Forms are a crucial part of a real estate transaction. Because Wisconsin licensees are required to use state-approved forms, it is important for licensees to be aware of any updates to the WB forms.
Mandatory use date
What is a mandatory use date? When do licensees need to use the updated forms?
The mandatory use date is when licensees must use the updated WB forms. The mandatory use date for the listing contracts, buyer agency and tenant representation agreements, and all the offers to purchase is January 1, 2024.
What happens if a licensee uses an old version of a WB form?
Wis. Admin. Code § REEB 16.06(7) provides that licensees “shall use the latest approved version of a board-approved form.” Licensees who fail to use the most recent version of the WB forms after the mandatory use date may face discipline from the Department of Safety and Professional Services.
Revisions
Which forms were changed?
Listing contracts
- WB-1 Residential Listing Contract — Exclusive Right to Sell
- WB-2 Farm Listing Contract — Exclusive Right to Sell
- WB-3 Vacant Land Listing Contract — Exclusive Right to Sell
- WB-4 Residential Condominium Listing Contract — Exclusive Right to Sell
- WB-5 Commercial Listing Contract — Exclusive Right to Sell
- WB-6 Business Listing Contract — Exclusive Right to Sell
- WB-37 Residential Listing Contract — Exclusive Right to Rent
Buyer agency agreements
- WB-36 Buyer Agency Agreement
- WB-38 Commercial Buyer Agency/Tenant Representation Agreement
Tenant representation agreement
- WB-39 Tenant Representation Agreement
Offers to purchase
The offers to purchase were revised to include the wire fraud notice.
- WB-11 Residential Offer to Purchase
- WB-12 Farm Offer to Purchase
- WB-13 Vacant Land Offer to Purchase
- WB-14 Residential Condominium Offer to Purchase
- WB-15 Commercial Offer to Purchase
- WB-16 Offer to Purchase — Business With Real Estate Interest
- WB-17 Offer to Purchase — Business Without Real Estate Interest
- WB-24 Option to Purchase
- WB-47 Amendment to Buyer Agency/Tenant Representation Agreement
What was changed in the forms?
The listing contracts as well as the buyer agency and tenant representation agreements were updated to include the following:
- Greater consumer transparency language regarding commission.
- Language encouraging alternative dispute resolution.
- A note highlighting the two-year limitation on liability.
- A wire fraud notice.
Additionally, all the offers to purchase now include a wire fraud notice before the signature lines to raise awareness. None of the other provisions in the offers to purchase were moved or modified, so all other sections of the offer forms remain the same.
What commission language was modified?
The Commission section of the forms was revised to further improve consumer transparency. For example, the listing contracts were modified as follows:
COMMISSION The Seller and the Firm agree the Firm’s commission shall be _________________.
The buyer agency and tenant representation agreements were modified in the same manner but refer to the Buyer and Tenant, respectively.
The revised forms indicate that a variety of commission models and business models exist. To that effect, the Compensation to Others section of the listing contracts was modified as follows:
COMPENSATION TO OTHERS The Firm offers the following commission to cooperating firms working with buyers such as subagents and buyer’s firms: _________________. (Exceptions if any): _________________. There is no standard market commission rate. Commissions and types of service may vary by firm and are negotiable based on the firm you hire. Compensation to others may be offered to firms acting as subagents and firms representing buyers as incentive to participate in the sale of firms’ listings through multiple listing services or in compensation agreements.
The Payment by Owner or Owner’s Agent section in the buyer agency and tenant representation agreements was modified to further explain that when a firm seeks payment of commission from the owner’s agent, that means seeking payment from the listing firm through the multiple listing service or compensation agreements.
PAYMENT BY OWNER OR OWNER’S AGENT: The Firm is hereby authorized to seek payment of commission from the owner (e.g., seller) or the owner’s agent (e.g., listing firm through the multiple listing service or compensation agreements) provided that all parties to the transaction give prior written consent. Buyer shall pay the Firm’s compensation, reduced by any amounts the Firm receives from the owner or the owner’s agent.
Because there is no Compensation to Others section in the buyer agency and tenant representation agreements, the buyer agency and tenant representation agreements were modified to enhance transparency to include the following:
There is no standard market commission rate. Commissions and types of service may vary by firm and are negotiable based on the firm you hire.
The remaining language in these sections of the forms remains the same.
Do I still need to use the Addendum C?
The WRA-ADDC Addendum C — Commission Transparency was created to create greater transparency with consumers about commission charges. The addendum is no longer needed because the updated WB forms include the commission transparency language.
What language was modified in the Dispute Resolution section?
The new language in this section provides that the parties may consider alternative dispute resolution instead of pursuing court action. Mediation and arbitration are strongly encouraged before court proceedings, but neither is required.
DISPUTE RESOLUTION The Parties understand that if there is a dispute about this Listing or an alleged breach, and the Parties cannot resolve the dispute by mutual agreement, the Parties may consider alternative dispute resolution instead of judicial resolution in court. Alternative dispute resolution may include mediation and binding arbitration. Should the Parties desire to submit any potential dispute to alternative dispute resolution, it is recommended that the Parties add such in Additional Provisions or in an Addendum.
To bring further awareness to the two-year time frame for litigation against real estate firms and agents, revisions were made to the listing contracts as well as the buyer agency and tenant representation agreements to include a note highlighting Wis. Stat. § 452.142. The note aims to educate consumers and licensees about the two-year time frame.
NOTE: Section 452.142, Stats., places a time limit on the commencement of legal actions arising out of this Agreement.
What does the wire fraud warning say?
The warning educates consumers to only wire funds for a transaction if they have obtained independent verification from a trustworthy, known source that the wire transfer instructions received are indeed correct.
The warning is in a box and indented to further emphasize the importance of the warning. Additionally, the warning is placed in an easy-to-find location right before the signature lines.
Resources
Where can I get the updated WB forms?
WB forms are available in Transactions (zipForm Edition) and the WRA’s PDF Forms Library.
Where can I learn more about the forms and the forms revisions process?
You can read more about updates to the forms at the following: