Wisconsin Offer to Purchase Simplified
Often we tend to read what we sign. In the process of buying a home in Milwaukee or surrounding areas that means reading about 9 pages. Most of it is not easy to understand at the first glance. Before you keep reading, I am not a lawyer nor a financial adviser and this is for informational purposes only. Every term written in this article have more ramifications to what you will be reading. Please call our office or consult with your real estate agent or attorney. My goal is to give you a better understanding of the offer hopefully before you sign!
I recently came across a client that found me (Milwaukee Bilingual Realtor Pedro Rivera) online searching on Google. She wanted to buy a home in the North West Side of Milwaukee. She loved the first home we saw and decided to write an offer. That was when I realize that there was not a lot of information online regarding the documents that are part of the process of buying real estate in Milwaukee and surrounding areas (Racine, Kenosha, Waukesha).
The Wisconsin Offer to Purchase is provided to REALTORS® by the Wisconsin Realtors Association. The Wisconsin Offer to Purchase is a contract between you and the seller. Your REALTOR® will be activating and filling contingencies which need to be met in order for this contract to remain valid and you can close/settle on the property you are buying..
The following are the different blanks meanings, contingencies, and definitions of pre-written terms of the Wisconsin Offer to Purchase (the offer).
Lines 1-2 | The Role of the Agent Drafting the Offer
In a real estate transaction in Wisconsin there are two parties: the seller and the buyer. Line 1 indicates for whom the real estate agent drafting the offer is working. The real estate agent may work for:
- The seller (agent of the seller/listing broker)
- For the listing broker (agent of the seller/listing broker)
- For the buyer (agent of the buyer)
- Or for both the seller and the buyer (agent of the buyer and seller)
The party the real estate agent is working for is known as the client. If the broker is working for one party but is also working with and helping the other party, the second party is known as a customer. Clients and customers have different rights. These differences are explained to clients in the listing contract or in the buyer agency agreement. Please ask your agent for clarification if you have a pending transaction and don’t know which side you are in.[ss_button type=”orange” link=”tel:4147126275″ title=”Milwaukee’s Bilingual REALTOR®”]Call Pedro Today @ 414-712-6275[/ss_button]
Lines 3-22 | General Provisions
In this section is where the real estate agent (if you need a Bilingual Real Estate Agent in Milwaukee click here.) input the buyer name, property full address, purchase price, earnest money, and what’s included and not included in purchase price.
Lines 23-30 | Acceptance / Binding Acceptance
When all of the buyers and sellers have signed/executed the offer, it is “accepted.” This is also know as an “executed offer”. The latest date that a party signed is the date of acceptance. Almost all deadlines in the contract will run from this date. The offer becomes a legally binding contract if the seller delivers the offer back to the buyer by the deadline for binding acceptance stated in the offer.
Lines 31-33 | Optional Provisions
This is basically the legal part that states that if contingencies are not marked with an “X” they are not part of the offer. Everything marked with an “X” WILL BE part of the offer. Real estate agents usually leave in blank anything that will not be part of the offer.[ss_button type=”orange” link=”http://myteamofrealtors.com/team-member/realtor-pedro-j-rivera/” title=”Spanish REALTOR in Milwaukee, Oak Creek, Cudahy and Surrounding Areas”]Bilingual REALTOR in Oak Creek, Milwaukee, Cudahy, New Berlin, Franklin, and surrounding areas![/ss_button]
Lines 34-54 | Delivery of Documents
This is where real estate agents specify the way in which documents will be delivered.
Lines 55-56 Personal Delivery / Actual Receipt
This section explains the delivery of document and notices.
Lines 57-60 | Occupancy
Unless there are tenants, occupancy will be given to buyer at the time of closing.
Lines 61- 115 | Definitions
These are the definitions for all the terms previous to this page.
Lines 116-117 | Closing
Transaction should close no later than this date. This date can be later changed upon agreement of all parties.
