transactions who use the proceeds of the transaction primarily for personal, family or household purposes. That omission has been corrected in the 2011 Offer language. For further information regarding e-mail delivery and the requirement for electronic consent from consumers, review the February 2008 Legal Update, “Electronic Commerce and E-Mail Delivery,” at www.wra.org/LU0802, and the article entitled “Behind the Curtain” in the June 2010 Wisconsin Real Estate Magazine at www.wra.org/WREM/Jun10/BehindCurtain. Tracy Rucka is Director of Professional Standards and Practices for the WRA.
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Interested in creating your own website? Wisconsin REALTORS® Association members can design and maintain their own websites through Real Estate Home Pages. Software templates and easy-to-use tools for adding images and formatting text provide a professional look usually only attained by graphic artists or Web designers. You’ll be amazed at how easy and inexpensive having a website can be!
Keeping track of all your files across multiple computers can be a hassle. For example, your files may be spread across your laptop, desktop and phone. Want your own personal cloud where you can store all your files? Check out Dropbox.com. Dropbox gives you a single, secure place to consolidate all of your files. Are you tired of e-mailing files to yourself or moving them around with a USB flash drive? Dropbox provides a folder on all of your machines where you can put your files.
The packages and services are designed with real estate agents and brokers in mind, giving you the flexibility to create and edit your entire website without needing to understand HTML or special coding. One featured package is a drip e-mail program called E-Client Contact, which helps you stay in contact with your clients in an automated way. Users also enjoy great marketing features such as automated e-mail campaigns, e-postcards and more. Upload your own lists or use the database from your website. With the help of Real Estate Home Pages, you will be able to:
Dropbox then makes sure these folders are synchronized at all locations, whether you have a PC, MAC or mobile smart phone. When you add a file to a folder in one location, it will show up on all of your machines. The same is true if you save a file to a Dropbox folder – the document gets updated at each location. Your files are even available and continually backed up on the Dropbox website. This means you have access to your files at all times – even while you are on the road or if one of your computers experiences a fatal crash. You can still access your files on the Dropbox website.
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Import, edit and use multiple e-mail lists.
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Create custom marketing campaigns or choose one from an existing library.
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Schedule all of your holiday e-mails in advance.
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Add pictures, text, links, etc.
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Select e-mail header graphics.
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Choose from over 40 different articles and tips for the real estate market from a content library.
Whether you want to store documents, videos or pictures, Dropbox will help you stay organized. Sign up today at Dropbox.com for a free account. You get 2GB of online storage for free, and up to 100GB with a paid subscription. Sharing and accessing files has never been so simple.
•
Add automated opt-out options for your customers.
Visit www.dropbox.com to sign up for a free account.
•
Send hundreds of e-mails with the click of a button.
•
Attend free online seminars to help you learn the ropes of E-Client Contact.
Dropbox even allows you to share files with multiple people so you can collaborate online. You can see other people’s changes instantly and control who has access to the shared files and folders.
Real Estate Home Pages (Quantum Digital) is a WRA-endorsed member benefit. Call 1-800-280-6926, or visit www.realestatehomepages.com for additional website packages.
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april 2011
21
education
CRS 210 - Building an Exceptional Customer Service Referral Business April 18-19, 2011 WRA Headquarters - Madison
Building an Exceptional Customer Service Referral Business is a highly interactive course that has been revised and updated to deliver all the essentials for refocusing the student’s business plan to a customer servicecentered, repeat and referral business. The information provided will help identify the expectations of the “new consumer”, the “new behaviors” necessary to meet those expectations and specific systems to make the agent’s business more productive, more profitable and more enjoyable. Visit: www.wra.org/CRScourses
Sales Pre-License Course - 72 Hours July 18-21; 25-28, 2011
Broker Pre-license May 9-12, 2011 Milwaukee
WRA Headquarters - Madison
This course covers contracts, approved forms, trust accounts, escrow and closing statements, business management and marketing, financial and office management, personnel business ethics, consumer protection, and specialty areas. Visit: www.wra.org/BrokerPLcourses
To obtain a real estate license in the state of Wisconsin, you must first complete 72 hours of approved education courses such as the Wisconsin REALTORS® Association’s sales and licensing course. Second, you must pass a stateadministered exam. The WRA will be offering an eight-day accelerated 72-hour sales program July 18-21 and July 25-28. Brokers can purchase a $50 discount coupon for only $10. Your new recruits can enjoy a $50 discount on the registration fee and be ready to take the exam as soon as they complete the class. Ask them to call 1-800-279-1972 to register today! This program is also available through a self-study video (DVD), self-study online program and recently released On Demand program. Visit: www.wra.org/SalesPLcourses
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. It’s time for 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 in addition to examples of agents leveraging these tools in the field make this course a must for all real estate professionals.
