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1. I'm selling my house. What will my closing costs be?
2. Do I really need a written offer?
3. What is earnest money?
4. What if I change my mind and don't want to buy?
5. What are contingencies?
6. Is a Property Condition Report important?
7. What is an abstract, or title insurance?
8. I have to sell my house to buy the new house. What should I do?
9. I need a loan. What should I tell the seller?
10. What if I can't get financing?
11. What is a Land Contract?
12. What is the Rental Weatherization Code?
13. I'm going to buy a house in the country. What should I do about inspections?
14. Do I need a survey?
15. I am selling my house. Do I need a real estate broker or should I try to sell it myself?
16. I want to buy a house and there's no real estate broker involved. What's the next step?
17. What is a homeowners warranty policy that comes with the house? Is it worth it?
18. There is something wrong that needs correcting. Should I close?
19. Can I stay after closing to move, or can I move in early?
20. Do I need an attorney?
21. I'm selling my house. Does the attorney have to go to the closing?
22. I'm buying a house. Does the attorney have to go to the closing?
23. Is buying a business just like buying a house?

1. I'm selling my house. What will my closing costs be?

Closing costs for the typical sale include:

• The seller's cost of title insurance, which is based upon the sale price;
• Real estate transfer tax, which is paid to the county and is $3.00 per $1,000.00 of the sale price;
• Recording fees;
• Broker's commissions, if any;
• Postponed real estate taxes, if any;
• Preparation costs for the deed and transfer tax return;
• Attorney's fees, if any;
• Proration of real estate taxes from January 1 to the day before closing. This is calculated by dividing last year's taxes by 365, and multiplying by the number of days between January 1 and the day before closing.

If the seller has an existing mortgage oerty being sold, or any other liens against the real estate, these will have to be paid at closing also.

2. Do I really need a written offer?

Wisconsin law requires that offers to buy real estate be in writing, otherwise the offer is not enforceable. An oral agreement, therefore, is said to violate the Statute of Frauds. So, if you don't have a written offer, you cannot sue the buyer to enforce the oral contract.

3. What is earnest money?

Earnest money is the money deposited with the real estate broker, seller's attorney, or the seller, to bind the offer to purchase and to insure the buyer is serious. Earnest money for most transactions is usually paid by check and is usually $1,000.00 or $2,000.00. Sometimes earnest money is paid in installments to make it convenient for the buyer. On occasion, if a buyer wants to cancel an offer, a buyer will offer the seller the earnest money as liquidated damages. If so offered, a seller is not required to accept the earnest money to cancel an offer.

4. What if I change my mind and don't want to buy?

You can be forced to buy if you change your mind and don't have a reason to cancel the deal. Upon the signing of an offer, you have a binding contract, which cannot be unilaterally cancelled. If this happens, you will have to negotiate with the seller a cancellation agreement, which may involve paying damages to the seller.

5. What are contingencies?

They are the provisions in an offer that set out the reasons why, if they cannot be satisfied, a buyer does not have to buy or a seller does not have to sell. If a contingency is not satisfied, it will result in the contract being void and the earnest money returned to the buyer without a penalty.

6. Is a Property Condition Report important?

A Property Condition Report is important, but it is often misunderstood. Wisconsin law requires that the seller of residential real estate give the prospective buyer a Property Condition Report. This report is a two-page document that the seller fills out, which lists the seller's knowledge of defects or problem conditions in the home. The purpose of the Property Condition Report is to tell the buyer of conditions known to the seller. The reason it is misunderstood is that the law gives the buyer the right to object to the condition and cancel the purchase. This must be done within the time limit imposed by the statute. If a buyer doesn't cancel the offer or goes ahead and closes, the buyer loses his/her right to cancel and is deemed to have waived the right to object to the property's condition.

7. What is an abstract, or title insurance?

These are the two forms of writing (known collectively as title evidence) which tell you who owns the real estate and what liens exist against the real estate. Nowadays, the most prevalent form of title evidence is title insurance. Title insurance is issued by an insurance company licensed by the state. The insurance company commits to issuing an insurance policy which guarantees you as the record owner, provided the steps outlined in the title insurance commitment are followed. If the title insurance company makes a mistake, they will pay to correct it. Typically, title insurance is paid for by the seller, except buyers pay to extend coverage to their lender. Title insurance usually costs between $4.00 and $6.00 per $1,000.00 of the sale price.

