October 2011 - Wisconsin Real Estate Magazine

DISCLOSURE DILEMMADisclosure challenges of stigmatized properties.

DECLINING PROPERTY VALUEBad for governments, good for taxpayers.

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october 2011 | vol. 28, no. 1

24

table of contents

10 Programs REALTORS® Must KnowThese top technology tips and tools should be on your radar in your practice of real estate.

Do You or Don’t You?Just in time for Halloween, a look at disclosure challenges of stigmatized properties marred by murders, suicides or hauntings from the past.

Court of Appeals to Decide Local Pierhead Ordinance CaseThe WRA is seeking clarity from the Wisconsin Court of Appeals on a local pierhead ordinance case.

Wisconsin Property Values Decline - AgainA deeper look at property types and property locations provides a better understanding of the decline in the state’s property values.

features articles

24

12 TenantsGoneBad:ALandlord’sGuidetoTenantTroubles

Facing obstacles with collecting rent, tenants disappearing, or serving a notice? Find solutions here.

16 TheBestoftheLegalHotline:ListingProtection Listing protection questions and answers are addressed,

from protected buyers to simultaneous listings in the MLS.

22 SalesTip:RentingisHazardoustoYourWallet! Why aren’t more potential homeowners buying in today’s

market? In this month’s sales tip, learn how, as a REALTOR®, you can come to the rescue.

27 U.S.SenateRaceBeginsWith Sen. Herb Kohl stepping down in 2012, the Wisconsin Senate race heats up.

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wisconsin real estate magazine | october 2011 1

United Way Honors tHe stark Family For service to commUnityUnited Way of Dane County

United Way of Dane County recognized the Stark Family with the 2008 Tocqueville Society Award for

outstanding service to the Dane C o u n t y community

a n d United Way. T h e Tocqueville

S o c i e t y Award celebrates and acknowledges people or families, such as the Starks, who have made a major impact on the quality of life in Dane

County through their exceptional service and commitment to the community.

city HoUsing aUtHority receives 100-Unit grantMilwaukee Journal Sentinel (09/25/08) Pabst, Georgia

The city of Milwaukee’s housing authority is due to receive $6.7 million in federal Hope VI money to build 100 new housing units. The 100 units will be constructed in a 2.5-mile area and will include 29 public housing and affordable rental units; nine affordable housing units for income-eligible families; and 62 moderately priced, open-market condominiums. HUD Secretary Steven C. Preston comments, “Milwaukee’s housing authority has demonstrated it has the leadership to lead and revitalize neighborhoods and transform lives. Cities like Milwaukee change and grow and need to revitalize housing to make sure many aren’t priced out.” Milwaukee is one of a half-dozen housing authorities nationwide to receive new Hope VI grants.

HoUsing stUdy delay FrUstrates advocatesMilwaukee Journal Sentinel (10/07/08) Williams, Scott

Two years after promising the Milwaukee metro area’s first major housing study in three decades, the Southeastern Wisconsin Regional Planning Commission (SEWRPC) is still struggling to get the effort launched. Proponents hope the study will serve as a catalyst for improving affordable housing opportunities throughout the city’s suburbs. But commissioners have yet to assemble an advisory committee to oversee the research or set a specific timetable for conducting the survey. Phil Evenson, the commission’s executive director, said other issues keep getting in the way. The delays have frustrated housing advocates the most. Bethany Sanchez, vice president of the Metropolitan Milwaukee Fair

Housing Council, laments, “It’s been a long time coming.” The Pewaukee-based commission has not conducted a comprehensive review of housing patterns since the 1970s.

Wisconsin receives millions to ease ForeclosUre crisis Milwaukee Business Journal (WI) (09/30/08)

The state of Wisconsin is due to receive nearly $39 million in federal funds to stabilize neighborhoods and stave off a spate of abandoned homes. According to HUD and Gov. Jim Doyle, the funds are separate from approximately $9.2 million the government is awarding the city of Milwaukee, where the foreclosure rate is currently 9.9 percent. HUD is awarding the funds via its Neighborhood Stabilization Program, under which almost $4 billion is being allocated to local and state governments for the redevelopment of abandoned and foreclosed houses.

sites: not JUst For Personal connections anymoreMinneapolis-St. Paul Business Journal (09/29/08) Grayson, Katharine

St. Paul, Minn.-based REALTOR® Teresa Boardman says Flickr, Facebook and other social networking sites make it easy to meet people who might eventually become clients. While many professionals are using these sites to make business contacts and companies use them to conduct background checks or recruit new workers, many simply want to connect with people who have similar interests. According to Boardman, “The hard sell is dead. It doesn’t work door-to-door, and it doesn’t work on social networks.” On Flickr, Boardman connected with a fellow photographer who eventually used her services to purchase a home.

ForeclosUres PUsH rents HigHer, sqUeezing loW income FamiliesMinnesota Public Radio (MN) (09/21/08) Olson, Dan

In Minnesota’s Twin Cities, a wave of home foreclosures has pushed more people into the rental apartment sector. The result is an intensifying demand on Minneapolis and St. Paul’s rental housing stock, so much so that the vacancy rate is very low and rents are on the rise. This, in turn, means low-income working families face higher monthly rents even though their income hovers at unchanging levels. Since 2005, the Twin Cities apartment vacancy rate has dipped from 7 percent to closer to 4 percent. Average monthly rents over that same time span are up more than $25, rising to more than $850. The St. Paul-based Wilder Foundation recently reviewed income data for several Twin Cities counties. The organization’s research found that the

number of people in those markets paying too much for their rental housing will double from around 70,000 currently to a whopping 140,000 by 2010. Some say a partial solution would be for the U.S. government to reverse course on housing policy and substantially increase funding for rental assistance, particularly help for working families.

nar releases Free FHa toolkit Wisconsin REALTORS® Association (10/30/08)

NAR and the WRA are eager to help you meet the current challenges of the troubled economy. We know that you need resources that can help you close transactions, and you need them at little or no 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.

News

Top News Stories in and Around the Industry

Bill MalkasianWRA President

here isalwaysamoment in time that youhave toface when leaving something you truly love andenjoy.AndmytimehascometoleavetheWRAafter36 years of service and move on to the National

AssociationofREALTORS®tobeginanewadventureinhelpingotherassociationsbuildtheirpoliticalandcommunityskillsetstoanotherlevelofcompetency.

Thedecisionwasactually easier than I thought as I believe infateasitwasMarch15,1975thatIwashiredbyDarwinScoon,theformerExecutiveVicePresident,at theageof23tobethepoliticallobbyistfortheWRA,andnow36yearslater,IleavetheWRAonedayaftermy60thbirthday,October17,2012.

When looking back on your career, you realize that not manyspend an entire career with one company or organization anymore.

Naturally for me, it was easy to stay because the REALTOR®leadership was progressive enough to believe in me and myideastomaketheWRAthebeststateassociationinthecountry.Mystaffovertheyearsmaturedintoawell-oiledmachinewithsuch great talent that gave the WRA a national reputation ofexcellence throughout thecountry.Tomystaffofall theyears,Isaythankyouforbelievinginme,andIoweyoumysuccess.

On thevolunteerside, Iwas fortunateenough toworkwith33REALTOR®Presidents,nowknownastheChairmenoftheBoard.Each of them were like a family to me in that we grew closeandIlearnedsomethingfromeachofthemandwillcherishtheirfriendshipforalifetime.

Tothelocalorganizations,includingvolunteersandstaff,Ican’tsayenoughofhowyouhelpedme,personally,andtheWRAgrowintoagreatassociation.Wearetrulyaleaderinbuildingeffectivepartnershipsinprogrammingforourmembership.

Andtothemembers,Imetthousandsofyouovertheyears-andImeanthousands!As Isaid lastmonthat theWRAConventionlookingintotheaudience,thankyouforyoursupportandbeliefinmethatIcouldtakethisorganizationwithitsvolunteersandmoveittoanationalmodel.YourdedicationtotheWRAbysupportingitthroughduesandprogramshasmadeahugedifference.StaythecoursewiththeWRA.

You don’t get anywhere without the support ofyour family and close friends. My family hasalwaysbeen there forme through thick and thin,and this column would not be complete withoutsayingthankyoutothemforalltheirsupportovertheyears.Theybackedmeandkeptmegoingandgrowingeveryday.

So as we pass the torch of leadership on to MikeTheo,yournewPresident,letmeassureyouthatMikeistheguyyouwantasthenextPresident.Heistalentedbeyondmeinmanywaysandwillmovetheshipforwardtoanotherlevelofperformance. It’swhatheshoulddoastheMalkasianlegacyhas ended and a new one has begun. Support him like youdid me and you will get results that will transform into newprogramsanddirectionsfortheWRA.

Toallofyoureadingthiscolumnandtoallthemembers,thankyouforthememoriesandgivingmethejobofalifetime.

Ohandbytheway,[email protected].

AndI’llseeyouatnextyear’sConvention!

Bill

with bill malkasian

t

inside the wra

2 wisconsin real estate magazine | october 2011 www.wra.org/wrem

Goodbye and Good Luck


rob keefe, [email protected]

renny diedrich, [email protected]

steve lane, [email protected]

William e. malkasian, cae, [email protected]

editorial staff:

William e. malkasianPublisher

robert UhrinaManaging Editor

lauren bizorikEditor

Joe leschisinSenior 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.

