Free Wisconsin Real Estate License Contracts and Approved Forms Questions and Answers — Questions and Answers
Question 1: A Wisconsin real estate licensee is drafting a WB-11 Residential Offer to Purchase for a buyer client. The buyer wants to include a provision that is not covered in the standard approved form. According to Wis. Admin. Code § REEB 16, what is the proper procedure for the licensee to add this provision?
- Write the provision in the blank space under 'Additional Provisions' or attach a separate addendum. (Correct answer)
- Modify a pre-printed clause by crossing it out and writing the new provision next to it.
- Advise the buyer that no changes or additions can be made to state-approved forms.
- Use a separate, non-approved form that contains the desired provision.
Correct answer: Write the provision in the blank space under 'Additional Provisions' or attach a separate addendum.
Wisconsin Administrative Code § REEB 16 allows licensees to add provisions to approved forms by either filling in the blank lines provided (such as in the 'Additional Provisions' section) or by attaching a pre-prepared addendum. The addendum must be incorporated by reference into the approved form.
Question 2: A buyer submits a WB-11 Residential Offer to Purchase to a seller. The seller wishes to change the closing date and the amount of earnest money. Which of the following is the appropriate Wisconsin-approved form for the seller to use to propose these changes to the buyer?
- WB-40 Amendment to Offer to Purchase
- WB-44 Counter-Offer (Correct answer)
- WB-41 Notice Relating to Offer to Purchase
- A new WB-11 Residential Offer to Purchase
Correct answer: WB-44 Counter-Offer
A WB-44 Counter-Offer is used during negotiations before an offer has been accepted to propose changes to the original offer. It essentially rejects the original offer and presents a new offer with the desired changes. A WB-40 Amendment is used to change terms on an *already accepted* offer.
Question 3: According to the standard language in the WB-1 Residential Listing Contract - Exclusive Right to Sell, which of the following statements about the termination of the contract is TRUE?
- The seller can terminate the contract at any time with written notice, without penalty.
- The listing agent has the authority to mutually agree to terminate the listing with the seller.
- Neither the seller nor the firm has the legal right to unilaterally terminate the listing absent a material breach by the other party. (Correct answer)
- The contract automatically terminates if the property does not sell within the first 30 days.
Correct answer: Neither the seller nor the firm has the legal right to unilaterally terminate the listing absent a material breach by the other party.
The WB-1 listing contract explicitly states that neither the seller nor the brokerage firm can unilaterally terminate the contract before its expiration date unless the other party has committed a material breach. While a seller has the power to terminate, doing so without cause may constitute a breach of contract, making them potentially liable for damages.
Question 4: In a Wisconsin real estate transaction using the WB-11 Residential Offer to Purchase, what is the definition of 'Binding Acceptance'?
- When the last party to sign the offer does so.
- When the buyer receives verbal confirmation from the seller that the offer is accepted.
- When the accepted offer is delivered back to the party who made the offer according to the delivery terms specified. (Correct answer)
- When the earnest money is deposited into the listing firm's trust account.
Correct answer: When the accepted offer is delivered back to the party who made the offer according to the delivery terms specified.
Binding Acceptance occurs not just when the offer is signed, but when the signed, accepted offer is delivered back to the other party (or their agent) in a manner specified in the contract. This is a critical step that creates the binding contract. Until delivery occurs, the party who made the offer can typically withdraw it.
Question 5: A licensee is using a WB-44 Counter-Offer. The seller's first counter-offer (Counter-Offer #1) is rejected by the buyer, who then submits their own counter-offer. How should the buyer's counter-offer be numbered?
- Counter-Offer #1 by Buyer
- Counter-Offer #1A
- Counter-Offer #2 (Correct answer)
- It does not need to be numbered.
Correct answer: Counter-Offer #2
Counter-offers in a Wisconsin transaction should be numbered sequentially, regardless of which party is making the counter. If the seller makes the first one, it is #1. The buyer's response would then be Counter-Offer #2.
Question 6: A buyer includes an inspection contingency in their WB-11 Residential Offer to Purchase. The inspection report reveals a 'Defect' as defined in the offer. The buyer wants to ask the seller to make repairs. What is the buyer's next step according to the standard contingency language?
- Immediately terminate the offer.
- Provide the seller with a WB-40 Amendment to Offer to Purchase proposing the repairs. (Correct answer)
- Send the seller the full inspection report with a verbal request for repairs.
- Send a Notice of Defects to the seller, which automatically terminates the offer.
Correct answer: Provide the seller with a WB-40 Amendment to Offer to Purchase proposing the repairs.
While a buyer has the right to provide a Notice of Defects which can terminate the offer, if the goal is to negotiate repairs, the proper procedure is to propose a WB-40 Amendment to the seller. The WB-11 explicitly states that a proposed amendment is NOT a Notice of Defects. The parties must mutually agree to the amendment to change the terms of the accepted offer.
Free Wisconsin Real Estate License Contracts and Approved Forms Questions and Answers
A Wisconsin real estate licensee is drafting a WB-11 Residential Offer to Purchase for a buyer client.
The buyer wants to include a provision that is not covered in the standard approved form.
According to Wis.
Admin.
Code § REEB 16, what is the proper procedure for the licensee to add this provision?