Wisconsin Real Estate License Ethics & Professional Practices 2 — Questions and Answers
Question 1: A Wisconsin broker discovers a material defect in a listed property after the listing is signed. What is required?
- Disclose it only if the buyer asks
- Disclose it to prospective buyers regardless of who asks (Correct answer)
- Keep it confidential to protect the seller
- Disclose it only after an accepted offer
Correct answer: Disclose it to prospective buyers regardless of who asks
Wisconsin licensees must disclose known material adverse facts to all parties in the transaction.
Question 2: Under Wisconsin license law, when must an agency disclosure be provided to a customer?
- At closing
- Never, it is optional
- At the first substantive contact with a customer (Correct answer)
- Only when a listing is signed
Correct answer: At the first substantive contact with a customer
Agency disclosure must be made at the licensee's first substantive contact with a customer.
Question 3: A Wisconsin licensee represents both buyer and seller in the same transaction. This arrangement requires:
- No disclosure since it is common
- Written consent from both parties for multiple representation (Correct answer)
- Approval only from the seller
- A separate broker to sign off
Correct answer: Written consent from both parties for multiple representation
Multiple representation in Wisconsin requires the written consent of all parties involved.
Question 4: What must a Wisconsin broker do with earnest money received from a buyer?
- Deposit it into the broker's personal account
- Hold it in the broker's trust account by the required deadline (Correct answer)
- Give it directly to the seller immediately
- Keep it as cash until closing
Correct answer: Hold it in the broker's trust account by the required deadline
Earnest money must be placed in the broker's trust account within the timeframe set by law.
Question 5: A licensee is asked to draft a complex addendum outside standard approved forms. The ethical action is to:
- Draft any legal language requested
- Advise the client to consult an attorney for legal drafting (Correct answer)
- Refuse to help at all
- Copy language from another contract
Correct answer: Advise the client to consult an attorney for legal drafting
Drafting original legal language is the practice of law, so licensees should refer clients to an attorney.
Question 6: Commingling in Wisconsin real estate practice refers to:
- Mixing client trust funds with the broker's own funds (Correct answer)
- Representing two clients at once
- Sharing a commission with a cooperating broker
- Advertising multiple properties together
Correct answer: Mixing client trust funds with the broker's own funds
Commingling is improperly mixing client trust funds with the broker's personal or business funds.
Question 7: A Wisconsin salesperson must conduct all licensed real estate activity under whom?
- Their own name independently
- A supervising broker (Correct answer)
- The local MLS board
- The Department of Safety and Professional Services directly
Correct answer: A supervising broker
A salesperson must work under the supervision of a licensed employing broker.
Wisconsin Real Estate License Ethics & Professional Practices 2
A Wisconsin broker discovers a material defect in a listed property after the listing is signed.
What is required?