Category: real estate

A Simple Mistake That Gets Offers Rejected

Smart home buyers are modifying their Offers, promising the seller that they will accept the first ($2,000.00, $3000.00, $5,000.00) in repairs of conditions identified in the home inspection. This safety net inspection contingency gives the seller the security that comes with believing the buyer will not renegotiate over minor issues. Difference makers like this one are often the reason a home seller selects one Offer over others. 

Safety Net Inspection Contingency—Very Smart

A batch of offers on several properties caught my attention this summer. They all had a similar version of the same contradicting, Offer-killing contingencies. The safety net inspection contingency became diluted by a risk-to-the-seller condition of a radon test. Each of the Offers with these contradicting contingencies suffered the same fate of REJECTION. I think this is an avoidable error made when agents or lawyers draft offers and include the radon testing contingency for the wrong reason—protecting the buyer from radon gas. I’ll explain it.

Radon Test $200. Mitigation $600 – $1,200

First, a radon testing contingency will not protect anyone from radon. The contingency only allows the seller to install a mitigation system before closing and give the buyer a retest, showing that the radon level is below an agreed-upon rate. The least expensive EPA approved mitigation method is about $600. I’m sure there are some oddball examples, but ask any mitigation specialist to show you what they’ve charged in the last three years, and you will see $1,100 -$1,200 is typical. The chance is excellent; you can reduce radon in a home to a level below the EPA action level, with a system that is not detrimental to the house’s look for $1,000 +/-.  

Be logical to avoid defeat

A radon test is paid for by the buyer at the cost of $200.00. The buyer who is willing to cover the first $2,000 of the inspection identified defects can save the $200 test cost and install a $1,200 aesthetically pleasing, effective system. It’s illogical and self-defeating to say the seller we will cover the cost of fixing things that cost $2,000, but we will make them cure a condition that will cost only $600 to $1,200. 

Torpedoed By Radon Testing

When comparing Offers, it’s easy to eliminate some because they’re poorly written, have flaws, or are high risk for the seller. In the end, there are usually two or three Offers to decide between. With all else relatively equal, the radon testing contingency torpedoes otherwise acceptable Offers. 

When drafting Offers, it’s wise for the agent or lawyer or buyer to review before signing and ask two questions, WHY IS THIS CONTINGENCY INCLUDED? And DOES THIS CONTINGENCY CANCEL OFFSET ANOTHER CONTINGENCY?

Avoid Training. Pursue Learning

Learning is not training. Contract flaws like this illogical combination of conditions repeatedly happen because training doesn’t require a person to make an effort to learn (in this case, radon is deadly, everywhere, and mitigated inexpensively) the issues, and understand the implications of contingencies. Training tells you what to do. Learning is when you know why you’re doing it.

We often say we can write a safe offer to wrap a buyer in bubble wrap contingencies so that the seller won’t accept the Offer. When a person isn’t committed to owning a property, bubble wrap contingencies will help keep them out of danger of owning. But when a person commits to own, it’s up to us to give them reasonable ideas to make their Offer acceptable. I hope never to see a person lose a home they want to own because an unnecessary contingency makes its way into an Offer.

Service Fees Adjust to Competition. $499 plus 1.0% is our competitive fee.

Costs to be in business, prices set by competitors, and subjectivity are three factors a writer at Business.com suggests when establishing a service fee. According to this New York Times article of May 1984 said the real estate industry lacked “…vigorous price competition among brokers…” According to the writer, the consequences were that the consumer paid a higher price than necessary because they were unaware that there are alternative(s), or discount, brokers who charge less than the standard industry commission of 6 or 7 percent. 

That was then. What about now?

According to a spokesperson for the National Association of Realtors quoted in the article, commission rates arrived at equilibrium due to a very competitive market. Rates were consistently 6-7% in 1984. If that competitive market was the reason, then what’s the reason now? I don’t contend that the real estate commission rate is immune to market changes because of cooperation among brokers. I believe the quoted rate you are most likely to hear from brokers is still six percent of the sale price. The outcome may be similar if firms set their costs before calculating revenue, and project revenue based on a need to cover expenses. By comparing their desired fee to the fees other firms charge, a going rate gets set. Equilibrium is a choice. 

Another Approach Puts the Consumer First 

At Essential Real Estate, we took another approach to price our service and arrived at an alternative rate for Madison, WI area home sellers.

First, we identified why people sell their homes and where the money comes from to pay broker fees. They sell to free the home equity to use for their next life plan. The equity they desire to use gets reduced by the amount of money paid to the broker. To be a service worth offering, we set out to create an alternative that doesn’t deplete home equity at such an aggressive rate.

Second, we built our company to operate on a budget that leaves room for profit. Real estate businesses can load their debit column with the costs of a host of legitimate but not essential expenses. For example, if a broker wants her company to pay for vacations, cars, gifts, personal promotion, charitable contributions, a soiree or three, and still desire a profit to satisfy a lifestyle, more transactions or more money per transaction will be a crucial factor. 

Third, we excel in the essential real estate services. Our fee is only for those services. Real estate agency law sets out the purpose and expectations of a broker. None of those license law requirements have anything to do with spending money on social media, personal promotion, lead generation, brand management, or attendance at motivational seminars in vacation destinations. When a client isn’t paying inflated operation costs, they keep more of their hard-earned equity. 

Pricing Is A Choice

A lot of money changes hands in a real estate sale. The amount of money that goes from clients to brokers is a choice. By choosing to leave more money in our home selling clients’ hands, we created a complete real estate service option for people in the Madison, WI area. Our fee is $499 at the time of signing the contract plus 1.0% of the purchase price at closing. We give our clients insight into how the cooperating broker compensation process works, and our clients make informed decisions to pay the buyer agent a fee of their choice. The typical broker fee might be quoted at 6.0% of the sale price in Any City, USA. Essential Real Estate clients are paying, on average less than 3.5% total commission. 

We exist to provide skilled real estate representation with our eye on your security and a goal to leave more of your home equity with you. Our fee isn’t the lowest. We don’t intend to be inexpensive. We are exceptional where it counts, and we charge only for what matters. 

We need a short form WB-11 Offer to help WI Homebuyers

Twenty people in Madison, WI submitted WB-11 Residential Offers To Purchase on the same home. The homeowner recognizes one of these Offers is not like the rest. The first noticeable difference is physical; it’s much thinner. People committed to keeping a promise require far fewer exit doors and opportunities to change terms later. In competition, less is more. 

Common and Counter-Productive

Nine out of ten agents load their client’s Offer with their company’s Addenda of good ideas and extra-safe precaution contingencies. Addenda can swell the simple ten-page Offer to double or triple the size. The favorable elements of a person’s intentions get hidden in the jungle of contingencies. With more emphasis on learning the content of the WB-11 and company addenda, the licensee could help their buyer clients improve the appeal of their Offer without depending on merely paying more money. Until brokerage firms demand and expect greater comprehension of contracts and far better dialogue of options with the client, Wisconsin home buyers will acquire homes by overpaying and lose homes in a competition by diluting their Offers with unnecessary junk contingencies. We know agents can do much better. First, they have to want to.

Wisconsin Home Buyers and Sellers Need an Alternative Offer

The Wisconsin real estate documents are products of years of evolution of fears. Stick around any industry long enough to see unusual, unexpected, unlikely events occur. When those events happen enough times (like once), someone will suggest a precautionary fix be inserted into the contract to protect 100% of the transactions. It doesn’t matter if the incident is highly unlikely and improbable unless conditions a, b, c, and 1, 2, 3 occur. If the person who offers the solution to the problem that doesn’t exist has the respect of the forms committee leadership, the answer could make its way into the Offer. Enough time and enough ideas allow a one page Offer to Purchase to grow to ten to thirty pages. And when the person filling in blanks and checking boxes only knows which blanks to fill in and which boxes to check, the least risk-sensitive, most qualified, committed person’s Offer will come out looking just as reserved and non-committal as the least capable buyer. For the undereducated licensee’s client, there could be an alternative simplified Offer. 

Remove Optional Contingencies

The Offer most appealing to the home seller looks like this:  I, Tom Meyer, Offer to purchase your real estate at ____________address for $___________this amount of money. I will give you the payment in full on __________this date provided you give me the deed to the property and a clear title. 

Beyond these two sentences, there could be a few paragraphs of understanding as necessary by Wisconsin Disclosure law. By eliminating pre-written contingencies that are intended to be optional but become standard because the contract drafters defer to including every condition without learning the consequences and explaining those consequences to the consumer, some home buyers will benefit. A clean and simple Offer doesn’t include extra safety conditions for the buyer client. That’s not a problem if the safety the condition provides is inconsequential to that buyer. In these scenarios, safety becomes a detriment.  

Give the Buyer an Optional WB-11

One advantage of having an Offer prepared by an attorney is the attorney is not obligated to use the WB-11 form. A lawyer could craft a simple Offer that gives the buyer only the protection they need and appeals to the owner’s interest in simplicity. Real Estate Licensees are not permitted to create their Offers, and the extent to which we can modify prewritten documents is limited. The WRA and the State could collaborate on a simple Offer document. Eliminating optional contingencies and striking redundant sentences will allow home buyers to make their Offer stand out without relying on overpaying. Home sellers will benefit by being free of problematic junk contingencies. We can’t protect everyone from everything, but we can give people a choice to represent themselves as the ready, willing and committed person they are. 

A Wise Pricing Strategy. Your Choice.

With a lifetime of home value pricing conversations behind me, I can say homeowners are likely to expect one of two outcomes. One is to feel good about the price, and the other desires to have a strategy that gets them from here to there safely. The majority of people we talk with hope to be part of the conversation and are receptive to relevant facts. Most home sellers are sincere about their intentions, and they’re eager to choose a wise pricing strategy. These are the people who have real opportunities to make this seller’s market work for them. 

Gathering Facts

Home sellers who win know they are selling because they want the equity from their current home to do the next thing in their lives. Until a person is committed to the next thing, testing the market will be tempting. It’s a lot easier to trust facts when those facts appear to contribute to a plan to accomplish the objective. When the aim is not defined, testing is a way to stall and buy time. We set out to gather relevant facts and separate them from the irrelevant. The process looks like this: Four homes sold in the neighborhood in the last six months. Two are on the same street. They are all similar in age, size, amenities to the subject home. The prices range from $320,000 to $350,000. A few blocks over, the road leads to a new subdivision. One person sold a drastically different, yet relatively close-in-size home for $625,000. Even if the homeowner likes their home and location better, the six hundred thousand dollar home sale is irrelevant to the subject home’s value. The homeowner who wants to use the expensive house to calculate relative value will hamper the opportunity to negotiate price and terms.  

What Someone Thinks or Wants are Facts…but not relevant.

We all want something sometime. We all think some things are better than others. No one wants to leave money on the table. Those are facts. They are not relevant to determining a wise pricing strategy, except that they are facts to disregard. We might as well acknowledge these facts, and then agree to set them aside. Keeping them in the conversation keeps us from our goal of creating a strategy that accomplishes your intentions. 

Opinions. Everyone’s got one. 

Neighbors are great at hindering your sale. Tell your neighbor your REALTOR recommended a specific price for your home and watch what happens. They’re going to tell you the price is low. “For your house? No way. Your house is worth a lot more than that!” I’m confident of this too: Talk to three REALTORS. Tell them the price another agent suggested, and might get a similar response from one or two. The same way the neighbor wants to avoid offending you, the agent hopes they can impress you by enticing you with the opportunity for more money. Now, the REALTOR might be more likely than the neighbor to have relevant facts to arrive at their opinion. Ask to see those facts. 

Agree on the facts. Put them on the table. Decide what matches your objective.

After stating my opinion and showing the facts I used, restating the objective of the seller as I understand it, sometimes owners want to see if an opinion or irrelevant fact will change my opinion to better align with their hope. My answer is always the same. If this is still your objective, the facts I presented are still the relevant facts, then my opinion can’t change. It’s not my place to be agreeable or disagreeable. The question I set out to answer doesn’t change with more information unless the information corrects what I thought was a fact. I’m not concerned with offending you. I’m concerned with presenting you with a strategy based on facts to accomplish your intention. If a person is offended, it’s because their intention has not been stated.

Net Equity, Not The Purchase Price, Is The Prize.

We think of the residential real estate sale as a price transaction when, in fact, it’s a trade of NET EQUITY. Price and expenses are factors in the formula to calculate a home seller’s home equity. PRICE – EXPENSES = EQUITY. By keeping eyes on equity, real estate agents have many more options to craft Offers sellers are likely to accept. 

 Selling our homes is how we release our home equity to do the next thing. By focusing on NET EQUITY, not price, we avoid the consequences of agreeing to expenses that deplete our equity and terms that leave negotiations open. By structuring our Offers to reduce the owner’s costs to sell, we increase their NET EQUITY and improve our chances of getting our offer accepted. The price is only a participation trophy. The actual money and the security of a sure thing is the real prize. 

Price is misleading

Homebuyers who only know how to improve an offer by increasing the price will pay a premium in negotiations. The buyers who provide the seller with secure terms and a reasonable price receive accepted offers and probably retain some unspent equity by not overpaying. To pay a reasonable price without being the highest price offer on the table, increase the Seller’s Net Equity after the sale by decreasing the Seller’s costs to sell.

The Secret Is Knowing Where The Money Is In The Purchase Agreement

You’ll find those opportunities to improve your offer without increasing the price throughout the Offer. There are at least two places on the first page of the WB Purchase Agreement, and at least six more throughout the 10-page offer.

At Essential Real Estate, we know how to make the Offer work for our buyer clients, when the goal is to be the most attractive buyer. The same strategy works to give our seller clients every opportunity to eliminate risk and increase the amount of the equity check they’ll receive at closing.

REALTORS Who Respect Zillow Earn Public Trust

REALTORS, please stop resisting Zillow. They have the trust of the public. Zillow has the power they have because they figured out how to involve the consumer at the REALTOR expense.  Embrace Zillow the way the public does.

Embrace The Zestimate—It’s Your Opening

Given this choice as a customer, who are you more likely to trust and engage in a conversation: (1) The person who tells you you’re wrong, you’re making a mistake, and you’re in danger. (2) The person who compliments you in being proactive, smart, informed, and wise. Number 2 of course. When people recognize our intelligence and wisdom, our opinion of them goes up. Still, when allowed to engage in a real estate conversation when Zillow is the topic, agents tend to go straight to the party line with flawed criticism. Opportunity Lost! 

The wise REALTORs know everything Zillow wants them to know about Zestimates. And they want you to know: Zillow knows the Zestimate is not as accurate as you can be.  Here it is in their own words:  It is not an appraisal and it should be used as a starting point. We encourage buyers, sellers and homeowners to supplement the Zestimate with other research such as visiting the home, getting a professional appraisal of the home, or requesting a comparative market analysis (CMA) from a real estate agent.

https://www.zillow.com/zestimate/ This link takes you to Zillow’s stats for Zestimate accuracy by State. In Wisconsin, Zillow tells us up front, they are accurate within 5% of the sales price 82% of the time. Do you know what they call REALTORS who estimate a home’s value within 5% accuracy 82% of the time? Ex REALTORS. For those who point out Zillow reports that they are within 20% of the correct price, 99% of the time, consider what that means. Zillow will be wrong in every opinion. And the error could be up to 20% of the value. (A $400,000 home with a 20% error is off by $80,000.) 