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.

contact Us:

4801 Forest Run Rd., Suite 201 Madison, WI, 53704-7337(608) 241-2047 • (800) 279-1972

legal hotline: (608) 242-2296 • (800) 799-4468general fax: (608) 241-2901 products/education fax: (608) 241-5168 legal hotline fax: (608) 242-2279 president fax: (608) 242-2267 e-mail: [email protected] Website: www.wra.org

Wisconsin Real Estate Magazine™ is published by the Wisconsin realtors® association. Trademark issued pursuant to Wisconsin state statute; federal

trademark is pending.Real estate

notes from the wra

facebook: www.facebook.com/wisconsinrealtorstwitter: www.twitter.com/wirealtorslinked-in: www.wra.org/linkedinyoutube: www.wra.org/youtube

thank you to the 2011 Wra convention sponsors and exhibitors

• AmericanHomeShield• AmericSpecInspectionService• AmeripriseFinancialServices,Inc.• ArchaelogicalConsultingandServices,Inc.• AssociatedBank• AxleyBrynelson• BadgerBasementSystems,Inc.• CentralizeShowingService• Century21RealEstate,LLC• CharterMedia• Chase• ChicagoTitle• ChristmasMountainVillageGolfResort–

WisconsinDells• ChulaVista-WisconsinDells• CommercialAssociationofREALTORS®Wisconsin• ComputerSystemInnovations,Inc.• ConnectingYou–SendOutCards• CookieLeeJewelry• DeeSignCompany• DepartmentofVeteransAffairsSt.PaulRegional

LoanCenter• DiverseSolutions• EnvironmentalInitiatives,LLC.• ExitRealtyCorp.International• FairwayIndependentMortgageCorp.• Field’sattheWilderness• FirstAmericanFundingCompanyLLC• FirstAmericanTitleInsuranceCo.• FirstFidelityHomeMortgageofWI,LLC• FirstWeberGroup• GreaterMilwaukeeAssociationofREALTORS®• Godfrey&Kahn• GrandGenevaResort&Spa–LakeGeneva• HEALTHPLANS123.com• HeidelHouseResort&Spa• HMSNational,Inc.• HoChunkCasinoHotel&ConventionCenter• HOMEFINDER.com• HomesteadRealty,Inc.• HolidayInnMadisonattheAmericanCenter• InsphereInsuranceSolutions• KalahariResorts®-WisconsinDells• KeefeRealEstate• KonicaMinoltaPrintingSolutionsUSA,Inc.• LakeoftheTorchesResort&Casino• Lowe’sCompanies,Inc.• LowenSignCompany• M&IPartofBMOFinancialGroup• MagnetsUSA• MLS,Inc.• OakleySigns&Graphics/HYSMarketing

Products,LLC

• Office2U• EmmonsBusinessInteriors• OlympiaResort&Hotel&Spa• –Oconomowoc• OrionCommunications,Inc.• PearlInsurance• PillarToPost• PlatinumPrintingandPackaging• PreferredAffiliates• PreferredTitle,LLC• PrimeLending,APlainsCapitalCompany• RadissonPaperValleyHotel–Appleton• R&SMarketing• RE/MAXNorthCentral• REGIT,Inc.• Sayas,Schmuki,Rondini&PlumSC• Scarf-It-Up!• ShowhomesSoutheastWisconsin• ShowingTime• Superlative,Inc.• SUPRA• SVAPlumbFinancial• Tagline, a product of Taggart Communications,

Inc.• TalmerBank&Trust• Teuteberg,Inc.• TheAbbeyResort• TheCheeseFactory–WisconsinDells• TheMadisonClub-Madison• TheNorthCentralGroup–Madison• TheOsthoffResort–ElkhartLake• TopProducer• UniversalHomeProtection,LLC• USDARuralDevelopment• Westphal’sGroup• WHEDA• WisconsinAssociationofHomeInspectors(WAHI)• WisconsinCRSChapter• WisconsinDepartmentofVeteransAffairs• WisconsinInspectionConsultants• WisconsinLegalBlank• WisconsinRestaurantAssociation• WisconsinSignII• WisconsinWomen’sCouncil• WoodCommunicationsGroup• WRA.ORGMobileWebsite• WRARealEstateSchool• WRARealEstateStore• WRAWinterConvention• zipLogix


Hello Wisconsin REALTORS®! It will be my privilege to serve as your Chairman

for the 2011-2012 year. By way of background, I grew up in Lake Geneva and spent nine years as a Naval Officer. In 2000, I left the Navy to join the family business where I spent time in mortgage and real estate development in addition to our core brokerage business. I’ve been blessed to be associated with and trained by some of the best real estate agents anywhere. I’m particularly excited about working alongside Chairman-Elect Renny Diedrich from Fox Valley and Treasurer Steve Lane from Steven’s Point. You have an outstanding slate of directors and committee members from every corner of the state representing your interests and guiding the Association into the future.

And what a future it will be. Among the many changes facing the WRA this year is the retirement of 33-year WRA President Bill Malkasian. Bill has guided the Association and its staff as long as most of us can remember - and longer than a significant portion of the membership has been alive! He has established Wisconsin as the premiere state association in the county, one often emulated by larger states. We wish him well as he goes to work for the NAR to help other states professionalize their political operations. I could devote this entire letter to listing Bill’s accomplishments but suffice to say that our business in Wisconsin is as healthy and consumer- and practitioner-friendly as it is because of Bill Malkasian. Succeeding him will be Mike Theo, current legislative director and long-time senior WRA staffer. While Mike has spent years learning from and working alongside Bill, he

has his own ideas and perspective on the WRA’s direction. Change is good, and I’m looking forward to his new ideas and enthusiasm. I have no doubt that Mike will create his own legacy in service of REALTORS® in our state.

I believe every leader of an organization should have a vision and organizational priorities. I have three for the upcoming year that I’d like to share with you.

1. First, our business has become more demanding, more complex and more difficult. Dodd-Frank rules, short sales, foreclosures, inflated inventory, social media, forms and electronic signatures represent just a partial list of the complexities today’s REALTOR® must deal with. Our clients expect us not just to be familiar with these, but to be experts worthy of their trust in the largest investment most will make. To keep that trust, we need to continually up our game. As a first priority, I will work to ensure that our Association is focused on improving the knowledge and professionalism of its members and keeping the bar high for those who practice real estate in Wisconsin.

2. Staying active politically is a key element in helping create a positive environment for REALTORS® and their clients in Wisconsin, particularly as the role of government in our professional lives continues to grow. The recent U.S. Supreme Court case Citizens United has changed the rules and landscape for political fundraising and advocacy throughout the country. We will work to ensure that the WRA adapts to and succeeds in this new environment.

3. Due in part to the effectiveness of our lobbying efforts, we are blessed with one of the most pro-REALTOR® and pro-private property legislative environments in many years. Now is the time to examine the laws and regulations governing the practice of real estate in Wisconsin. Many are outmoded or no longer serve their original purpose. Still others have been superseded by technological innovation or changes in practice. We will work to conduct a thorough review of our laws and regulations to identify those outmoded rules and regulations and work expeditiously to address them with the legislature and executive branch departments.

Finally, I’d like to extend my congratulations and gratitude to John Horning for the outstanding job he did leading the WRA last year. In turbulent times, we hope for a leader who is cool, calm, unflappable and able to keep the larger goals in perspective. This describes John to a tee. We were lucky to have him work for us, and his work has improved the lives of REALTORS® and their clients.

It’s going to be an exciting year. I look forward to working hard on your behalf. If you have questions or comments, please don’t hesitate to reach out to me at [email protected]. Stay in touch, stay involved.

Respectfully,

Robert KeefeChairman’s Corner

Rob Keefe


Statewide Company DirectorsJoyceBytof.............................................................. ColdwellBankerTheRealEstateGroup

CaseyClickner..................................................................................ShorewestREALTORS®

TamaraMaddente.................................................................FirstWeberGroup,REALTORS®

Regional Company DirectorsChristopherDeVincentis–RegionOne......................................................KeefeRealEstate

RobertWeber–RegionTwo.............................................................. FirstWeberGroup,Inc.

JudyHearst–RegionThree..................................... ColdwellBankerResidentialBrokerage

DennisSchwab–RegionFour................................................................. FirstWeberGroup

MichaelSpranger–RegionFive.........................FirstWeberGroupNorthernWisconsin,LLC

JKennethLee–RegionSix.......................................................................EdinaRealty,Inc.

JeffMoenning–RegionSeven............................................Century21Rautmann/SchilsRE

Regional-Representative DirectorsRoseBogosian–RegionOne..............................................................GonneringRealty,Inc.

DanielKruse–RegionTwo..................................................................Century21Affiliated

TerryMonroe–RegionTwo....................................................... StarkCompanyREALTORS®

PaulSchieldt–RegionTwo.........................................RealtyGroupofSouthCentralWILLC

JudyShortridge–RegionThree......................................LivingDimensionsRealEstateLLC

ArthurMays–RegionThree........................................................RealtyAmongFriends,LLC

DavidSchmidt,Jr.–RegionThree......................................................DaveSchmidtRealty

JohnDrzweiecki–RegionFour.......................................................Century21AcreRealty

KCMaurer–RegionFour....................................................... RE/MAX24/7RealEstateLLC

SharonHelwig–RegionFive........................................................RE/MAXAmericanDream

StevenLillestrand–RegionSix............................. ColdwellBankerRiverValleyREALTORS®

KragBromberg–RegionSix..................................................................... RE/MAXAffiliates

ThomasDidier–RegionSeven..............................................................RE/MAXUnitedLLC

Past Chairman DirectorsJohnFlor....................................................................................................SixLakesRealty

TerryHilgenberg..................................................... ColdwellBankerHilgenbergRealEstate

JohnHorning...................................................................................Shorewest,REALTORS®

Outside DirectorsKennethDickson............................................................................................ JohnsonBank

MilesMeidinger.............................................................................................TheTitleTeam

StephenProvancher.....................................................................NAIMLGCommercial,Inc.