Lines 118-139 | Closing Prorations
This is a section with a lot of possible scenarios. Basically it states that the seller is responsible for any property bill until the day of closing. However, most title companies will give the buyer credit for these and the new buyer will be responsible for the whole entire year.[ss_button type=”orange” link=”http://myteamofrealtors.com/team-member/realtor-pedro-j-rivera/” title=”First Time Home Owner in Milwaukee, Oak Creek, Franklin, New Berlin, Cudahy”]First Time Home Owner REALTOR[/ss_button]
Lines 140-143 | Leased Properties
If property will be occupied by tenants after closing the buyer will assume landlord rights and responsibilities at the time of closing. This is where we ask to review any oral or written contracts.
Lines 144-147 | Rental Weatherization
In Wisconsin the law require residential properties that are tenant occupied to meet “weatherization standards”. There is more to this. However, the rule of thumb is that you as a buyer are exempt if you will occupy the property within 60 days of closing.
Lines 148-158 | Real Estate Condition Report
Also know as “the condition report” is a written disclosure by the seller regarding the property conditions and other matters that the seller knows about and will adversely affect the property.
Home inspection from an expert in the Milwaukee or surrounding areas is highly recommended.
Lines 159-164 | Property COndition Representations
In Wisconsin, the seller of a residence is asked to disclose what the seller knows about problems related to the property. These representations are not warranties. The representations are made in two places: 1. The seller’s Real Estate Condition Report 2. Lines 159-164 of offer to purchase.
Lines 165-172 | Additional Provisions/Contingencies
The offer form is long, but it does not include all of the contract language that the buyer and seller may need in a transaction. The blank lines can be used to add a contingency or other language as needed.
Lines 174-181 | Definitions Continued
These are definitions of previous terms.
Lines 197-201 | Property Dimensions and Surveys
This section basically states that buyer should do their own measurements and don’t assume any existing measurements are accurate.
Lines 202-205 | Buyer’s Pre-Closing Walk-Through
Regardless of any inspections or tests done, buyers have the right to see the property once more within 3 days of the closing date. There are two reasons why this takes place: 1. To be sure property is in the same conditions it was when they submitted the offer. 2. To make sure any defects that the seller agreed to cured were repaired.[ss_button type=”orange” link=”http://myteamofrealtors.com/team-member/realtor-pedro-j-rivera/” title=”Spanish REALTOR in Milwaukee, Oak Creek, Cudahy and Surrounding Areas”]REALTOR® en Español en Milwaukee, Oak Creek, Cudahy, Franklin, y áreas cercanas![/ss_button]
Lines 206-215 | Property Damage Between Acceptance and Closing
If the property is damaged by fire, a tornado or other causes after the offer is accepted, the seller should immediately obtain an estimate of the cost to repair the damage. If this cost is 5 percent of the sale price or less, the seller must repair the dam-age and restore the property to the condition it was in on the day of the offer. Before the closing the seller must provide lien waivers, if applicable, for any repairs or restoration.
If the damage exceeds 5 percent of the sale price, the seller must notify the buyer of this fact. The buyer may then decide to proceed with the offer or to rescind (cancel) it. If the buyer decides to proceed, the buyer is entitled to the seller’s insurance proceeds, if any, plus a credit against the purchase price equal to the seller’s insurance deductible. The buyer will want to find out whether the seller has insurance and how much the insurance company is willing to pay before proceeding with an offer for a property that has been damaged.
Lines 217-263 | Financial Contingency
Most buyers include a financing contingency providing that they legally do not have to close if they cannot obtain a loan commitment. A loan commitment is an agreement by a lender to lend money. There is more to this.
Lines 264-271 | Appraisal Contigency
The Appraisal Contingency may be used when a buyer requires the property to appraise at or above the purchase price, whether or not the buyer is using a Financing Contingency. Including an Appraisal Contingency in an offer to purchase will protect the buyer against becoming contractually obligated to purchase a property that does not appraise at or above the purchase price, causing the lender to not fund the loan.
Lines 272-277 | Distribution of Information
The Distribution of Information provisions provide written authorization from the parties to allow the real estate agents to provide certain information relating to the transaction to persons other than the parties.
Lines 278-297 | Default
All parties have the obligation to act diligently and in good faith to carry out all of the provisions in the contract. If a party does not perform his or her obligations under the contract, the other party may consider this to be a breach of contract or a default. Consult with your real estate agent or attorney if this has happened.
Lines 298-300 | Entire Contract
In this section the parties agree that everything that has been represented or agreed to is stated in the contract.
Lines 301-303 | Notice About Sex Offender Registry
Milwaukee Real Estate Agents cannot answer any questions about the sex offender registry. Your Wisconsin licensee (REALTOR®) can give you contact information to the Wisconsin Sex Offender Registry.
Lines 304-311 | Closing of Buyer’s Property Contingency
Unless you need to sell your home to buy a new one, this should not concern you. This basically means that The Offer is contingent upon you selling your home.. If you are selling your home in Milwaukee, Waukesha, Racine, or anywhere in Wisconsin please consult your lender is this would help you.
Lines 312-317 | Secondary Offer
While looking for a home in Milwaukee, you may find properties that you love but are “Under Contract” or have an “Accepted Offer”. You can still put a secondary offer. This means that if something happens to that offer and you haven’t buy a home yet; your offer becomes primary giving you a chance to acquire the property once all your contingencies are met.
Lines 318-324 | Time is of the Essence
Between acceptance and closing there are many things that must happen by a deadline stated in the offer. The deadline may be a calendar date (such as closing) or a certain num-ber of days from another event (such as acceptance). Once an offer has been accepted, it is wise to make a list of all the deadlines that must be met. Do not assume that missing deadlines will be allowed. Failure to meet a deadline may entitle the other party to terminate the offer.
Lines 325-368 | Title Evidence
Title evidence is a very difficult area to understand. If a title problem arises, expert advice should be obtained. Representatives of the title insurance company can be helpful in explaining title problems, but only an attorney can give legal advice. I will elaborate on another article.
Lines 369-394 | Earnest Money
This section deals primarily with what will happen to the ear-nest money if the transaction does not close and the parties fail to agree on how the money should be disbursed. The contract assumes that a real estate broker is holding the earnest money in the broker’s trust account. I will elaborate on another article.
Lines 395-409 | Inspections and Testing
This section sets the ground rules for any inspections and testing. The buyer may only have an inspection or test if there is a contingency included in the offer. The buyer must decide what tests or inspections are appropriate for the property.
Lines 410-433 | Inspection Contingency
The Inspection Contingency provides for three types of inspec tions: a home inspection, component inspections and follow-up inspections recommended in the home inspection or component inspection reports (basement contractor to look at cracks). First, the buyer may request a home inspection by a Wisconsin-registered home inspector. Wisconsin-registered home inspectors are required by law to have a certain level of expertise and to conduct their inspections and make their reports according to certain rules. If such an inspector notes a defect, there is a level of reliability in his or her conclusion. There are more ramifications to this and I will explain on another article. For now, you need to understand that this is where your Spanish / Bilingual Real Estate Agent in Milwaukee or any part of Wisconsin should specify if there will be ans inspection or not.
Line 434 | Addenda
Sometimes the offer to purchase does not contain everything needed for a specific transaction. An addendum may be used to add additional contingencies or agreements between the buyer and seller.
Lines 435-442 | Additional Provisions/Contingencies
The offer form is long, but it does not include all of the contract language that the buyer and seller may need in a transaction. The blank lines can be used to add a contingency or other language as needed. Any offer language that does not meet a party’s needs can be changed or stricken during drafting.
This is a very very long article explaining The Offer to Purchase in the state of Wisconsin. Our Spanish Bilingual Real Estate agents are prepared to help you when you are. If you are looking for a Bilingual / Spanish Realtor in Milwaukee, Waukesha, Racine, or surrounding areas contact us![ss_button type=”orange” link=”http://myteamofrealtors.com/team-member/realtor-pedro-j-rivera/” title=”Bilingual REALTOR in Milwaukee, Oak Creek, Cudahy and Surrounding Areas”]Do you have questions? Contact REALTOR® Pedro Rivera Today![/ss_button]