Positioning Properties to Compete in the Market - CRS Elective September 13, 2011 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.
wisconsin real estate magazine
The QuickStart program assists agents in learning the business of real estate. Courses focus on contract issues, agency relationships and negotiating strategies. The program is designed to help agents become confident in their practice as well as focused on their personal business plan. Completion of the QuickStart program (four days) and passing the exams fulfills the requirements for GRI Course 1. Visit: www.wra.org/QuickStartondemand
Real Estate Social Marketing Strategies for Success Both Online and Offline - CRS Elective September 14, 2011
Wisconsin Dells
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QuickStart On Demand
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april 2011
Wisconsin Dells This course will focus on how to: •
Develop a social marketing plan to turn fans and followers into real estate transactions.
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Harness the power of thought leadership.
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Turn social networking into a major profit center through Facebook, YouTube, LinkedIn and Twitter.
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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 Location Early Reg.** $Reg.
ATD
$
* Plus cost of books. ** Early registration applies two weeks prior to the of the course. start Wisconsin CRS members receive a $20 discount. ***
April 18-19, 2011 CRS210 – Referral Course Madison (co-sponsored with the Wisconsin CRS Chapter) Audit fee for those who have already completed CRS210 Date 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
***$150 ***$170
$195 $195
$205 $205
$185
$195
$205
$225
$330
$340
$350
$370
$330
$340
$350
$370
April 27, 2011 September 13-15, 2011
REALTORÂŽ & Government Day WRA Annual Convention
Madison Wisconsin Dells
Real Estate Continuing Education
Date
Course
Location
April 8, 2011 April 14, 2011 April 19, 2011 April 21, 2011 May 4, 2011 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 3 & 4 2011-12 Course 1 & 2 2011-12 Course 2 2011-12 Electives A & B 2011-12 Course 3 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
La Crosse Sturgeon Bay Racine La Crosse Racine Sheboygan Janesville Racine St. Paul, MN St. Paul, MN St. Paul, MN Racine Racine Sheboygan
Pre-License * Plus books Available online!
Date Course Location Member
QuickStart
***$140
$185 $185
Date Event
Broker Pre-License Course Sales Pre-License Course Broker Pre-License Course Sales Pre-License Course Broker Pre-License Course
***$295 ***$315
Thru 8/1 8/22 After 8/22 ATD
Conference and Conventions
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
***$285
$225 $225
Location
Milwaukee Madison Madison Madison Madison
$260* $325* $260* $325* $260*
608-785-7744 920-743-9651 262-554-3940 608-785-7744 262-554-3940 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
Non-Member $280* $325* $280* $325* $280*
sales training program
www.wra.org/QuickStartOnDemand
wisconsin real estate magazine
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april 2011
23
Realtor® sales tip
Follow Through with Follow-up!
Many would argue that the single most important trait of any good salesperson is the ability to follow up with an interested prospect. It is very frustrating for a consumer to try to work with a sales professional only to be dropped once the transaction begins. As one such consumer said, “Once the agent got the listing, they put the sign in our front yard and we never heard back from them ever again.” Unfortunately, this is probably the number-one complaint consumers register against REALTORS®. By marcus a. wally
The ways in which you can communicate with consumers have increased considerably in the past several years, but the fundamentals of lead followup have not. Advancements in technology – including the rise of social networking – have given rise to entirely new ways of generating leads in real estate sales. The evolution of the industry has introduced some new twists and turns to some of the same unresolved lead follow-up challenges we have always faced. This month I’d like to share my wisdom on this subject through three tips.
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wisconsin real estate magazine
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april 2011
www.wra.org/wrem
Tip #1 - Book the appointment. When following up with a lead, my goal is to book an appointment. I am not connecting with the prospect to touch base, make contact, convey information, talk about the market, bond, open up a dialogue, get my name out there or do anything other than schedule a meeting. I always focus on asking for the appointment. Always! The worst thing the prospect can say is “no.” Your office is the best place to hold the meeting. If you must meet in another location, choose a neutral, public site such as a coffee shop or bookstore. Not everyone agrees with me on this point, but I believe I will have more control at my real estate office or a neutral site than I would at a consumer’s home or at the property of interest. A consumer’s home is filled with memories (family photos, children’s growth marks on the wall, etc.), which can interfere with a meeting by making it more challenging for the owners to let go. The office is the best place to conduct business. Consumers who are hesitant to come in can often be persuaded by the fact that the office is where you have all your equipment (computer, printer, copier, etc.). I always encourage new agents to get in the habit of working off a professional calendar right from the start. I want my team to recognize that they are no different from doctors, lawyers, dentists and other professionals who require that we make an appointment for some of their precious time. Would you want to go to a dentist who has no appointments and who can always see you right away? The same must apply for REALTORS® as well. Just the other day, a buyer called out of the blue and asked me to show him a few homes right then. Not only did I have a long to-do list that day, but I also did not feel comfortable running out the door to help him without sufficient preparation. When I told this prospective client that I was unable to help him that day, he was not very happy. I explained that most professionals are not just sitting around waiting for the phone to ring, and if he wanted to work with a top-notch professional, he would have to work within my schedule.
Let me be clear: I’m not talking about discarding past clients or those in their sphere of influence. I am talking about individuals who have visited your website, attended an open house, or called once in response to an ad or a sign. Perhaps you have spent a great deal of time trying to convert them into a client via e-mail, phone, direct mail or some other method. At some point, we -need to let them go.
You can also use a variety of communication
Keep in mind that in lead follow-up, a “no” is as good as a “yes.” We are looking for the “no.” Once we confirm that the consumer is not interested in our services, we can invest our time, resources and energy elsewhere. The real estate business is all about being selective. It’s okay to say “no.” You are not required to work with everyone who comes into your life!
explained that I was very interested in helping him. I
Think of our business like eating at a buffet: if you fill up your plate at the beginning of the line, you will have no room for dessert at the end! If you say “yes” to everyone, you will have no room left to accept a hot lead that comes along. Saying “no” allows you to say “yes” to someone else.
companies, carpenters, insurance agents, etc., to
Tip #3 - Try several methods of contact before deleting a lead.
part in tune.
Today we have more methods of communication than ever before. Just 20 years ago, there really were only two methods of contact: direct mail and landline telephone. Now you can add cell phone calls, text messaging, e-mail, social networking and more to the mix.
only does this skill increase your professionalism,
I still prefer phone communication, but if I can’t reach someone by phone, I need to be able to use another method effectively. Attempt at least one other means of communication before you toss a lead out as unreachable. The person might just be difficult to reach by the method you primarily use. Adaptability is critical in today’s marketplace.
business. For example, I just followed up with the caller I mentioned previously who asked me to drop everything to show him some properties. Since I believed he was a good lead, I decided to send a short e-mail to “pinch” him. I apologized that I was unable to run out the door when he called, and also included brief details about some properties I had found as well as information about an interest-free loan program in the hopes of sparking his interest. I think “pinching” is one of my most important qualities. I am constantly “pinching” home inspectors, mortgage professionals, surveyors, title ensure my transactions stay on track and close on time. I do the same with buyers and sellers, encouraging them to move forward and complete the process. REALTORS® are like orchestra conductors – making sure everyone is playing their
Constant follow-up is the name of the game. Not but it enhances your reputation and increases your bottom line. Go “pinch” someone for your business today! Marcus A. Wally, MBA, is an active Florida REALTOR® in St. Augustine, Florida. Marcus is the founder and broker of New World Realty, which also manages coaching and facilitation of education classes around the world. Marcus earned his MBA from the University of North Florida in Jacksonville. He can be reached at (904) 669-1081 or by e-mail at marcuswally@comcast.net.