Executive Committee

Robert Keefe, Keefe Real Estate......................................WRAChairmanoftheBoard

Renny Diedrich,

Coldwell Banker The Real Estate Group.................................................WRAChairman-elect

Steven Lane, First Weber Group Northern WI, LLC

.......................................................... WRATreasurer

Michael Theo, CAE........................................................President&CEO

Timothy Stemper, Shelter Real Estate........................................... Director-VicePresident

Paul Schieldt, Realty Group of So. Cen. WI LLC........................................... Director-VicePresident

Jeffery Theisen, J Theisen Inc REALTORS ...........................................................VicePresident

Peter Sveum, Coldwell Banker Success...........................................................VicePresident

Left to right: Peter Sveum, Steve Lane, Michael Theo, Jeffery Theisen, Rob Keefe, Tim Stemper, Renny Diedrich and Paul Schieldt

2011-2012 Board of Directors


ConventionScrapbook2011

RE BarCamp REALTORS®attendedthe

first-everWisconsinRE

BarCampwheretheybroke

intogroupstofreely

discusstechnologyand

marketingtopicswithno

instructors,agendasor

outlines.

Chairman’s Dinner NewlyinstalledWRAChairmanRobKeefe

speaksattheChairman’sDinnerafter

beinginstalledbyhisfatherMichael.

Opening Session KeynotespeakerBillStainton

delivershismessage“TheFive

BestDecisionstheBeatlesEver

Made”wherehehighlighted

thechoicesthatskyrocketed

TheBeatlestosuccess-and

howREALTORS®canmakethe

samegreatdecisions.

Exhibitors

Fromyardsignagetogreeting

cards,64exhibitorscameto

showcasetheirproductsand

services. Lifetime Service Award WRAPresidentBillMalkasianspeaks

afterbeingawardedforhis36yearsof

servicetotheAssociation.

monthly wisconsin housing reportnews

WISCONSIN HOUSING STATISTICS MONTHLY ACTIVITY - AUGUST 2011 Statewide AUG-2011 AUG-2010 % Change YTD-2011 YTD-2010 % Change

NewListings 10,054 10,797 -6.9% 81,101 96,526 -16.0% ClosedSales 5,422 4,135 31.1% 34,856 37,040 -5.9%MedianSalesPrices $139,000 $150,000 -7.3% $132,900 $142,500 -6.7%

Median Price Existing Home Sales Region AUG-2011 AUG-2010 % Change AUG-2011 AUG-2010 % Change

Southeast $151,800 $160,000 -5.1% 1,914 1,383 38.4%SouthCentral $160,000 $171,700 -6.8% 1,058 800 32.2%West $137,000 $134,950 1.5% 623 442 41.0%Northeast $124,000 $135,500 -8.5% 939 746 25.9%Central $119,000 $127,000 -6.3% 327 291 12.4%North $104,760 $139,700 -25.0% 553 459 20.5%

>

ByDaviDE.Clark,EConomist,C3statistiCalsolutions

For the second straight month, Wisconsin’s existing home sales were up by a substantial margin.

Home sales rose 31.1 percent in August compared to the same month last year, however median prices were down 7.3 percent to $139,000 over the same period, according to data released by the Wisconsin REALTORS® Association (WRA).

“This was not a surprise since home sales in July and August of last year were very low after the federal homebuyers tax credit program expired in June of 2010,” said Rob Keefe, Chairman of the WRA Board of Directors. The WRA indicates that monthly comparisons won’t be valid until at least the fourth quarter when sales are no longer distorted by last year’s federal program. “Nonetheless, on a year-to-date basis through the end of August, Wisconsin’s home sales are only 5.9 percent lower than last year, suggesting that 2011 is shaping up to look a lot like 2010,” said Keefe.

August sales were up by double-digit margins throughout the state, with increases in

excess of 20 percent in five of the six regions. The west region was up 41 percent, the southeast region rose 38.4 percent and the south central region increased 32.2 percent in August 2011 compared to August of 2010. Likewise, existing home sales were up 25.9 percent in the northeast and increased 20.5 percent in the north. Finally, the central region increased 12.4 percent in August compared to that month last year.

The median price of existing homes fell 7.3 percent in August 2011 compared to August 2010. “Median price comparisons are not apples-to-apples between last year and now because there may have been a significant shift in the characteristics of homes sold,” said WRA President Bill Malkasian. Data from the Federal Housing Finance Authority (FHFA), which accounts for these qualitative differences in homes, shows Wisconsin’s home values are down 4.5 percent for the second quarter compared to last year, and prices are down 10.8 percent over the past five years, according to Malkasian. “While Wisconsin is far better off than western states like California, Arizona and Nevada, where homes of consistent quality saw

their prices drop between 45 percent and 58 percent over the last five years, the weak economy has certainly softened our prices,” said Malkasian. “Luckily, we didn’t see the huge price bubble that occurred elsewhere,” he said.

Housing however remains very affordable in Wisconsin, according to the report. The combination of low mortgage rates in the 4.7 percent range and low prices, has led to very affordable prices. The Wisconsin REALTORS® Housing Affordability Index measures the percent of the median priced home that a buyer with the median family income can buy, and the index stood at 226 in August 2011. The index is up from a revised level of 205 in August of last year. “With nearly 17 months of inventory on the market, this will be a buyer’s market for the foreseeable future,” said Malkasian. “For buyers with good credit and a good down-payment, there are some excellent bargains in this market,” he said.

For more information, contact David E. Clark, Economist, C3 Statistical Solutions Office phone: (414) 803-6537

Home SaLeS Up aGain in aUGUStView all housing statistics at

www.wra.org/housingstatistics



ByjoElEsChisinanDroBuhrina

GoogleHaveyouheardofit?Ofcourseyouhave-but

doyouuseittothefullestextent?Google

providesendlesstoolsthatwillkeepyourwork

andpersonallifeorganized.

Gmail

Gmailinteractswithmobilephonesbetterthananyothere-mailservice

onthemarket.Itissimpletosetupandeasytofeedanycurrente-mail

accountthroughGoogle.Constantlyimproving,Gmailallowsforless

spam,quickersearchresults,andisevensmartenoughtoputpriority

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Calendar

GoolgeCalendarisagreatwaytoorganizeyourprofessionaland

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Documents

Ifyouwantasimplesolutiontohavingdocumentsatyourfingertips,

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Powerpointfilesontheflywithouthavingtheprograminstalledonyour

computer.

Analytics

IfyouhaveaREALTOR®websiteanddon’thaveGoogleAnalytics

installed,youarefarbehindyourcompetition.Youshouldbemonitoring

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FormoreinformationonGoogle’stools,visitwww.google.com/services.

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Whether rental property is a side project, your primary business or a professional endeavor, no property owner likes to hear that the tenants are gone, disappeared to

goodness knows where, or have “gone bad” and stopped paying rent. Steady rental income from reliable tenants is a blessing, but unfortunately not all are cut from the same cloth. Tenants do sometimes hit a rough patch and just pack up and leave in the middle of the night, stop paying rent or violate other lease terms. The landlord then must go through the messy process of terminating the tenancy.

Disappearing Tenants

The tenant dips out before the end of the lease term, leaving the landlord scratching his head over what to do next. The first order of business may be to look for a new tenant. If a tenant breaks the lease, the tenant remains liable for the rent for the balance of the lease term, subject to the landlord’s duty to mitigate as stated in Wis. Stat. § 704.29. The tenant will have to pay rent until a new tenant signs a lease and begins paying rent. The landlord may charge the tenant the actual costs associated with re-renting the unit, but not for time spent.

Some tenants who leave early engage in a little self-help rent proration and pay the landlord based only on the number of days they actually occupied the property before their early departure. If the written lease entitles the tenants to occupy the premises until the end of the month, then the landlord is entitled to the full month’s rent. The tenants cannot unilaterally prorate the rent just because they vacated a few days or weeks early, unless such a right is specified in the lease or the landlord agrees. The landlord’s remedy? Wis. Admin. Code § ATCP 134.06(3)(a)(2) provides that a landlord may withhold from a tenant’s security deposit for “ unpaid rent for which the tenant is legally responsible, subject to § 704.29, Stats.”

When Did the Tenant Surrender?

The deadline for returning the security deposit – or what remains after deduction for rent not paid or the documented costs of repairing any damage to the premises – becomes challenging when the tenant vacates early without providing any formal notice. If the tenant turns in the keys six weeks early, when must the security deposit be returned?

Wis. Admin. Code § ATCP 134.06(2)(a) provides that a landlord must return the security deposit - less any amounts withheld - within 21 days after the tenant surrenders the premises. § ATCP 135.06(2)(b)

provides that a tenant surrenders the premises on the last day of the rental agreement, except that “if the tenant vacates before the last day of the tenancy and gives the landlord written notice that the tenant has vacated, surrender occurs when the landlord receives the written notice. If the tenant mails the notice to the landlord, the landlord is deemed to have received the notice on the second day after mailing.” Failure to comply with the security deposit rules may lead to double damages plus attorney fees.

