Wisconsin Salesperson Real Estate Exam Study Guide

Wisconsin Salesperson Real Estate Exam Study Guide I. Ownership and Transfer of Property A. Property Ownership (6 Questions): - Encumbrances: Legal restrictions or claims on property, including: - Easements: Rights for others to use the land (e.g., utility companies). - Liens: Claims due to unpaid debts (e.g., mortgage, tax lien). - Encroachments: Unauthorized physical intrusion (e.g., neighbor's shed). - Property Taxes and Special Assessments: Public charges tied to property value or improvements. - Real vs. Personal Property: - Real Property: Land and anything permanently attached to it. - Personal Property (Chattel): Movable items not fixed to land. - Types of Ownership: - Joint Tenancy: Equal ownership with right of survivorship. - Tenancy in Common: No survivorship; can own unequal shares. - Marital Property: Property acquired during marriage, presumed jointly owned in Wisconsin. B. Transfer of Property (8 Questions): - Title Insurance: Protects buyers/lenders from defects in title. - Preliminary Report: Lists encumbrances before closing. - Gap Insurance: Covers the period between closing and recording. - Types of Deeds: - Warranty Deed: Guarantees clear title. - Quit Claim Deed: Transfers interest without warranty. - Personal Representative's Deed: From an estate representative. - Deeds, Warranties, Title Defects: - Deed: Legal document transferring ownership. - Security Interest: Lender's legal claim (e.g., mortgage). - Bill of Sale: Transfers personal property. - Recording Titles: Official registration with the county to ensure public notice. II. Land Use Controls and Regulations - Private Land Use Controls: - Restrictions or conditions in deeds (e.g., HOA rules). - Public Controls: Wisconsin Salesperson Real Estate Exam Study Guide - Zoning Codes: Define land use (residential, commercial). - Conditional Use: Requires approval. - Nonconforming Use: Legal pre-existing use. - Variance: Permission to deviate from zoning. - Setbacks: Minimum distance from property boundaries. - PUDs (Planned Unit Developments): Mixed residential, commercial developments with flexible zoning. III. Valuing and Financing Property; Calculations A. Valuation and Market Analysis: - CMA (Comparative Market Analysis): Informal valuation by licensee. - Types of Value: - Market Value: Most probable selling price. - Appraised Value: Estimate by licensed appraiser. - Assessed Value: Used for property tax calculation. - Principles of Value: Substitution, conformity, supply & demand, anticipation. B. Financing: - Loan Types: Fixed, adjustable (ARM), balloon mortgages. - Financial Terms: - LTV (Loan-to-Value): Loan ÷ property value. - Points: Prepaid interest. - PMI (Private Mortgage Insurance): Required for high LTV loans. - Legal Regulations: - RESPA: No kickbacks in settlement process. - Regulation Z: Truth-in-lending disclosures (APR). - TRID: Combines Loan Estimate and Closing Disclosure. - Lending Sources: Banks, credit unions, seller financing, land contracts. C. Mathematics: - Prorations: Splitting costs (e.g., taxes) at closing. - Property Tax: Assessed value × mill rate ÷ 1000. - LTV Calculations and Transfer Fee Calculations. IV. Agency A. Laws of Agency: - Types of Agents: Buyer, seller, dual, designated. - Client vs. Customer: - Client: Full fiduciary duties (loyalty, obedience, disclosure, confidentiality, accounting, reasonable care). Wisconsin Salesperson Real Estate Exam Study Guide - Customer: Honesty and disclosure of material facts. - Creation of Agency: Express agreement or implication. - Termination: Fulfillment, mutual agreement, expiration, or breach. B. Agency Contracts: - WB-1: Residential Listing. - WB-4: Condominium Listing. - WB-36: Buyer Agency Agreement. V. Disclosures - Environmental: Disclosure of hazards (e.g., lead, asbestos, underground tanks). - Real Estate Condition Report: Required for most residential sales. - Condo Disclosures: Budget, bylaws, common areas. - Federal Lead-Based Paint Disclosure: Required for homes built before 1978. - Other Disclosure Obligations: Material adverse facts, sex offender registry notice. VI. Contract Law and Approved Forms A. Contracts: - Use of State-Approved Forms: Mandatory in WI. - Copies: Must be given to all parties. - Record Retention: Minimum 2 years. B. Offers to Purchase: - WB-11: Residential Offer. - WB-13: Vacant Land Offer. - WB-14: Condo Offer. - WB-40: Amendment. - WB-41: Notice. - WB-44: Counter-Offer. - WB-46: Multiple Counter-Proposal. VII. Business Ethics - Ethical Conduct: - Truthful advertising. - Avoiding conflicts of interest. - Maintaining confidentiality and integrity. - Real Estate Practice Standards: Follow legal and moral obligations. Wisconsin Salesperson Real Estate Exam Study Guide VIII. Fair Housing - Federal Protections: Race, color, religion, sex, national origin, disability, familial status. - Wisconsin Protections: Adds sexual orientation, marital status, lawful income, age, ancestry. - ADA: Accessibility and accommodations for individuals with disabilities. IX. Federal Antitrust Law - Prohibited Practices: - Price Fixing: Competitors setting prices together. - Group Boycotts: Colluding to exclude competitors. X. Miscellaneous - Trust Accounts: No mixing of personal and client funds. - Fee Splitting: Only with licensed professionals. - Firm Responsibilities: Supervision of licensees, proper advertising, compliance. - Leases: Must use approved forms and comply with state law. - Rental Practices: Fair housing adherence and proper disclosures.