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Tip #2 - Disqualify leads that aren’t going anywhere. The secondary purpose of lead follow-up is to disqualify and discard those leads that are going nowhere so you can stop wasting your precious time. Remember, time is your most valuable asset. wisconsin real estate magazine
methods to “pinch” those with whom you do
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legislative
Political Chaos in Wisconsin
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removed from office through recall in American history, including two from Wisconsin (George Petak (R) and Gary George (D)). To have 16 incumbent state senators – nearly 50 percent of the body – all facing the possibility of recall is unheard of. “I don’t think there’s a precedent for what’s going on in Wisconsin,” said election expert Gary Moncrief of Boise State University. The organizational capabilities of both political parties will be seriously tested as several lawmakers are forced to run again before the expiration of their term.
isconsin’s political landscape for 2011 has descended into an extended form of political and legislative chaos.
Governor Scott Walker’s proposed state budget calling for deep spending cuts, along with his successful push to roll back public employee collective bargaining powers, has sparked a political upheaval that will likely force multiple state senators from both parties to face recall elections this summer. Formal recall campaigns have been launched against eight Democrats and eight Republicans. But insiders do not expect that all 16 legislators will be forced to an election campaign. The number of signatures required to trigger a recall, in any given legislative district, is one-quarter of the number of votes cast for governor in the most recent gubernatorial election (2010), and it is unlikely that organizers will succeed in qualifying all 16 senators for an actual recall election. In districts where organizers fail to gather the required signatures, no recall election will be held.
•
Wisconsin is not the only state government seeking changes to public employee collective bargaining law, but national and state labor organizations have decided that Wisconsin is “ground zero” in the national fight to preserve public employee collective bargaining rights, as well as the ability of unions to exercise their considerable political muscle in national and state elections. In addition to collective bargaining restrictions, mandatory union dues for public employees (“Fair Share”) are now voluntary. This will sharply reduce a union’s ability to organize and spend on election campaigns, which is especially crucial to them in a highly competitive state like Wisconsin. As a result, the summer recall elections will draw vast sums of money on both sides as these races play out on the national stage. The winning side will be an inspiration to others.
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Governor Walker’s job approval numbers have slipped since his election last November. Public Policy Polling, a Democratic leaning firm, had Walker’s approval rating at 46%. Polling from Rasmussen Reports, considered by some to lean more Republican, had the Governor’s approval rating at 43%. Both surveys were released in early March as the battle over collective bargaining was dominating the headlines here is Wisconsin and nationally. Republican senators facing recall elections this summer could be effected by the Governor’s overall approval ratings. If voters percieve Wisconsin heading in the wrong direction this July and August, it could make the GOPs chances of survival more difficult.
•
Legislative Democrats and unions have one primary goal: flip control of the Wisconsin Senate from Republicans to Democrats. Currently Republicans control the state Senate 19-14, so Democrats need a net gain of three seats in the recall elections to regain the chamber. If Democrats succeed, Walker would be forced to negotiate everything he proposes. This would represent a huge loss in the governor’s power. He currently enjoys large GOP majorities in both chambers and this allows him to get most of what he wants. If the Senate slips away, the state’s political landscape will change dramatically.