At this juncture the prudent landlord checks with a local attorney. Some may opine that it is safe to return the security deposit within 21 days of the return of the keys, but others may advise that the 21 days is not triggered until the last day of the rental agreement because returning the keys is not the same thing as giving written notice. It is important to know how this is applied locally because being wrong could be costly.

Deceased Tenant

Sometimes tragedy strikes and a tenant passes away. Wis. Stat. § 704.165 provides that if a residential tenant dies, the tenancy is terminated on the earlier of (1) 60 days after the landlord receives notice, is advised or otherwise becomes aware of the tenant’s death, or (2) the expiration of the term of the rental agreement. In the case of the death of a residential periodic tenant or tenant at will, the tenancy is terminated 60 days after the landlord receives notice, is advised or otherwise becomes aware of the tenant’s death. Neither the deceased tenant nor the tenant’s estate is liable for any rent after the termination of the tenancy. A landlord may not approach, contact or communicate with a member of a deceased tenant’s family for the purpose of obtaining rent for which the family member has no liability. The landlord may, however, communicate with the family regarding the removal of the tenant’s personal possessions.

Tenant Not Paying Rent

If a tenant is habitually late or stops paying rent altogether, the landlord may give the tenant notice regarding that deficiency. Landlords must carefully review Wis. Stat. § 704.17.19 to determine what type of notice to use and whether the tenant has the right to cure the default or must simply move out. See pages 5-7 of Legal Update 03.07, “Residential Rental Primer” at www.wra.org/LU0307 for a detailed discussion of which notice form is appropriate depending on the type of tenancy and the kind of default involved.

tenantS Gone Bad: a Landlord’s Guide to tenant troubles

legal

ByDEBBiConraD


The WRA has several recently revised notice forms that may be used depending on the circumstances:

WRA-5DRV – 5 Day Notice to Remedy Default or Vacate Premises WRA-5DVN – 5 Day Notice to Vacate - Nuisance WRA-14DN – 14 Day Notice Terminating Tenancy WRA-28DN – 28 Day Notice Terminating Tenancy WRA-30DN – 30 Day Notice Terminating Tenancy

These notices were updated to remove the “fill-in-the-date” language indicating that the tenant must vacate “on or before __________.” Frequently landlords would fill in a date only to experience a delay in getting the notice served. The result was that the filled-in date was wrong, giving the court grounds to dismiss the case. The language in the updated forms states, “within five days from service hereof,” and thus protects the landlord from making these inadvertent errors.

The next question concerns how the notice will be served. Failing to give notices in strict accordance with Wis. Stat. § 704.21 may give the tenant grounds to defeat the termination of the tenancy or the landlord’s associated claim for rent or other damages. § 704.21(1) provides that the landlord must give the tenant notice by one of the following methods:

§ 704.21(1)(a) “By giving a copy of the notice personally to the tenant or by leaving a copy at the tenant’s usual place of abode in the presence of some competent member of the tenant’s family at least 14 years of age, who is informed of the contents of the notice.”

§ 704.21(1)(b) “By leaving a copy with any competent person apparently in charge of the rented premises or occupying the premises or a part thereof, and by mailing a copy by regular or other mail to the tenant’s last-known address.”

§ 704.21(1)(c) “If notice cannot be given under par. (a) or (b) with reasonable diligence, by affixing a copy of the notice in a conspicuous place on the rented premises where it can be conveniently read and by mailing a copy by regular or other mail to the tenant’s last-known address.” Note: you must use reasonable diligence; it is best to use both regular and certified mail with a certified mail receipt.

§ 704.21(1)(d) “By mailing a copy of the notice by registered or certified

mail to the tenant at the tenant’s last-known address.” Note: add two days for service by mail and get a certified mail receipt.

§ 704.21(1)(e) “By serving the tenant as prescribed in s. 801.11 for the service of a summons.”

Notices sent by e-mail are not on this list and will not generate effective service. But § 704.21(5) states, “If notice is not properly given by one of the methods specified in this section, but is actually received by the other party, the notice is deemed to be properly given; but the burden is upon the party alleging actual receipt to prove the fact by clear and convincing evidence.” So electronic delivery might still work in some cases where actual receipt is admitted or can be proved.

Once the notice has been successfully given, if the tenant does not pay the late rent or vacates the premises, then the landlord may proceed to an eviction action in small claims court.

The owner or an attorney may need to file the eviction action and appear in court. Under Wis. Stat. § 799.06(2) either the actual person, the person’s attorney, or a full-time authorized employee of the person must appear in small claims court. The definition of a full-time employee for this purpose is a person on payroll who is an employee of the property owner entity. A landlord which is a limited liability company (LLC), for instance, must be represented by an attorney because most LLC rental property owners receive dividends and are not paid wages.

For basic information regarding small claims actions, see the Basic Guide to Wisconsin Small Claims Actions online at www.wicourts.gov/publications/guides/smallclaimsguide.htm. There also is a self-help small claims website at myforms.wicourts.gov/

See the April 2009 Legal Update, “Wisconsin Rentals” at www.wra.org/LU0904, Legal Update 03.07, “Residential Rental Primer” at www.wra.org/LU0307 and Wis. Stat. chapter 704 at www.legis.state.wi.us/statutes/Stat0704.pdf for additional information.

Debbi Conrad is Senior Attorney and Director of Legal Affairs for the WRA.


ByCorilamont

do You or don’t You? The Dilemma of Disclosing a Property’s Stigmatized Past


I once heard that paranormal activity is notably higher in the cooler months, but it is not clear whether this is due

to the drop in temperature or the fact that more people pay attention to the unusual because of Halloween. However, as we begin to move into fall, there’s no better time to discuss stigmatized properties and the past that such properties hold.

Typically when we discuss stigmatized properties, we focus our attention on properties that were the site of a murder, suicide or haunting. Such examples include the Brentwood, California home where the notorious murders of Nicole Brown Simpson and Ron Goldman occurred in 1994; the home of the 1996 murder of 6-year-old Jon Benet Ramsey in Boulder, Colorado; and the properties of infamous Wisconsinites Jeffrey Dahmer and Ed Gein.

And it seems that every licensee has heard the story about the notoriously haunted home and its related Reader’s Digest article when we discuss the New York haunting case Stambovsky v. Ackley. In this case, the buyer sued for rescission of his purchase after he learned the house he bought was reputably possessed by poltergeists. The court concluded that where a condition materially impairs the value of a property and the matter is peculiarly within the knowledge of the seller or unlikely to be discovered by a buyer exercising due care, nondisclosure would be a basis for rescission.

So I began to wonder: if in New York, poltergeists materially impair the value of the property, how would a court perceive current or previous ownership by the notorious? The category of notorious could include the homes and properties of the famous and the infamous. One example, for instance, is the multi-million dollar Georgia mansion of former Atlanta Falcon quarterback Michael Vick, whose criminal actions against Pit bulls are well-known. Or the Palm Beach, Florida home of Bernie Madoff, the mastermind of the $65 million Ponzi scheme. And in our own backyard in the state of Wisconsin, the 407-acre Couderay, Wisconsin hideout of notorious 1920s criminal Al Capone.

The homes of the notorious present both marketing and disclosure challenges for the real estate agents involved.

Wis. Stat. § 452.23 (2) (a) states that a licensee is not required to disclose “that

a property was the site of a specific act or occurrence, if the act or occurrence had no effect on the physical condition of the property or any structure located on the property.” This statute is intended to apply to “stigmatized properties” which have been or are the site of a murder, suicide, haunting or other notorious event which does not physically damage the property. If the event resulted in physical damage, the seller would normally be required to disclose the defect on a Real Estate Condition Report (RECR).

Since reputation and notoriety don’t physically damage the property, the questions real estate agents are presented with include:

• If the seller does not disclose the property’s ownership history, do I have to disclose it?

• If so, will the information have a positive or negative impact on the value of the property?

So do you or don’t you? If the agent and respective broker believe the information is a material adverse fact, then licensee disclosure is required. If the agent and broker do not believe the information is a material adverse fact - often on the advice of legal counsel - then no licensee disclosure required. Wis. Admin. Code § RL 24.07 (2) requires licensees to disclose known material adverse facts and information suggesting material adverse facts in writing to all parties in the transaction in a timely manner. Licensees would be obligated to make this disclosure even if the client directs the licensee not to disclose.

Whether the information is a material adverse fact is a judgment only the broker can make after considering the facts and circumstances. If the competent licensee knows that this fact: (1) has a significant adverse effect on the value of the property, (2) significantly reduces the structural integrity of the property, (3) presents a significant health risk to the occupants of the property, or (4) is information that indicates that a party to the transaction is not able to or does not intend to meet their obligations under the contract, then the issue constitutes an adverse fact.

If a party to the transaction were to indicate, or if a competent licensee would generally recognize that this fact is of such importance that it would affect a reasonable party’s decision to enter into a contract or would

affect the party’s decision about the terms of the contract, the fact is both adverse and material.

