FREE Wisconsin Real Estate License Agency Law and Disclosures Questions and Answers

Question 1

A Wisconsin real estate licensee is representing a seller. A potential buyer, who is a customer and not represented by any agent, asks the licensee for advice on how much to offer for the property. According to Wisconsin agency law, how should the licensee respond?

Accepted Answer

Inform the buyer that they cannot provide advice, as their duty is to the seller, and recommend the buyer seek their own representation.

Answer

Under Wisconsin law, a licensee owes fiduciary duties to their client (the seller). Providing advice to a customer (the buyer) on negotiation strategy would be a violation of the duty of loyalty to the seller. The licensee's duties to a customer include fair and honest treatment and the disclosure of material adverse facts, but not providing advice that is contrary to the interests of their client. Therefore, the correct action is to inform the buyer of their role and recommend the buyer obtain their own agent.

Question 2

Which of the following statements is TRUE regarding multiple representation relationships without designated agency in Wisconsin?

Accepted Answer

The brokerage firm and its agents must remain neutral and cannot provide advice or opinions that favor one party over the other.

Answer

In a multiple representation relationship without designated agency, the brokerage firm represents both the buyer and the seller, but must act as a neutral facilitator. The firm and its agents are prohibited from providing information, opinions, or advice that might favor one client's interests over the other's. Written consent from all clients is required for any form of multiple representation.

Question 3

A licensee lists a property. The seller informs the licensee that the basement leaks during heavy rains, but they do not want this disclosed to potential buyers. What is the licensee's duty according to Wis. Admin. Code § REEB 24.07?

Accepted Answer

Disclose the leak to all parties in writing, as it is a material adverse fact.

Answer

According to Wis. Admin. Code § REEB 24.07(2), a licensee has a duty to disclose all known material adverse facts to all parties in writing, in a timely fashion. A basement that leaks is a material adverse fact. This duty to disclose known material adverse facts overrides the client's instruction to conceal it. The duty of obedience does not extend to unlawful or unethical instructions.

Question 4

A buyer signs a WB-36 Buyer Agency/Tenant Representation Agreement with a brokerage firm. According to this agreement, the firm owes additional duties to the buyer as a client. Which of the following is an additional duty owed to a client, but NOT to a customer?

Accepted Answer

To provide advice and opinions on matters material to the transaction.

Answer

Under Wisconsin law, licensees owe all parties (clients and customers) the duties of fair and honest treatment, disclosure of material adverse facts, and safeguarding of trust funds. However, the duty to provide information, opinions, and advice on matters affecting the transaction is an additional fiduciary duty owed specifically to a client with whom the firm has an agency agreement.

Question 5

In Wisconsin, when must a licensee provide the 'Disclosure to Customers' form to a potential buyer who is not represented by an agent?

Accepted Answer

Before negotiating on behalf of the customer.

Answer

Wisconsin law, specifically Wis. Stat. § 452.135, requires that a licensee provide the 'Disclosure to Customers' form prior to negotiating on behalf of that customer. This disclosure clarifies that the licensee is not representing the customer as a client and outlines the duties owed to them. While it's good practice to provide it early, the legal trigger is before beginning negotiations.

Wisconsin Real Estate License Practice Test

Wisconsin Real Estate License Practice Test

FREE Wisconsin Real Estate License Agency Law and Disclosures Questions and Answers