Consumers Like Opinions that support theirs

Some consumers will look at an explanation of analytics after they see or hear an opinion. But that takes work. A typical consumer looks at their Zestimate and their City Assessment and decides if the number is right or wrong based on how they want the number to factor into a formula. Show me one homeowner who’s Zestimate is higher than their assessment to go into the City and demand their property tax bill to be increased. Should that Zestimate be lower than the assessment, I’m sure the assessor will soon be seeing the Zestimate as evidence. 

Never Right or Wrong…Just a Start

The Zestimate and the consumer are never necessarily right or wrong. The number is a product of analytics but the analytics still require your input. The consumer who begins with Zillow is smart. Being informed is always better than being at the mercy of someone who has an opinion. 

Attempting to undermine Zillow is futile. REALTORS who try only undermine their credibility and that of other real estate professionals. Those REALTORS who learn how Zillow works, why Zillow works, and align themselves on the public’s side with respect to Zillow will be the REALTOR of choice for people who like to be respected. It’s far easier to work with people who respect you, trust you, appreciate you for not criticizing them.   

The Home You Will Buy Will Have Radon.

Between five and ten percent of Wisconsin homes have radon levels above the US EPA guideline of 4 pCi/L for an annual average on the main floor. Every region of Wisconsin has some homes with elevated radon levels. radon testing central Racine County

Testing and scientific research are complete; the results are indisputable; radon gas is deadly and everywhere. The house you will buy will have a level of radon gas. The Environmental Protection Agency has not set a SAFE standard for gas we breathe. However, the EPA does advise we test our homes over an extended period (three months and longer) to determine a more accurate reading of our exposure. The residential real estate transaction process is not well suited for long term testing of anything. A short term radon test done in 48 hours is an alternative the Wisconsin Residential Offer to Purchase provides to the consumer. It’s not the false sense of danger that short-term testing results are likely to trigger that concerns me; it’s the false sense of security homeowners walk away with when the test shows a radon level below the EPA’s action level 4 picocuries per liter. 

Don’t Test For Radon. Budget to Mitigate.

Consider these facts and tell me what you gain by making your offer contingent on another radon test’s findings: radon is deadly.  The price of a radon test is $200.00. A mitigation system guaranteed to keep radon below the EPA Action Level is $800 – $1,000. Multimillion dollars spent on scientific testing proves radon gas is present where you live. 

Would it be smart to forego the test, save the $200, and apply the money to the price of a customized mitigation system for your home? I think it is. I also think it is unwise to decide you don’t need to mitigate based on a two-day test. The two-day test will not refute the facts determined by the expensive long-term testing and scientific research completed and ongoing across the world. 

The Contingency is All About Determining Who Pays The Bill

The purpose of the radon testing contingency, as written in the Wisconsin Offer to Purchase, is to decide who pays for installing a mitigation system if the two-day test reveals a radon level at or above the EPA Action Level. In a climate where buyers are promising they won’t object to defects that cost less than $1,000 to $2,000 to cure, it makes no sense to put the seller at risk of needing to contract and pay for a cheap mitigation system. Accepting the cost of adding a system of any kind that is not currently on the premises is smart negotiating. When the cost is minor and affordable, making the issue a concern for the Seller your Offer’s appeal takes a hit. Spending money to test to confirm what is already known is unnecessary.   Leave the unnecessary out. Protect your family. Plan to install a radon mitigation system after closing. That little change to your offer might be all that’s necessary to make you the most attractive buyer of all the buyers the seller has to choose from. Be safe. Be smart.

Four Elements Give The Full Advantage of a Seller’s Market To Our Seller Clients.

When combined, there are four elements in our control, giving our clients more advantages in this seller-favorable market. As far as I know, Essential Real Estate, LLC, is the only firm designed to use the resources of real estate agency rules and liberties to allow homeowners the full advantages of this Seller-Favorable-Market. 

There is a formula we believe to be effective in satisfying our seller clients well beyond the good feeling of a quick sale. The four factors of our method are (1) Net Equity. (2) Smart Pricing – Fair Fees. (3) Safe Terms. (4) Confidentiality. 