The 16 senators eligible for possible recall and the number of signatures required to force an election are listed below: Senate District
Officeholder
Signatures Required
Recall Commitee Registration Date
2
Robert Cowles (R) Green Bay
15,960
3/2/2011
4
Lena Taylor (D) Milwaukee
13,498
3/23/2011
6
Spencer Coggs (D) Milwaukee
11,817
2/25/2011
8
Alberta Darling (R) River Hills
20,343
3/2/2011
10
Sheila Harsdorf (R) River Falls
15,744
3/2/2011
12
Jim Holperin (D) Conover
15,960
2/22/2011
14
Luther Olsen (R) Ripon
14,733
3/2/2011
16
Mark Miller (D) Monona
20,352
2/25/2011
18
Randy Hopper (R) Fond du Lac
15,269
3/2/2011
20
Glenn Grothman (R) West Bend
20,061
3/2/2011
22
Robert Wirch (D) Pleasant Prairie
13,537
2/24/2011
24
Julie Lassa (D) Stevens Point
15,879
3/23/2011
26
Fred Risser (D) Madison
19,805
2/23/2011
28
Mary Lazich (R) New Berlin
20,973
3/2/2011
30
Dave Hansen (D) Green Bay
13,852
2/25/2011
32
Dan Kapanke (R) LaCrosse
15,588
3/2/2011
As voters in all 16 state Senate districts wait to see if their senator will face a recall election, there are several election dynamics to watch as the political drama of 2011 continues to unfold: •
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The sheer number of potential recall elections is unprecedented in Wisconsin, or any other state for that matter. Data collected by leading scholars and cataloged by the National Conference of State Legislatures shows that only 13 state lawmakers have been wisconsin real estate magazine
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april 2011
By joe murray
The political chaos that played out in Madison in February and March is now moving into the streets of Senate districts across Wisconsin. If the battles there are anything like the battles at the Capitol, we’re in for another full-fledged, emotion-filled election year in 2011! Joe Murray is Director of Political and Governmental Affairs for the WRA. www.wra.org/wrem
Difficult Budget for Difficult Times
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By Michael theo
DSPS, and transfers the authority to grant and issue licenses, approve forms, and create postand pre-license education requirements from the department secretary to the new board. This new structure is similar to that of 18 of the 23 professions currently regulated by the department.
overnor Walker has submitted his biennial budget bill to the Legislature, which will now begin a long process of public hearings, amendments and eventual passage through both legislative houses. The process should end no later than July 1, marking the beginning of the new biennium. The governor’s 1,300-page plan delivers on his promise to balance the state budget and reduce the structural deficit without tax or fee increases, without reliance on federal stimulus funds and without transferring segregated funds to the general fund. The administration asserts the governor’s plan not only balances the budget in the 2011-2013 biennium, but also nearly eliminates the state’s chronic structural deficit.
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Repeals the recently enacted conversion fee placed on the rezoning of farmland currently zoned for exclusive agriculture and eliminates the permanent conservation easement program funded by those fees.
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Provides a long-term capital gains tax exemption for reinvesting in a Wisconsin business for at least five years.
However, this budget will be extremely controversial as the spending cuts to achieve these budget benefits will be significant, particularly for schools and local units of government.
The governor’s biennial budget bill will be controversial because it involves significant cuts to current appropriations, not just cuts to agency requests. The severity of spending cuts necessary to balance the budget without tax increases or fund transfers will result in heated debates at the state and local levels regarding how to implement the cuts. Moreover, the proposed caps on property tax levies will force local debates to focus on difficult subjects like layoffs, larger class sizes, cuts to extracurricular activities, reduction in services and pressure to increase local fees, to name a few.
While additional details will be identified and a slew of awards will be offered during the upcoming public hearings, here are several highlights of particular interest to REALTORS®: •
Imposes no tax or fee increases.
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Requires no fund transfers.
•
Creates no reliance on federal stimulus revenues.
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Requires significant cuts to school aids and aids to municipalities and counties, totaling approximately $1 billion.
•
Places a strict cap on property taxes so cuts in state aids to schools and local units of government do not result in higher property taxes. (Caps will allow for capturing the value of new real estate construction and can be exceeded only by voters through a referendum.)
Wisconsin is not alone in facing substantial spending reductions as most states nationwide face similar significant budget deficits. Unlike the federal government, state governments, including Wisconsin, must adopt balanced budgets. Thus the alternative to these spending cuts is tax increases, which will surely be debated here and around the country.
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Creates a new Department of Safety and Professional Services by merging the building and safety regulations from the old Department of Commerce with the current Department of Regulation and Licensing.
A vibrant housing and real estate market requires protecting Wisconsin’s unique quality of life. Achieving this requires a growing economy and a balanced budget – a budget that balances first-rate schools and municipal services with reasonable taxes and fees. The WRA will work with the governor and both political parties in the Legislature to achieve this balance in these difficult times.