An abstract is a compiled listing, in a book-like document, of the recorded documents in the county Register of Deeds' office. It must be read by a person trained to do so (an attorney), who will then issue a written opinion stating who is the record owner and what must be done to provide clear title. The cost of extending an abstract is typically less than $250.00, paid for by the seller. The cost of having an attorney read the abstract and write the opinion is the buyer's expense.

Title insurance is the preference of most lenders. It has become the standard in this day and age of banks "selling" their mortgages to large mortgage lenders on the secondary market. Some banks, under some circumstances, still accept abstracts and opinions, but such circumstances are few and far between.

8. I have to sell my house to buy the new house. What should I do?

The offer should contain a contingency which provides that the buyer does not have to close if the buyer's current home does not sell. The buyer should make certain the contingency states: (1) a minimum sale price that the buyer must receive; and (2) that the buyer's sale must close by a date specified. The seller should make certain when faced with a sale of buyer's house contingency that the seller may still continue to market seller's house and accept a secondary offer, giving the original buyer 72 hours to remove the contingency or lose the original buyer's first offer position.

9. I need a loan. What should I tell the seller?

Place in your offer a financing contingency. This tells the seller that the transaction will have to be subject to your getting financing from a lender, and gives a general outline of the terms you will require of your lender's financing package.

10. What if I can't get financing?

If you cannot get financing and the offer is subject to your getting financing, you have the right to cancel the contract and get your earnest money back.

11. What is a Land Contract?

A land contract is an alternative way to buy real estate in which the seller provides the financing. A land contract splits title into two parts-legal and equitable. Legal title remains with the seller until the land contract is paid off. Equitable title is what is given to the buyer at closing. Thus, the buyer with equitable title is deemed the owner of the real estate and must insure it, pay real estate taxes, and pay for it. If the buyer defaults, the seller has the right to foreclose on the land contract, keep all the payments that were made, and get the property back without sheriff sale or a long redemption period. Land contracts give the seller more rights to get the property back quickly if a buyer defaults than a real estate mortgage does.

12. What is the Rental Weatherization Code?

Wisconsin Statutes require that older residential rental units comply with a minimum set of weatherization standards. When such units are sold, they must be inspected by a licensed inspector, and any work required by the inspector must be completed before the deed from the sale can be recorded. Therefore, the seller usually gets the property inspected and if the property passes, the inspector signs a Compliance Certificate. If the property is inspected and does not pass, then the buyer and seller must agree on completion of the work. Typically this is the subject of negotiation and made part of the offer. A buyer can agree to do the work to gain compliance and a Stipulation can be signed by the buyer which permits the deed to be recorded and requires that the work be done and a Compliance Certificate filed within one year of closing.

There are exemptions from the Rental Weatherization Code. The most frequently used exemption is for owner occupied one- to four-family units. So, if you are buying a duplex or a four-plex and plan on living in one of the units, you don't have to comply. In addition, newer units are exempt because they are deemed to have been built under the new code and will therefore be compliant.

13. I'm going to buy a house in the country. What should I do about inspections?

When buying a house in the country, you should put a series of contingencies in your offer that the seller be required to pay for: (1) inspection of the well mechanical system to ensure it complies with the plumbing code; (2) inspection of the septic system to certify there is no evidence that it has failed or is failing; and (3) having the well water tested for bacteria and trace minerals. If any of these are returned noting defects, you should retain the right to cancel the contract and get your earnest money back, or negotiate the required remedial action which the seller must take.

14. Do I need a survey?

Perhaps. In Dodge County it is unusual for there to be a survey of residential real estate in the cities. Surveys of residential parcels in the country and of commercial real estate is more frequent. Surveys are usually requested to confirm boundaries and look for encroachments.