The question of whether the seller or agent must disclose a property’s notorious ownership is gray. On a RECR, the seller is asked to disclose conditions that would have a significant adverse effect on the value of the property. Although it is not easily quantified, it is possible that a notorious owner, specifically with a criminal reputation or past, could significantly affect property value or the new owner’s ability to resell a property.

Even if there is no physical damage, there may be a sort of psychological damage present. Typically buyers find out about the event, occurrence or previous owner’s notoriety from the neighbor. For that reason, real estate licensees may encourage sellers to let the licensee disclose the house’s history in order to avoid potential future disputes.

In the 1992 Green Springs Farms case, the Wisconsin Court of Appeals held that a seller had the duty to fully disclose to potential buyers the existence of conditions material to the buyer’s decision to purchase which the buyer is in a poor position to discover. Although this duty to disclose holding has not yet been applied to a stigmatized property case, including notorious ownership, it arguably could be.

There is an upside to a property with a past, whether that past is good or bad. There are some buyers that like the idea of living in a home with built-in history. While there are buyers that prefer a property with a reputation of being haunted, others may be drawn to the idea of living in a home previously owned by a celebrity, regardless of that celebrity’s reputation. Albeit this group may be a small percentage of buyers, at the end of the day, it’s a group that the seller and listing agent may decide is exactly the group they wish to market to.

There really is a buyer for every home.

For more information regarding stigmatized properties, review the National Association of REALTORS® resource Field Guide to Dealing with Stigmatized Properties at www.realtor.org/library/library/fg703.

Cori Lamont is Director of Brokerage Regulation and Licensing for the WRA.


The state-approved WB listing contracts allow for extension of the listing period when there are Protected Buyers, or what is commonly referred to as “listing protection.” Based

on the contract, the listing broker has an additional year after the listing’s expiration to sell the property to any protected buyers. Listing protection is created based on the contract between the listing broker and seller; it is not a matter of law.

For any buyer to become a Protected Buyer, there are, in essence, two components to address: what the buyer did and what the seller knows. The buyer must have negotiated and the seller must know or have notice of the buyer’s name. Using these two components, many questions about listing protection can be readily answered. Some buyers become Protected Buyers automatically, and for some the broker has to take action and provide the buyer’s name to the seller.

A buyer automatically becomes a Protected Buyer in two situations: when there is a written offer and when the buyer and seller directly negotiate. The two components are present when the buyer has written an offer to purchase: the buyer clearly negotiated by submitting the offer and the seller knows the buyer’s name because it is stated in the offer. When a buyer and seller discuss potential purchase terms, that discussion is negotiation and the buyer is known to the seller.

If the negotiation is not directly with the seller, the listing broker

must properly notify the seller of the buyer’s identity. In such situations, the components of negotiation and notice still need to be present. Negotiation can occur when a buyer attends an individual showing of the property or when the buyer discusses potential purchase terms with the listing or a cooperating broker. The buyer in this case only becomes a Protected Buyer if the listing broker delivers written notice of the buyer’s name to the seller within the applicable time frame stated in the listing contract.

Proper Delivery

The broker had a listing which expired about two weeks ago. The broker drafted a protected buyer letter and mailed it to the seller within three days of the listing expiration. One of the Protected Buyers has renewed interest, so the broker drafted an offer and submitted it to the seller. The seller accepted the offer but the seller claims he did not receive the list of Protected Buyers. Does the seller owe the listing commission?

To have effective listing protection, the broker may need to prove proper delivery. The notice must be in writing, delivered in a timely manner and by an authorized delivery method to an authorized address, and name the buyer unless the identity is confidential. In a recent successful broker commission case, the court specifically noted that the listing broker had provided proof from the United States Post Office that the list of Protected Buyers was timely delivered. Spending the money to have proof of delivery is good

legal

best of the legal hotline with tracy rucka

legal

Listing protectionWho are Protected Buyers?


insurance if a seller attempts to challenge timing of delivery. See Burkett & Associates v. Teymer, 2009 WI App 67, online at www.wisbar.org/res/capp/2009/2008ap001509.htm.

In addition, the broker must assure that a mailed notice is addressed to the party using the address on the listing contract. Another frequent mistake is that the broker e-mails the list of protected buyers to the seller. Unless the listing was modified, e-mail is not an authorized delivery method even if the seller put an e-mail address on the listing contract.

Name the Buyer

The agent is listing a property that was previously listed. The agent who had the first listing produced a list of agents who had shown the home without any buyers’ names. Would this list create listing protection or does the list need to contain the buyers’ names?

The general rule is that the buyer needs to be named with specificity. In one Wisconsin case, the court found that the seller’s actual knowledge of the prospective buyer’s identity was not enough. In that transaction, the broker worked with both Helmer Miller and his adult son Howard Miller. The owner knew that the broker worked with both Millers in an attempt to procure an offer to purchase. Prior to the expiration of the listing, the broker filed with the seller a list of protected buyers, including “Herman Miller,” which everyone understood was intended to be Helmer Miller. The owner later sold to Howard. When the broker sued for commission, the court found against him because Howard’s name was not on the list. The court stated that the listing contract provision regarding protected parties would be read strictly against the broker; in other words, the broker would have to comply with every provision to the letter. Dunn & Stringer Inv. Co. v. Krauss, 264 Wis. 615, 60 N.W.2d 346 (1953).

An exception to the rule arises when a selling agent cannot legally provide the name of the buyer because the buyer indicated that his or her name is confidential information on the agency disclosure form or in some other manner, preferably in writing. According to the terms of the listing contract, if a buyer has requested that his or her identity remain confidential, delivery of a notice identifying the broker with whom the buyer negotiated and the date(s) of any showings or other negotiations fulfills the “delivery of the buyer’s name” requirement.

If the listing agent provided the cooperating agent’s or broker’s name and other identifying information regarding the showing or other negotiations, then listing protection may have been established if this was done because that buyer had requested confidentiality. See lines 220-229 of the WB-1 Residential Listing Contract. If this information was provided for any other reason, then the establishment of listing protection is unlikely. The seller should speak with the first broker or legal counsel to determine whether there were in fact confidential buyers or if the broker just did not obtain the buyers’ names.

For additional information regarding listing protection, see pages 5-6 and 8-9 of the October 2007 Legal Update, “WB-1 Listing Contract

– 2008 Revisions” online at www.wra.org/LU0710 and pages 8-10 of the February 2004 Legal Update, “Listing Procedures for the Prudent Broker,” at www.wra.org/LU0402.

In Search of Protected Buyer Identities

Aren’t buyers automatically protected when there is a one-party listing?

Once again, the components of listing protection are what the buyer did and what the seller knew. If the buyer’s name is stated in the one-party listing, the seller knows the buyer’s name. The only question then is whether, during the term of the listing, the buyer engaged in conduct that would create listing protection, such as submitting an offer, negotiating with the seller or broker, or attending an individual showing.

How does a listing broker know if there are Protected Buyers?

Although many listing brokers ask if the seller has a list, that does not take into consideration all the possible ways a buyer can be protected. The prudent listing broker may ask the seller the following questions to determine if there are Protected Buyers because Protected Buyers from a prior listing contract are automatically excluded from the listing by virtue of the listing contract language:

1. Was the property listed before? How many listings have there been in the past year? Who was or were the prior listing brokers?

2. Did the seller receive any offers to purchase? Who were the buyers?

3. Did the seller negotiate with any buyers directly? Who were the buyers?

4. Did the seller receive any lists of protected buyers or showing reports from any prior listing brokers?

Two Listings: Property in the MLS Twice

An agent has a REO property listed. It was previously listed with another broker, but the lender foreclosed and acquired the property at a sheriff’s sale. The previous broker is still advertising the property on the MLS. The second listing agent does not believe the first broker has a valid listing contract any more since the property is now owned by the bank. The previous broker states his attorney told him he has a contract through the end of the year. Who is correct?

It is possible for a variety of reasons for a property to be listed in the MLS simultaneously by more than one listing broker. A common example is where one broker has a listing with one spouse and the other spouse engaged a different broker. In this situation, the first listing broker appears on paper to have a valid listing contract with the previous owner that will not expire until the end of the year. However, because title passed to the lender, the prior owner has no authority or ability to sell the property. In such cases, the second broker would not concern themselves with Protected Buyers because the listing is with a different seller.

Tracy Rucka is Director of Professional Standards and Practices for the WRA.


education

CRS201 - Listing StrategiesOctober 26-27, 2011Co-Sponsored with Wisconsin CRS ChapterWRA Headquarters, Madison

The Listing Strategies Course from the Council of Residential Specialists will help you identify the motivations and concerns of today’s sellers and help them close the deal. You’ll learn how to price effectively in the current market and get a faster sale, and you’ll also learn how to access scripts to work with clients and get their house sold at a fair price. More information is available at www.wra.org/CRS_overview.

Management ConferenceDecember 7-8, 2011Country Springs Hotel & Conference Center | Pewaukee, WI

If you’re a manager or broker, the WRA’s Management Conference is just for you! With several great sessions, you’ll gain insight into the economy and your practice – relevant for today and tomorrow. You’ll learn about marketing, technology and more in a variety of workshops offered at Management Conference.

www.wra.org/mgmtconference

Broker Pre-License CourseOctober 31-November 3, 2011WRA Headquarters, Madison

Broker pre-license education will increase from 36 to 72 hours, effective July 1, 2012. Also on the horizon is a proposed change to job experience requirements to become a broker. Under the proposal, Wisconsin broker applicants would be required to show two years of documented real estate experience as a real estate salesperson within the last four years preceding application.