Net Equity

What would you rather have, the price that you think your home is worth, or more equity after paying fees and costs? It’s the equity you want. We achieve the equity goal by controlling price and expenses. 

Smart Pricing – Fair Fees

The right price for any property is open for debate. There is always someone who will offer more money. Whether or not that person can meet you at closing with the money in hand is essential. High prices and weak commitments are easy to spot when you’ve seen it all before and ask the right questions. Our home valuation process will show you if the price is likely to be verified by an appraisal or if we need to take precautions to avoid renegotiations later in the process. 

Fair Fees When time on the market is measured in hours, not days, and multiple offers are most likely regardless of who represents you; the real value is in the skill of the person representing you. We charge $499 plus 1.0% of the purchase price and our emphasis is negotiating the transaction. You don’t pay us to “market” your property. Homebuyers find homes listed on the MLS on the internet, Zillow.com, Realtor.com, etc.com. There is no real cost to be seen where people are looking for homes.  

Buyer Broker Compensation I looked at 53 recent sales. Fifty-two of the owners paid a brokerage fee of 3.0% of the sale price to the buyer’s agent. Owners of high demand homes can choose to negotiate the buyer broker fee that they will pay when they see the Offer. An offer with favorable prices and terms might we worth 3.0% to the seller if there are no better options. But in this market, we see buyer agents are happy to accept less than 3.0% to help their client get the accepted Offer in competition. Why our clients pay an average of 3.4% in total broker fees is your business. Ask us about our WHY.

Safe Terms

Contingencies exist to protect the buyer more often than the seller. In simple terms they say, Maybe I will buy your house. Maybe I won’t. When I know this or that, I’ll let you know.  Any contingency that puts the buyer in a position to renegotiate or walk away is dangerous for home sellers–and all contingencies give someone leverage. There is a provision written for everything that could arise regardless of how inconsequential it may be to the parties. Offers loaded with contingencies get that way because the buyer wants escape alleys, or because the agent who drafted the Offer didn’t give the buyer an informed choice.  

Confidentiality

Real estate disputes have a common element. Somewhere along the way, one licensee said something to another licensee, and that something was flawed or restated incorrectly. When agents take it upon themselves to work out details without the principals signing off, someone is likely to be disadvantaged. We don’t speak for our clients, and we don’t pass along requests. All communication in a transaction should be between the buyer and seller, and the proper communication methods are Amendments and Notices. Conversations between our clients and us are confidential, the same as conversations with real estate customers. 

Conclusion

A favorable seller market has a lot more opportunities for home sellers to profit and be safe. The Offer documents designed to balance the playing field or tip the buyer’s advantage can be crafted to be more advantageous to the seller when the agent knows what we know.

The diminishing value of real estate advertising.

In 1989 a prospective homeowner started their home search by scanning their local newspaper’s real estate section. A large real estate firm with multiple hundreds of listings presented maybe 20% of all listings in their newspaper ad. Achieving name awareness and making the phone ring was the purpose of the Sunday ad. Firms monitored the results by keeping track of incoming calls generated by the advertisement, appointments made from those calls, homes showed, offers written, and listings procured.  

Advertise to Sell Any House

The Sunday real estate page had a ready audience of home sellers looking to find their home in the limited ad space. New listings had priority. After week one, a home fell into the rotation schedule. Selling a particular house was not the objective of the firm. Making the phone ring was. Real estate advertising was more likely to attract buyers who might buy any house or a seller who might have a similar home to sell. The homebuyer had a slim chance of finding the home they would own in the newspaper. Connecting with a real estate agent with access to the secret Multiple Listing Service inventory of homes was necessary to get into the actual pool of homes for sale. And then you still might be force-fed the firm’s listings before you got to look at properties listed by other firms. 

Zillow.com – Realtor.com. – Homes.com – etc.com

As the World Wide Web grew, REALTORS had the opportunity to solidify their place as the first or early point of contact in the home buying and selling process. Associations and committees don’t move as quickly or deliberately as private businesses. If changing long-held beliefs is required to take advantage of an opportunity, the opportunity will go to someone else. The dot-coms were someone else. Hellow Zillow. 

