Wisconsin Real Estate License Agency Law and Disclosures 2 — Questions and Answers
Question 1: Under Wisconsin law, when does an agency relationship between a broker and a client typically begin?
- When the client first calls the office
- When a written agency agreement is signed (Correct answer)
- When the client attends a showing
- When escrow closes
Correct answer: When a written agency agreement is signed
Wisconsin requires a written agency agreement to establish the client relationship and its accompanying duties.
Question 2: A Wisconsin licensee who works with a buyer but has no written agency agreement owes that buyer duties as a:
- Client
- Customer (Correct answer)
- Subagent
- Fiduciary
Correct answer: Customer
Without a written agency agreement the person is a customer, owed only the statutory broker duties, not full client-level fiduciary duties.
Question 3: Which document must a Wisconsin firm provide describing the types of agency relationships available?
- The Real Estate Condition Report
- The Broker Disclosure to Customers (Correct answer)
- The Lead-Based Paint Disclosure
- The Vacant Land Disclosure Report
Correct answer: The Broker Disclosure to Customers
The Broker Disclosure to Customers explains the duties a firm provides and the agency options available.
Question 4: In Wisconsin, a subagent relationship arises when:
- A buyer hires two brokers
- One firm authorizes another firm to act on behalf of its client (Correct answer)
- A seller lists with multiple firms
- A client refuses agency
Correct answer: One firm authorizes another firm to act on behalf of its client
Subagency occurs when a client's firm delegates authority to another cooperating firm to work on the client's behalf.
Question 5: When a Wisconsin broker represents both the buyer and seller in the same transaction, this is known as:
- Single agency
- Multiple representation (Correct answer)
- Designated subagency
- Customer service
Correct answer: Multiple representation
Wisconsin refers to representing both parties in one transaction as multiple representation, which requires written consent.
Question 6: A key duty a Wisconsin licensee owes to ALL parties, clients and customers alike, is to:
- Negotiate the lowest price
- Disclose material adverse facts they know (Correct answer)
- Guarantee financing
- Provide legal advice
Correct answer: Disclose material adverse facts they know
Licensees must disclose material adverse facts to all parties regardless of who they represent.
Question 7: If a Wisconsin licensee's client instructs them to conceal a known structural defect, the licensee must:
- Follow the client's lawful instruction
- Refuse and disclose the material adverse fact (Correct answer)
- Withdraw only if paid
- Ask the buyer to inspect harder
Correct answer: Refuse and disclose the material adverse fact
The duty to disclose material adverse facts overrides a client instruction to conceal them.
Wisconsin Real Estate License Agency Law and Disclosures 2
Under Wisconsin law, when does an agency relationship between a broker and a client typically begin?