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Replaces the existing Real Estate Board with a new Real Estate Examining Board in the new
Michael Theo is Senior Vice President of Legal and Public Affairs for the WRA.
wisconsin real estate magazine
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april 2011
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legislative
Lawmakers Consider Changes to Wisconsin’s Wetland Mitigation Program
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words, a property owner cannot use mitigation unless the property owner can show that there are no other “practicable alternatives” that would avoid or minimize to a lesser degree the impact on the wetland. Many other states (e.g., Iowa) allow property owners to more quickly jump to the mitigation process.
he Wisconsin Legislature is currently considering changes to various state regulations that negatively impact economic development. One such regulation is the wetland mitigation program, which critics claim is underutilized and in need of modifications.
Background Most people think of wetlands as areas such as marshes or bogs with easily identifiable characteristics like standing water and certain aquatic vegetation such as reed canary grass or cattails. However, Wisconsin’s definition of “wetland” is much broader and includes “areas where water is at, near, or above the land surface long enough to be capable of supporting aquatic or hydrophytic (water-loving) vegetation and which has soils indicative of wet conditions.” In other words, a wetland can include small depressions on land with no standing water, or areas that have certain soil types but no other physical characteristics that would identify the land as a wetland to the average person.
•
The scope of the “practicable alternatives” analysis is too broad. As indicated above, property owners must be able to demonstrate that there is no other “practicable alternative” prior to being able to qualify for mitigation. When determining whether a practicable alternative exists, the DNR currently can consider whether the proposed project needs to be built (i.e., doing nothing can be a “practicable alternative”) or whether the proposed project could be built on some other property in another location (even if the property is not owned by the same property owner).
•
The net environmental impact of a project is not considered. Under current practice, filling a wetland by definition results in a “significant adverse impact” and therefore the DNR can (and often does) deny a permit without considering the impact on the wetland or the entire wetland “complex” after the mitigation is performed. In many cases, wetland mitigation can enhance a wetland by improving the functional qualities (e.g., water retention, wildlife habitat) or restoring previous damage. Therefore, because the DNR fails to consider the net environmental impact (both positive and negative) of a project after mitigation is performed, property owners are generally unable to utilize wetland mitigation.
•
Inadequate differentiation between size and quality of wetlands. The current wetlands permitting process does not adequately differentiate between wetlands based upon size, function or manmade vs. natural qualities. Therefore, a permit for an activity that would impact a small, low-quality wetland is treated the same as a permit for an activity that would impact a larger, high-quality wetland.
Because wetlands are often not easily identifiable, many property owners are unaware of wetlands on their property until after they purchase the property and attempt to build on or develop it. Wetlands are often located in the exact location that the property owner wants to build something or in the only place the property can be developed. Property owners who discover a wetland on their property generally must avoid any activity that could harm the wetland or apply for a permit from the Department of Natural Resources, which is often difficult to obtain. To address situations in which damaging a wetland is difficult or impossible to avoid, Wisconsin developed a wetland mitigation program to allow new wetlands to be restored, enhanced or created to compensate for the filling in of other wetlands. To meet wetland mitigation requirements, property owners may choose to perform a mitigation activity themselves or purchase a “credit” from a wetland mitigation bank. If a “credit” is purchased, the mitigation activity will be performed by another party at a designated wetland area.
Problems with Wisconsin’s Wetland Mitigation Program
Looking for Solutions
While wetland mitigation sounds like an effective solution that allows for both property development and environmental protection, Wisconsin’s program has not been widely utilized. Critics claim that mitigation is not an option for most property owners because the program consists of several fundamental flaws in the way that it was created, such as:
The Wisconsin REALTORS® Association is meeting with DNR officials, legislators, environmental groups and other interested parties to find ways to improve Wisconsin’s wetland mitigation program. Our goal is to identify solutions that will make wetland mitigation a more effective tool for property owners without compromising the important role that wetlands play in our environment.
•
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By tom Larson
Mitigation is allowed only as a last resort. Under Wisconsin’s wetland regulatory framework, a property owner who intends to build on or fill a portion of a wetland can utilize mitigation only if the property owner can first demonstrate that (a) damage to the wetland cannot be avoided, and (b) that every effort had been made to minimize the project’s impact on the wetland. In other wisconsin real estate magazine
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april 2011
For more information about wetland mitigation, please contact Tom Larson (tlarson@wra.org) at 608-212-0066. Tom Larson is Chief Lobbyist and Director of Legal and Public Affairs for the WRA. www.wra.org/wrem
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