Online Is The Go-to Place To Find a House

The National Association of REALTORS released its 2019 study of home buying trends. Fortyfour percent of homebuyers told the association that they started their search online. (Some other statistics put the number at 88-90%.)  Zillow has a study that might contradict or support the NAR results. 

The Cost Of Advertising/Marketing and Real Estate Commissions

Associations, slow to change, are likely to apply old ideas to new methods. Mass marketing was and is the type of marketing real estate firms are most familiar with. Marketing to make the phone ring is now purchased to find leads. Revenue minus expenses = profit. When a firm spend money on internet marketing or newspaper advertising they have an expense. To make a profit revenue has to exceed expenses by a considerable margin. The cost or real estate service is in the commission charged by the firm. A more efficient way to connect buyers and sellers could result in lower selling fees for home sellers and lower acquisition costs for the buyer.

It’s possible to match specific homes to people who are the best candidates to be the next owner. Consider this: a dozen REALTORS will know a dozen people who might like a home new to the market. Those 12 will be alerted to see the house. Maybe 4 of those folks will arrange a showing. The technology exists for a computer to identify those 12 and more, and then cut the pool of prospects down to the one or two people most motivated to buy that house right now. Analytics uncovering the buyer before the person knows they are the buyer is creepy. But it’s possible. Now.

If it’s true that home owners want to sell homes in the least amount of time, for the most amount of money, and least inconvenience, analytics are the means to the end. I believe Zillow has all the information they need to identify from their pool of registered home buyers, the next owner of your home. Is that worth paying for?

The New WB-11 Offer to Purchase

Publish with flaws or stop the presses? 

Admitting we errored and getting it right before releasing flawed work would be easy if making excuses wasn’t easier. Consequences compounded is the unpleasant outcome of choosing easy.  The Wisconsin Residential Offer to Purchase, WB-11 released in the fall of 2019 and made mandatory effective January 1, 2020, was known to be flawed before it was released. Resistance to requests to delay the release surprised me. Resistance to suggested changes frustrated me. I’m grateful that the people in charge came around and made the necessary changes. 

 Professionals who participated in the writing and review process caught the problems created by a solution to a problem that didn’t exist. The committees in charge of developing the forms received unsolicited suggestions for corrections. Requests to hold implementation until changes could be made found no support in the WRA legal department. I saved the email replies I received from WRA staff legal folks. I use them as examples to remind me of what condescension feels to the recipient. 

Garbage in, garbage out is as accurate as it is simple. When a committee’s purpose is to generate a product, the level of quality and precision is secondary. Standardization is the primary intent of the State produced real estate transaction forms. Around the committee tables, we hear people talk about adding provisions that could eliminate the need for individual companies crafting their version of ideas that look good at the moment. Some contingencies were explicitly added to reduce a variety of company authored contingencies. The FIRPTA contingency inserted into the January 1, 2020 version of the WB-11 required each company to make their unique modification to fix the committee’s problem. If the public was better served by leaving them exposed to the unnecessary risks that the brokers may or may not fix, it’s a mystery to me.

Problem solved

The new WB-11 we began using on August 1, 2020, corrects the errors. Because there are a variety of solutions still floating around that introduced into the offer process to fix the problem, we now have a compounded problem that will take time and expense to fix. By leaving the solution to the firms who each solved the problem in their unique ways, we will live with the stray voltage of so many addenda that do not match the terms of the Offer. And when addenda conditions don’t match the current version of the State approved offer documents, validity issues arise.   

Home sellers and buyers who prefer to have enforceable contracts will be wise to work with lawyers and licensees who know where the problems lurk and how to make them go away. You can find out what the agent who wants your business knows about the Offer documents by asking them to explain the different sections and quizzing them on their own company addenda. If the agent knows where the flaws are and have solutions, they probably know how to make the Offer work for you. If they don’t, they’re just checking boxes and filling in blanks.