The Broker Pre-License 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. Completion of Sales Pre-License education and passing the real estate sales exam are prerequisites. Completion of the Broker Pre-License Course, passing the Broker exam and receiving the Broker’s license fulfills the 2011-2012 Continuing Education credits.

www.wra.org/Broker_career

BPO (Broker Price Opinion)October 25, 2011WRA Headquarters, Madison

Earn the Broker Price Opinion Resource (BPOR) Certification!

Whether you are experienced at preparing broker price opinions (BPOs) or are new to the business, this new NAR certification course will provide you with the know-how to produce professional and accurate BPOs. With your BPOR certification, you’ll be able to prepare accurate BPOs, evaluate market tools for productive preparation of BPOs, and identify and weigh all factors influencing the creation of a useful valuation.

Upon completing this one-day course, you’ll be required to view a free webinar, submit the BPOR application and pay a one-time fee to earn the BPOR certification. The course also meets the elective course requirement for the ABR designation. Submitted for continuing education credits.

www.wra.org/BPOR_overview

Appraisal Continuing Education

• October 14, 2011 Land Valuation – Getting It Right (3.5 hours) Wisconsin Dells

• October 14, 2011 Appraising Waterfront & Lakeshore Property (3.5 hrs.) Wisconsin Dells

• October 18, 2011 7-Hour National USPAP 2012-2013 Update Madison

• October 19, 2011 Appraising 2-4 Family & Multi-Family Properties (7 hrs.) Appleton

• October 20, 2011 Foreclosures and Short Sales: Dilemmas and Solutions (7 hr.) Brookfield

• November 2, 2011 7-Hour National USPAP 2012-2013 Update Brookfield

www.wra.org/APPCE

QuickStartOn DemandThe 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 is four days, and passing the exams fulfills the requirements for GRI Course 1. Visit www.wra.org/QuickStartondemand.


Course Schedule

Visit www.wra.org/CourseSchedule for full schedule.

Sales & Marketing Management date course location thru 10/11 after 10/11 a.t.d.

October 25, 2011 BPO (Broker Price Opinions) Madison $110** $120 $140 October 26-27, 2011 CRS201 – Listing Strategies*** Madison $235** $245 $265 Co-sponsoredwiththeWisconsinCRSChapter thru 1/10 after 1/10 a.t.d. January 25, 2012 Resort & Second Home Markets Lac du Flambeau $195 $205 $225 (Includes convention)

conference and conventions date event/course location

December 8, 2011 Management Conference Country Springs Hotel, Pewaukee December 7, 2011 Course 4: Business Ethics for the Supervising Broker

January 25-27, 2012 Winter Convention Lake of the Torches, Lac du Flambeau

Real Estate Continuing Education Date course location Price

October 11, 2011 2011-12 Courses 3 & 4 Green Bay 920-739-9108 October 13, 2011 2011-12 Courses 3 & 4 Appleton 920-739-9108 October 13, 2011 2011-12 Courses 3 & 4 Ripon 920-294-6850 October 19, 2011 2011-12 Courses 1 & 2 Madison 800-279-1972 $27/m;$35nm October 20, 2011 2011-12 Electives A & C Appleton 920-739-9108 October 25, 2011 2011-12 Electives A & C Green Bay 920-739-9108 October 27, 2011 2011-12 Electives A & B Ripon 920-294-6850 November 1, 2011 2011-12 Courses 1 & 2 Brookfield 800-279-1972 $27/m;$35nm November 3, 2011 2011-12 Elective A & D Sturgeon Bay 920-743-9651 November 9, 2011 2011-12 Courses 3 & 4 Madison 800-279-2971 $27/m; $35nm November 9, 2011 2011-12 Courses 3 & 4 Manitowoc 920-553-6227 November 9, 2011 2011-12 Courses 3 & 4 Brookfield 800-279-1972 $27/m;$35nm November 11, 2011 2011-12 Elective C & D Brookfield 800-279-1972 $27/m;$35nm

2011-12 Electives: Elective A – Short Sales & Foreclosures Elective B – Environmental Matters Elective C – Other Approved Forms Elective D – Financing Appraisal Continuing Education Date course location October 14, 2011 Land Valuation – Getting It Right (3.5 hours)(a.m.) Wisconsin Dells October 14, 2011 Appraising Waterfront & Lakeshore Property (3.5 hrs.)(p.m.) Wisconsin Dells October 18, 2011 7-Hour National USPAP 2012-2013 Update Madison October 19, 2011 Appraising 2-4 Family & Multi-Family Properties (7 hrs.) Appleton October 20, 2011 Foreclosures and Short Sales: Dilemmas and Solutions (7 hr.) Brookfield November 2, 2011 7-Hour National USPAP 2012-2013 Update Brookfield November 3, 2011 The Value of Green (7 hrs.) – (7 hrs.) Madison November 10, 2011 Vacant Land Appraisal (3.5 hours) Rice Lake November 10, 2011 Rural and Unique Properties (3.5 hours) Rice Lake November 15, 2011 7-Hour National USPAP 2012-2013 Update Appleton November 16, 2011 Technology for Mobile Professionals (3.5 hrs.) (a.m.) Brookfield November 16, 2011 Principles & Procedures of Residential Review (3.5 hrs.)(p.m.) Brookfield

SubmittedforWisconsinAppraiser&AssessorandMichiganandMinnesotaAppraiserCE

Pre-License date course location member price non-member price Oct. 3-6; 10-13, 2011 Sales Pre-License Course Madison $325* $325* Oct. 31-Nov. 3, 2011 Broker Pre-License Course Madison $260* $280* *Plusbooks

Available online!

StartQuicksales training program

www.wra.org/QuickStartOnDemand

*Plus books** early registration applies two weeks prior to the start of the course.***Wisconsin CRS Members receive a $20 discount# Appraiser section members receive a discount

The 2009-2010 real estate continuing education is still available through On Demand, DVD and Self-Study Booklets:Course 1 – Listing ContractsCourse 2 – Offer to PurchaseCourse 3 – New DevelopmentsCourse 4 – Buyer Agency AgreementsElective A – Risk ReductionElective B – 1031 Exchanges and Exchange OpportunitiesElective C – CondominiumsElective D – Landlord/Tenant and Property ManagementElective E – FinancingElective F – Broker Supervision


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Much like the Cover Sheet currently in zipForm, the TransactionInformationfeatureislikeamastercoversheetbuiltintozipForm®6. Simply type standard information, such as buyer and sellernames, into the cover sheet, and that information automaticallypopulatesintoanyformscreatedwithinthattransaction.TransactionInformationalsogivesuserstheabilitytoimportinformationdirectlyfromthezipForm®6addressbook.Importingfromtheaddressbookeliminates theneed to re-enter previously saved information.Theaddress book is also available for sending e-mails, e-signaturesand faxes right from zipForm® 6. No more typing or looking upinformation when all you want to do is send your clients a quickmessageorfax.

Transaction Information is just another effort by zipLogix®, themakersofzipForm®6,tomaketheprogramassimpleaspossible.TheWRAiscommittedtomakingtheforefrontoftechnologyservicesavailabletoourmembersinthemostuser-friendlywaypossible.

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Lake of the Torches Resort Casino & Convention Center

2012 Winter Convention

January 25-27, 2012

Wednesday, January 25

8:30a.m.-4:30p.m. Resort and Second Home Markets - ABR Elective and Core Course for the RSPS Certification

8:30a.m.-12:00p.m. CE Elective A Short Sales and Foreclosures

1:00p.m.-4:30p.m. CE Elective C Other Approved Forms

2:00p.m.-5:00p.m. Snowmobile outing, snowshoeing, cross country skiing, ice fishing (make your own reservations)

4:30p.m.-6:00p.m. Exhibits Open

4:30p.m.-6:30p.m. Welcome Party, DJ + Karaoke

4:15p.m.-6:30p.m. Chili Cook-Off: Enter your favorite recipe and you may win a prize! Sponsored by Northwoods Association of REALTORS®

Thursday, January 26

8:00a.m.-5:00p.m. Exhibits Open

8:30a.m.-12:00p.m. CE Course 1 - Listing Contracts

10:00a.m.-11:45a.m. Opening Session “New Year, New You” presented by Terry Watson Two lucky winners will receive a $150 WRA credit. Must be present to win.

11:45a.m.-1:00p.m. Broker Lunch (ticketed event)

1:00p.m.-4:30p.m. Course 2 - Offer to Purchase

1:15p.m.-2:45p.m. Workshops

• Killer Apps - Free or Darn Near Free• Grow Your Business on a Shoestring Budget• Paperless Transaction• Psychology of Prospecting – How to Make it

Virtually Impossible for a Prospect to Tell You No


• Still Standing – Life Support for REALTORS® in Changing Markets

• Expired Mastery – 3 “Outside the Box” Marketing Strategies That Will Have Sellers Begging You to Take Their Listing

• Surf and Turf• Create Your Own Listing Videos Using SONY

Vegas

4:15p.m.-7:00p.m. Reception and DJ

Friday, January 27

7:30a.m.-8:30a.m. Rotary Club Meeting Rotarians Meet and Greet

8:00a.m.-1:15p.m. Exhibits

8:30a.m.-11:30a.m. CE Course 3 New Developments

9:00a.m.-10:15a.m. Workshops

• What You Don’t Know Can Hurt You• Real Estate Warrior• Delivering “Knock Your Socks Off” Web Content

Using Google Analytics

10:30a.m.-11:45a.m. Workshops

• Change, Change & More Change• Home Inspection: Defect or No Defect?• Making Social Media Work For the Busy Agent

11:45a.m.-1:00p.m. CRS Lunch (Ticketed Event)

1:00p.m.-4:30p.m. CE Course 4 - Business Ethics


• Roadside Video• Safety & Self-Defense for Real Estate

Professionals• REO Buying - Diamond in the Rough or Just

Rough?

