April 2, 2014 – Learn the right questions to ask to get the necessary foundational information for sound and durable real estate transactions in the latest edition of State Bar of Wisconsin PINNACLE’s Real Estate Transactions System.
Nick and you met while in college. The last time you saw him was several years ago at his wedding; the last time you checked, he was living in Madison. When Nick calls your office, he tells you that he has spent the past several weekends looking for a new home in rural Dane County, trying to find a place with a few acres where he can engage in a bit of hobby farming on the weekends. He has found property that’s a “steal.” Nick says he can envision the possibilities once he adds a few rooms, clears the brush, and disposes of the empty barrels in the shed. Nick would like to meet with you before proceeding with the deal. Are the questions below on your “to-ask” list for meeting with this potential client?
Is the client still married?
In Wisconsin, spouses’ property rights are subject to the state’s marital-property law regime. If Nick is married, it is vital to determine whether both his wife and he want to be considered owners of the property, how the property should be titled, and what types of funds will be used to purchase the property.
Will the client be selling his current home?
Although some people sell their homes on a “for sale by owner” (FSBO) basis, many use real estate brokers. The standard residential listing contract used in Wisconsin provides that the broker hired has the exclusive right to procure a purchaser for the property. It is not unusual for individuals selling property to not consult an attorney until after they have entered a standard listing contract and encountered a problem or fallen into a disagreement with the broker. If Nick is selling his current residence and has not yet hired a broker, you can craft an appropriate listing agreement.
Is the client’s current residence a condominium?
The sale and purchase of condominiums is subject to chapter 703 of the Wisconsin Statutes, which imposes detailed disclosure duties on developers and sellers of condominium units. In addition, sales of these units require the use of several specialized documents, the terms of which you can help Nick interpret and understand.
What kind of farming and fixing up is the client contemplating?
A prospective buyer must determine the current zoning of the property. If Nick’s intended use of the property is contrary to the zoning, you should advise Nick to make his offer contingent on rezoning. Depending on the extent of the repairs needed for the home itself, Nick might need a building permit, and the offer to purchase should be made contingent on obtaining such a permit or license.
Does the client know what used to be in the barrels?
The presence of chemicals might affect the property’s viability for growing plants and supporting animals and can impose significant remediation obligations on property owners. Nick might need to hire an expert to determine which substances the barrels used to contain, and then you and he must decide whether the property’s low purchase price will be offset by required clean-up costs and potential future tort liability.
Real Estate Transactions System is your toolbox for constructing a real property transaction as durable as your clients’ homes
PINNACLE’s Real Estate Transactions System will help you direct clients through the purchase or sale of real property with confidence that you can avoid the potentially immense legal and financial risks of property ownership. The book presents the basic residential real estate transaction step by step and introduces other types of real property transactions. The master information list and checklists in Real Estate Transactions System will equip you to gather crucial information from a prospective property buyer or seller. In addition, the book lays out the substantive and procedural law relevant to real property purchases and sales.
Real Estate Transactions System contains the most current versions of dozens of forms required or recommended for use in Wisconsin real estate transactions. The authors have annotated many of the forms to help attorneys understand the forms’ text and have crafted alternatives in sample agreements so that attorneys can choose the most appropriate provisions for specific situations. The revised sixth edition has been updated to reflect the latest developments in relevant federal and state statutes, case law, and regulations.
Real Estate Transactions System is available in both print and online (via Books UnBound®, the State Bar’s interactive online library). The book costs $219 for members and $269 for nonmembers. For more information, or to place an order, visit the WisBar Marketplace or call the State Bar at (800) 728-7788 or (608) 257-3838. Subscribers to the Bar’s automatic supplementation service will receive future updates at a discount off the regular price. Annual subscriptions to Books UnBound start at $149 per title (single-user price; call for full-library and law-firm pricing).