If you are planning to sell your Wisconsin home, you'll want to do more than make it look good. As in every state, the law calls for you to divulge certain property flaws to prospective buyers.
Some sellers worry that this will scare away potential buyers. But failing to report certain issues can actually derail a sale or cause the buyer to bring a legal action against you later. It is therefore crucial for you to determine whether and what disclosures are required in Wisconsin prior to closing the property sale.
Most, but not all, sellers of real estate in Wisconsin are required to submit a real estate condition report to any potential buyer. (See Chapter 709 of the Wisconsin Statutes.)
The law doesn't, however, apply to multi-unit properties (more than four dwelling units). It also makes an exception for sellers who haven't even lived in the property because they don't actually own it, such as personal representatives of an estate, trustees, conservators, or anyone serving as a fiduciary.
If you find yourself serving in one of these positions and attempting to sell a property, you will not have to provide a condition report. Keep in mind, though, that you could ultimately be held responsible if you knowingly concealed a defect in order to expedite the sale of the home.
If you are not in one of the exempt categories of seller, you will most likely have to provide the real estate condition report described in this article. One last exception applies, however. The buyer can waive the right to receive the report. (See Wis. Stat. § 709.08.)
The real estate condition report required under state law prompts the seller to answer a series of questions regarding various aspects of the property. Your real estate agent is likely to provide you with a blank copy of the "Real Estate Condition Report" form, or you can read the required language in the statute (Wis. Stat. § 709.033.)
Many of the questions ask about structural defects, such as in the roof, chimney, foundation, HVAC, wiring, and plumbing systems. Others address possible environmental problems, such as well water problems, asbestos, lead paint, radon, or on-site fuel tanks. The remaining questions focus on legal issues to do with the property, such as boundary line disputes, shared well agreements, or encumbrances.
You must indicate next to each question whether or not you are aware of a defect falling into the category described, or whether it is "not applicable" ("N/A"), perhaps because the property doesn't contain that feature at all. In cases where you answer "yes," you must provide a written explanation to detail or explain the flaw.
If the property you are selling is a condominium, you must provide the prospective buyer with information such as its name, the date that the condominium association was created, its contact person, and a statement as to the amount of condominium fees or assessments currently due and owing.
Near the end of the form, you must disclose how long you have lived at the home.
Remember that the real estate condition report is not meant a guarantee as to the house's condition, nor does it put the buyer in the position of purchasing a trouble-free, "like-new" home.
Wisconsin law requires you to disclose any condition or defect that would result in a significant negative effect on the property value, that would significantly impair the health or safety of future occupants, or that would significantly shorten or negatively affect the normal life of the property. This means that you must have knowledge of a defect to the property and must reasonably believe that it will have a significant negative effect on the property. If both of those conditions are not met, you might not be required to disclose the defect. When in doubt, however, it's often best to disclose, so as to avoid buyer anger if you're later caught in what looks like a cover-up.
Wisconsin law requires sellers to provide the completed real estate condition report to the buyer no less than ten days after accepting an offer to purchase, but you can certainly provide it earlier.
Some sellers provide the condition report to a prospective buyer before even receiving an offer to purchase. That way, the buyer enters the deal feeling knowledgeable about the property's condition, and cannot later rescind the offer on the basis of information contained in the report itself.
Regardless of when you provide the real estate condition report, realize that in the event that you accept an offer and the buyer has an inspection done on the property, any defects identified by the inspector will be relayed back to you, and most likely become the subject of negotiation over repairs or a price drop.
If, however, the sale subsequently falls through, you are now aware of these newly discovered defects and must amend your real estate condition report to add them.