Register by Mail: WISCONSIN REALTORS® ASSOCIATION4801 Forest Run Road, Suite 201 Madison, WI 53704-7337

Register by Phone: 800.279.1972 | 608.241.2047Fax: 608.241.5168 Online Registration: www.wra.org/winterconvention


BymarCuswally

realtor® sales tip

Renting is Hazardous to Your Wallet!

The United States homeownership rate declined in 2010 for the sixth straight year, according to the

Housing Vacancy Survey, conducted by the U.S. Census Bureau in conjunction with the Current Population Survey.

The home ownership rate for 2010 was 66.9 percent, down from 67.4 percent in 2009.

By region, home ownership in 2010 was highest in the Midwest at 70.8 percent, followed by the South (69.0 percent), the Northeast (64.1 percent) and the West (61.4 percent).

As of July 29, 2011 the homeownership rate for the U.S. was 65.9 percent - a significant drop from our high of 69.1 percent in 2005.

For me, I see this as the perfect storm for educating renters about the hazards to their wallets by continuing to rent. Now is the time to own a home! Whether renting is better than buying depends on many factors, particularly how fast prices and rents rise and how long someone stays in a home. And a number of critical factors must be taken into consideration, including the costs and associated impacts of buying and renting. Let’s look at both.

Buying

Purchase costs are costs incurred at the closing for the home you are purchasing. This includes the down payment and typical closing costs.

Yearly costs are recurring monthly or yearly expenses. These include mortgage payments, condo fees or other community living fees, renovation costs, maintenance costs, property taxes and homeowners insurance. Property taxes, the interest part of the mortgage payment, and in some cases, a portion of the common charges, are tax deductible. The resulting tax savings is accounted for in each item’s totals. The mortgage payment amount increases each year for the term of the loan because the tax credit shrinks each year as the interest portion of the payments becomes smaller.

Lost opportunity costs are tracked for the initial purchase costs and for the yearly costs. The former will give you an idea of how much you could have made if you invested the down payment instead of buying your home.

Selling costs are the costs incurred when you go to closing for the home you are selling. This includes the broker’s commission and other fees, as well as the remaining principal balance that you pay to your mortgage bank. “Proceeds from home sale” is the money that you receive from the person who is buying your home. This amount is equal to the value of the home that year and is shown as a negative number since it is not something that you spend money on, but rather it is money you receive.

If your cumulative buying total is negative, it actually means you have done very well: you made enough of a profit that it not only covered the cost of your home, but also covered all yearly operating expenses.

Renting

Let’s take a look at the similar costs associated with renting. First, initial costs are the rent security deposit and, if applicable, the broker’s fee. Yearly costs are the monthly rent and the cost of renter’s insurance. And lost opportunity costs are calculated each year for both your initial costs and your yearly costs. Leaving your rental is equal to the rent security deposit, typically returned to a renter at the end of a lease.

The positive impact for us in these challenging times is the underlying value of owning real property. A most powerful statement that is part of the preamble to the Code of Ethics states, “under all is the land!” And we often here the statement, “they’re not making any more of it,” and as our population grows, the demand for housing grows exponentially with it.

With the NAR’s new program, Home Ownership Matters, a bus tours the country to promote homeownership and positive benefits that come from owning a home. The NAR also created a flyer available to download at www.realtor.org. A few highlight of the flyer are:


• Homeowners are happier and healthier and enjoy a greater feeling of control over their lives.

• Homeowners pay 80 to 90 percent of federal income taxes, contributing to federal programs that benefit all Americans.

• Every home purchased pumps $60,000 into the economy related to furniture sales, home improvements and similar items.

• Housing accounts for more than 15 percent of the national Gross Domestic Product, a key driver of our national economy.

• Owning a home is one of the best ways to build long-term wealth. Historically, a homeowner’s net worth has ranged from 31 to 46 times that of a renter.

There are even Home Ownership Matters buttons available for purchase along with a new free app called MID Calc, available at the iTunes store, for homeowners to estimate the tax-savings value of their mortgage interest deduction. This app is compatible with iPhone, iPod Touch and iPad.

Protection of the public is a primary goal for REALTORS®, and watching out for customers’ wallets is our main goal. I would not be looking out for the best interest of my clients and customers if I did not take time each day to educate those I come into contact with. Chatting about homeownership is a topic most are interested in so it’s a great topic to discuss. As rents continue to rise, the cost of buying becomes more attractive. And rental demand in many areas is growing at a fast pace. So by chatting this up, we are promoting a positive and healthy opportunity.

As the old saying goes, “buy low and sell high.” And for most of the county, our market values are at all-time lows, and as an added bonus, interest rates are also at an all-time low. In fact, today’s interest rates have not been this low since 1971! So with cheap money and housing costs highly attractive, why are people renting? Perhaps they don’t think that homeownership is affordable to them, or perhaps they do not think that they can qualify for a home. This is where REALTORS® come to the rescue.

Share your knowledge and help these renters get to a qualified mortgage professional to determine their eligibility. Get them credit counseling if needed. Help the customer and/or client set a goal to become an owner if this is not immediately possible. In today’s market, a number of programs exist to sell off current inventory. The current FHA program is a favorite of mine as well as those attractive programs by Fannie Mae and Freddie Mac. Take advantage of these fantastic offers as tomorrow will be here before these renters know it!

In my market, you can purchase a home for just about the same as renting, so what not buy? This is part of my newly formed - well, tweaked - script.

As the nation’s largest trade organization, we have the power to create a strong real estate market in which to work. Talk with others about the values of homeownership as well as the historically low interest rates, and how those factors make now the time to buy! Make a commitment to spend an hour each day sharing these facts with those that rent – and save their wallet from the hazard of renting!

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 [email protected].

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legislative

Court of appeals to decide Local pierhead ordinance Case

In the upcoming months, the Wisconsin Court of Appeals will be deciding a case involving the legality of a local pierhead

ordinance that applies retroactively to existing piers. Specifically, the court has been asked to decide whether a property owner with an existing pier must comply with the maximum length requirements set forth in the city of Lake Geneva’s pierhead ordinance. While the case has some specific facts that are likely applicable only to the parties involved, the court’s ruling could be more far-reaching, by clarifying the relationship between local pierhead ordinances and state grandfathering standards.

Background

Since 1979, Marina Bay Boat Rentals has operated a pier and marina in the city of Lake Geneva. From 1979 to 1998, the pier extended 165 feet into the waters of Lake Geneva. In 1983, the city adopted a pierhead ordinance that prohibits piers within the city from extending into Lake Geneva more than 100 feet from the shore. In 1997, the city maintained that Marina Bay had lost its grandfather status and began to demand that Marina Bay shorten its existing 165-foot pier to conform to the pierhead ordinance. Marina Bay sued to maintain its existing pier.

Marina Bay and the city entered into an agreement in which Marina Bay agreed to reduce the length of the pier by 11 feet

beginning with the 1999 boating season, and then to reduce the pier to within 100 feet beginning with the 2003 season. Marina Bay reduced the size of its pier by 11 feet in 1999, but has not reduced the pier to 100 feet. In addition, the agreement stated that if the pierhead ordinance was amended, Marina Bay would be allowed to extend its pier to the maximum length allowed by the ordinance. Finally, Marina Bay obtained a permit from the DNR to maintain the 154-foot pier with 12 boat slips.

In 2005, the city of Lake Geneva replaced its municipal pier with a new, larger pier that would be approximately 200 feet long with 40 boat slips. Because the municipal pier would have violated the city’s pierhead ordinance, the city amended the ordinance to exempt municipal piers from the ordinance requirements.

Five other private piers on Lake Geneva exceed the 100-foot length requirement in the ordinance. These piers range in size from 103 feet to 184 feet. To date, the city of Lake Geneva has not required the other pier owners to reduce the size of their piers.

The city filed a lawsuit to force Marina Bay to reduce its pier to 100 feet, as per the pierhead ordinance and stipulation. Marina Bay argued, among other things, that:

• Per the stipulation, the 2005 amendment to the ordinance, which exempted the municipal pier, allows Marina Bay

to extend its pier to 200 feet or, at a minimum, keep the current 154-foot length.

• The city has engaged in selective enforcement of the pier ordinance by allowing the other five private piers to remain in the water despite the fact that they exceed the 100-foot pierhead ordinance.

• It is unlawful for the city to exempt its own pier from the ordinance, while enforcing it against private piers.

The circuit court ruled in favor of the city, declaring that the city pier is different than private piers because it is used for a public purpose and, therefore, different regulations are warranted. The circuit court declined to address Marina Bay’s other legal arguments.

Marina Bay has appealed.

Important Legal Issues 1

1. Whether a municipal ordinance can invalidate a pier permit obtained by the DNR.

2. Whether an existing pier is grandfathered from changes to municipal ordinances if the pier meets (a) common law nonconforming structure or vested rights standards, or (b) the pier grandfathering standards found in the state statutes.