15. I am selling my house. Do I need a real estate broker, or should I try to sell it myself?

Many home sellers have successfully sold their homes without real estate brokers. However, it has been my experience that a good real estate broker performs a valuable service to the seller by realistically valuing your home, bringing many potential buyers to the seller, encouraging a prospective buyer to make an offer, and assisting a seller from start to finish with the details. If you feel you can accomplish all of the above, you may be successful in selling your home by yourself. If you do find a prospective buyer, get them to make an offer. We encourage our clients to tell the buyer that you, as the seller, will pay to have your attorney draw the offer. At times, this perceived "bargain" may be enough to get that written offer in your hands.

16. I want to buy a house and there's no real estate broker involved. What's the next step?

The buyer needs to make an offer to the seller and it needs to be in writing. We will be happy to meet with the parties to discuss the terms and reduce the agreement to writing. The written offer can then be signed, and you will be off to a successful closing.

17. What is a homeowners warranty policy that comes with the house? Is it worth it?

A homeowners warranty policy is a marketing tool used by sellers and made available by real estate brokers covering the repair or replacement of major home systems or appliances. It usually costs a seller about $395.00. The broker receives a fee from the company for selling the insurance. The insurance typically provides coverage to a buyer for about the first 12 months of ownership. It has been our experience that the policies being marketed have a lot of exclusions and exceptions, and I question whether they add any value to a transaction. Very few transactions occur to which the insurance is applicable.

18. There is something wrong that needs correcting. Should I close?

As a general rule it is best not to close unless there is a written agreement in place outlining each party's responsibility for getting the item that needs correcting corrected. The reason for this is that a closing generally represents the conclusion of the transaction, signifying that the parties are satisfied all items required under the offer have been taken care of.

19. Can I stay after closing to move, or can I move in early?

No. Offers to purchase require that the seller move out so the buyer can move in on the day of closing. However, buyers and sellers can negotiate, as a part of the offer or by separate agreement, the conditions under which the seller may stay past closing or a buyer may move in before closing. We recommend the period for either be short and that "rent" be paid and real estate taxes be prorated based on such a negotiated agreement.

20. Do I need an attorney?

You should ask yourself if you feel comfortable going it alone. Some people do and others do not. The attorney owes only you his/her duty of loyalty. A broker will watch out for a client but is not holding himself or herself out as representing a party from a legal standpoint. Ask a broker; the good broker will suggest you get an attorney. The buyer's bank watches out for the bank. Most importantly, do what your intuition suggests. If things are being said you don't understand, if the playing field doesn't feel level, or if a party is changing the terms of the deal, get an attorney.

Typically, buyers get attorneys more frequently than sellers. I think that is because there is more at stake. Once the seller receives the purchase price, they are done. Once the buyer closes, any problems that arise are harder to correct without it costing the buyer money and energy. The attorney will be the troubleshooter and advocate, with the duty owed to the client only.

21. I'm selling my house. Does the attorney have to go to the closing?

No. Typically, if the attorney has reviewed the title evidence, prepared the deed and transfer return, and reviewed the closing statements, it is not necessary that s/he go to the closing.

22. I'm buying a house. Does the attorney have to go to the closing?

No, but once the closing has occurred it is much more difficult getting a seller to correct problems than if the closing is being delayed or potentially delayed by problems. The attorney's function for a buyer is to ensure that the contingencies of an offer are satisfied and that issues that arise pre-closing are satisfactorily resolved before closing. If these types of issues are resolved before closing, the attorney's attendance at closing may be optional.

23. Is buying a business just like buying a house?

The are many similarities but they are not the same. Buying a house involves the purchase of real estate only. Occasionally, some household furniture and/or appliances are included, but those items are usually negotiated separately with the seller. When you buy a business, there may or may not be real estate involved, but there will certainly be business assets, like equipment. There will also be other property like customer lists, inventory, phone numbers, and goodwill.

Disclaimer: The information supplied on this web site is general in nature and should not be relied upon to make legal decisions. This website is an advertisement for legal services. The material contained in this website is not intended as legal advice, and does not constitute the creation of an attorney/client relationship. All information regarding law contained in this website pertains to the law in the State of Wisconsin. The laws of other states and nations may be entirely different from what is described here.