As a Wisconsin real estate licensee during the height of the short sale and foreclosure boom, you likely tried to practice real estate lawfully while simultaneously attempting to understand the complexities that are short sales and foreclosures. Your hurdles included determining how each lender approval process worked, how an asset management company functioned as to a specific property, how you were expected to submit forms for presentation, and determine with whom you were to speak as both the listing agent and the cooperating agent. And these are just some of the examples of what you were dealing with as you made your way through the day during those unique and highly complex times.

Now, I am not saying that life with short sales and foreclosures is gone forever, as I know a number of you still deal with them either due to your marketplace or the nature of the focus of your practice; and may continue to do so for a while longer. However, for the majority of you, the pendulum has finally slowed and it’s back to business. You are in somewhat familiar ground, and the new normal is here: negotiating deals for your consumers, waiting for appraisals, and holding your breath as the financing underwriting comes through. Some parts of the transaction seem familiar and pre-boom, while others are most likely forever changed, as are you. 

During the distressed property boom, agents were dealing with some of the most unique circumstances in real estate transactions, and as a byproduct of assisting consumers in these transactions, best practices may have suffered a bit.The following is not an all-inclusive list, but rather some helpful reminders as you come out of the haze to keep things on track in your professional practices. 

1. There is a difference between acceptance vs. binding acceptance. 

Lines 23-26 of the WB-11 Residential Offer to Purchase (WB-11) define “acceptance” as occurring when all buyers and sellers have signed the offer. And lines 27-30 of the WB-11 define “binding acceptance” as being the delivery of the accepted offer. Once binding acceptance occurs, the buyer and seller have a duty to employ good faith and due diligence to complete the transaction.

When a cooperating broker is informed that the buyer’s offer was accepted, and there is no written documentation of such on the offer to purchase or other written evidence, the buyer is not in a contract. The buyer does not have a full appreciation that the warm fuzzy feeling is an illusion — the buyer is not any closer to contractually owning that home than the moment they submitted the offer. The buyer should be told candidly about the reality of verbal acceptance; and while it may seem promising, the parties have not entered into a contract. See tip No. 5 in this article for more information about the importance of getting things in writing.

2. Remember to dot the I’s and cross the T’s. 

You are responsible for completing the contract on behalf of your customer or client. They rely on you to know how to complete the forms to accomplish their intent and to reduce exposure to liability in that capacity. Review the document before you send/provide it to them for signature. Also, always remember that it’s the agreement of the parties — not yours as the agent. The consumers must be consulted as to any contractual change, and if they have legal questions, send them to an attorney.

3. You are required to present any written proposal, such as an offer, option, counteroffer, amendment, or a cancellation agreement and mutual release. 

As indicated in Wis. Admin. Code § REEB 24.13(1) & (2)(a), listing brokers must present all offers to purchase and permit access to listed property for showing purposes to all buyers unless the terms of the offer or buyer’s access would be contrary to specific instructions by the seller. This is a decision to be made by the seller client and documented in the listing contract. 

4. Confidentiality is owed to all parties. 

As REALTORS^®, you have the duty to preserve confidential information under Wis. Stat. §452.133(1)(d) and Standard of Practice 1-9 of the REALTOR^® Code of Ethics. Wisconsin Administrative Code § REEB 24.12(1) disallows a licensee from disclosing any of the terms of one prospective buyer’s written proposal to any other prospective buyer or any person with the intent that information would be disclosed to any other prospective buyer. 

5. Put all agreements in writing. 

In Wisconsin, a verbal contract for the conveyance of an interest in land is void unless there is a writing that meets the requirements of Wisconsin Statute Chapter 706. Wis. Stat. §§ 706.02(1)(d) & (g) indicates that the offer is invalid until it is signed by the grantors and delivered. 

Verbal negotiations are lawful, but if the proposal is in substance a counteroffer, it must be in writing. In addition to Wis. Stat. Ch. § 706.02, Wis. Admin. Code § REEB 24.08 requires brokers to put all agreements in writing. A licensee shall put in writing all listing contracts, guaranteed sales agreements, buyer agency agreements, offers to purchase, property management agreements, option contracts, financial obligations and any other commitments regarding transactions, expressing the exact agreement of the parties unless the writing is completed by the parties or their attorneys or is outside the scope of the licensee’s authority under Wis. Admin. Code § REEB 16.

Until the parties have a written, signed and delivered contract, there is not an accepted offer, according to Wis. Stat. § 706.02. Despite the verbal negotiations and apparent “agreement” on terms and conditions, a binding agreement between the buyer and the seller has not materialized because there is no written agreement between the parties. 

6. Professional etiquette is imperative. 

If you believe in karma, this tip is one to pay attention to. While the Code of Ethics and Standards of Practice of the National Association of REALTORS^® (NAR) establishes objective, enforceable, ethical standards governing the professional conduct of REALTORS^®, it does not address issues of courtesy or etiquette. As the statements goes, it takes years to build up trust, and only seconds to destroy it. The Professional Conduct Working Group of the Professional Standards Committee of NAR created a list, known as the Pathways to Professionalism, that includes professional courtesy and etiquette not addressed in the Code of Ethics. Watch NAR’s 2013 video and companion brochure titled “A Pathway to Professionalism: Respect Starts Here” at www.realtor.org/professionalism.

Cori Lamont is Director of Regulatory Affairs for the WRA.