Bytomlarson


Potential Impact on Property Owners

Chapter 30 authorizes riparian owners to place a pier without a permit if the pier meets certain permit exemption standards, or with a permit obtained from the DNR if the pier exceeds the permit exemption standards. Under Wis. Stat. § 30.13, municipalities have the authority to enact pierhead ordinances, but such ordinances may not be inconsistent with the pier regulations under Chapter 30 of the Wisconsin Statutes.

Over the last ten years, the WRA has spent considerable time protecting the rights of waterfront property owners to place a pier. The regulatory framework that has been developed is intended to strike a balance between private property rights and protecting the quality of our important water resources. Moreover, the regulatory framework is intended to provide waterfront property owners with certainty as to which new and existing piers are legal with and without a permit, and which are not.

If a municipal ordinance can invalidate a permit obtained by the DNR to place a pier or override the pier grandfathering standards set forth in the statutes, thousands of property owners who have obtained permits from the DNR to place a pier, or who believe their pier is grandfathered from future pier regulations, will be uncertain whether they will be required to modify or remove their piers in the future if a municipality adopts a conflicting pierhead ordinance.

WRA Involvement

Because this case presents several legal issues that could have a significant impact on waterfront property owners throughout Wisconsin, the WRA, through the WRA Legal Action Program, will be filing an amicus brief asking the court of appeals to clarify that municipal ordinances cannot invalidate permits issued by the DNR to place a pier or conflict with the pier grandfathering standards in Chapter 30.

For more information on this case, please contact Tom Larson ([email protected]) at (608) 240-8254.

Tom Larson is Chief Lobbyist and Director of Legal and Public Affairs for the WRA

1 Marina Bay will likely raise other issues on appeal that are more specific to the facts of this case and thus don’t have a statewide significance such as whether (a) the City’s amendment to the pierhead ordinance authorizes Marina Bay to extend its pier or maintain the current length of the pier, as per the stipulation, and (b) a municipality can exempt itself from a pierhead ordinance, which effectively provides the municipality with a competitive advantage in the commercial marina business.


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U.S. Senate Race Begins

Baldwin Kagen

Tammy Baldwin, D-WI, appears to be the clear front-runner on the Democratic side. First elected to Congress in 1998, Baldwin has served her constituents in the House of Representatives for seven two-year terms. Prior to her election to the House, Baldwin served on the Dane County Board and the Wisconsin State Assembly.

Baldwin has the voter-rich Democratic bastion of Dane County as her political base, a political fact her potential opponents are well aware of. In addition, Rep. Baldwin will have very little trouble raising money for her Senate bid if history is any guide. Baldwin, if elected, would be the nation’s first openly lesbian U.S. Senator. This will ensure a healthy fundraising advantage over her potential primary opponents as national money is funneled into her campaign. Baldwin has been endorsed by the Gay & Lesbian Victory Fund and EMILY’s List, both national fundraising organizations dedicated to electing pro-choice, pioneer candidates such as Baldwin.

One other Democrat has expressed an interest in running for the Seante: former Congressman Steve Kagen from Appleton. Kagen was first elected in 2006 and re-elected in 2008 but was defeated in 2010. Congressman Ron Kind from LaCrosse had hinted at a run but decided against the race in September.

Democrats

The Republican side has two well-known candidates, former Governor Tommy Thompson and ex-Congressman Mark Neumann. Thompson served as Wisconsin Governor from January 1987 to January 2001, when he resigned to accept a cabinet position in Washington, D.C. under President George W. Bush. Former U.S. Rep. Mark Neumann represented Wisconsin’s 1st Congressional District from 1995-1999. Neumann ran for U.S. Senate against Russ Feingold in 1998, losing a close election with Feingold’s votes totaling 890,059 (50.55 percent) to Neumann’s 852,272 (48.40 percent). Neumann jumped back into the political spotlight in 2010 with his decision to run for governor in 2010, forcing a primary election he lost to current Republican Governor Scott Walker. Both Thompson and Neumann are well-known in GOP circles and both candidates will try and establish themselves as the front-runner in the primary. Thompson currently serves on a variety of health care-related boards and commissions. Neumann and his family own and operate a home building company.

Other Republican candidates looking at running for the open U.S. Senate seat are Assembly Speaker Jeff Fitzgerald from Horicon and state Sen. Frank Lasee from DePere. Fitzgerald has said he is 99 percent sure he will enter the race and Lasee is strongly considering a bid.

For now, it appears the real primary contest will be on the Republican side. Former Governor Thompson and ex-Rep. Neumann have already exchanged harsh words through their campaign staff. And the conservative Washington-based group Club for Growth criticized Thompson’s potential candidacy by ripping his record on state spending and health care reform in a television ad. Thompson’s team believes Neumann’s allies were behind the attacks. The National Club for Growth has endorsed Neumann for the U.S. Senate.

The other three Republican candidates view Thompson and Neumann as officeholders from the past and hope that voters will be ready to move on to younger, more contemporary choices such as themselves. Fitzgerald and Lasee, in particular, have thanked both Thompson and Neumann for their past service, and framed the election in 2012 as one that could put “today’s” GOP in competition with “yesterday’s” Republican Party.

The decision by former Sen. Russ Feingold not to run for the seat of retiring Democratic Senator Herb Kohl virtually guarantees this race should be competitive all the way to November 2012.

Joe Murray is Director of Political and Governmental Affairs for the WRA.

Thompson Neumann Fitzgerald Lassee

Republicans

By January 2013, U.S. Senator Ron Johnson, in office only two years after his successful run against Russ Feingold in 2010, will be Wisconsin’s “senior senator. ” Democratic Senator Herb Kohl decided to retire in 2012 after 24 years in the U.S. Senate, thus elevating freshman Johnson into the senior position.

With Kohl’s retirement, a number of candidates are considering bids or have already announced they are running in what could become one of the hottest Senate races in the country. Political prognosticator Larry J. Saboto, a political scientist with the University of Virginia Center for Politics who publishes “Sabato’s Crystal Ball,” has placed the emerging U.S. Senate race in Wisconsin in the “toss-up” category. Here’s a quick rundown of candidates already in the race or seriously looking at it.

ByjoEmurray


Wisconsin property Values decline – again

BymiChaElthEo

It will likely surprise no one that property values in Wisconsin declined in 2011 for the third year in a row, according to a new

report by the state Department of Revenue (DOR). But diagnosing the differences between property types and location provides some interesting details about Wisconsin’s real estate market and its impact on the state and local economies.

According to a detailed analysis of the DOR numbers by the respected Wisconsin Taxpayers Alliance (WTA), the value of all taxable property in Wisconsin fell 1.8 percent to a total of $487 billion. By comparison, in 2008, the total property value was $514 billion, 5.4 percent higher than today.

Looking just at real property, (ie: minus personal property,) values dropped 1.7 percent since last year from a total of $484 billion to $475.5 billion. Personal property values (ie: minus real property,) fell 1.1 percent from $11.9 billion to $11.4 billion.

Home values constitute for about 71 percent of the total equalized value in the state and thus drive the statewide numbers. The DOR reports that the value of existing homes dropped 2.3 percent, after falling 2.3 percent and 3.9 percent in the preceding two years, according to the WTA analysis. New construction of residential homes was only 0.6 percent of the total residential values, down from an average of 2.5 percent between 1989 and 2007, demonstrating continued weakness in the home building industry. Combined, all residential real property in the state fell 1.6 percent, from $353.1 billion to $347.5 billion.

Other forms of property didn’t fare much better, with a 2.3 percent decline in commercial property values, a 3.4 percent decline in agricultural property, a 2.6 percent decline in agricultural forest property and a 5.4 percent decline in forest property values. However manufacturing property actually maintained its value and undeveloped land actually increased in value 1.2 percent.

Watching new construction carefully

Local officials are watching one statistic very carefully: the value of new construction in their communities. Since 2005, state law has placed a cap on all municipal and county levies, limiting increases to the greater of net new construction value or a specified percentage ranging from 2.0 to 3.86 percent. In the new state budget, approved in August, that cap is now zero, making new construction the only way local governments can increase their tax levy short of voters approving an increase by referendum.

According to the WTA analysis, 16 of Wisconsin’s 72 counties saw their equalized value increase, albeit just slightly in most cases. The largest increase came in one of the smallest counties, Pepin, with an increase of 3.1 percent. 21 counties saw their values decrease by more than 2 percent, led by Juneau and Polk, where values dropped more than 6 percent. Counties that saw new construction values increase were Monroe, Jackson, Trempealeau and LaCrosse, which all had value increases around 1 percent. Milwaukee and Racine, two of the state’s largest counties, were among the slowest for new construction rates.

Unlike counties, some municipalities will be facing property tax freezes as a result of the new law and no new construction. According to the WTA analysis, 10 cities, 54 villages and 58 towns have had no new construction value increases or even decreases. Razing buildings can result in a negative new construction number. Another 661 municipalities will have allowable levy increases of less than 0.5 percent.

This is bad news for local governments however is good news for property taxpayers. In the past, local tax levies could be increased to make up for the decrease in property values, helping local government revenues but hurting property owner pocketbooks. Hopefully everyone wins soon when Wisconsin real estate markets rebound.

Michael Theo is President of the WRA.

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October 2011 - Wisconsin Real Estate Magazine

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