Earnest Money When Buyer Rescinds

Before April 1, 2022, two different sections of Wisconsin Statutes Chapter 709 regarding the Real Estate Condition Report (RECR) and the Vacant Land Disclosure Report (VLDR) gave a buyer a two-business-day right to rescind the offer but provided inconsistent results as to the return of the buyer’s earnest money when the buyer exercises that right.

For instance, Wis. Stat. § 709.05 permits a buyer to automatically get their earnest money back if the buyer rescinds when:

A) The buyer receives a report after the submission of an offer if a defect as defined in the report is disclosed.

B) The buyer receives an incomplete report or a report with an inaccurate assertion that an item is not applicable.

C) The buyer receives an amended report disclosing a defect that was not previously disclosed.

Before April 1, 2022, Wis. Stat. § 709.02(1) also gave the buyer a two-business-day right to rescind if the buyer did not receive the report within 10 days after acceptance of the offer, but the buyer did not automatically get their earnest money back. As of April 1, 2022, Wis. Stat. § 709.02(1) is amended and authorizes the buyer to receive their earnest money back if the buyer rescinds because they did not receive the report within 10 days after acceptance.

Incomplete Reports

Rather than answering the specific questions on the disclosure report, some sellers mark an “X” through the entire report or strike a line through all “N/A” responses. Effective April 1, 2022, if the seller provides a report with strikethroughs or unanswered questions, that the form is considered incomplete, and the buyer has rescission rights. A report is considered complete only if the seller answered or supplied information for each question in the report.

Italics Removed for Easements and FIRPTA

Effective April 1, 2022, the statutes in Wis. Stat. Ch. 709 were amended to clarify that the land use/easement question in the RECR (question F8) and in the VLDR (question E8) apply to private, not public, rights-of-way. In addition, the statutes were amended effective April 1 to add a new question in each report regarding FIRPTA, specifically question G4m in the RECR and question F9m in the VLDR.

This information previously appeared in italics in the WRA reports, but the italics will be removed on April 1, 2022.

Read more in “Revisions to the Real Estate Condition and Vacant Land Disclosure Reports – 2022” in the November 2021 Legal Update at www.wra.org/LU2111.

We’ve had a few questions about the new Sub-Type field options. The MLS Management Committee has drafted the following tooltip to help explain the field options. Please contact info@LSARealtors.com with any questions!

SF/Detached: Single detached dwelling. Not attached to another dwelling or part of a CIC. May still be part of HOA.

SF/Attached: ATTACHED to another dwelling (ex: Twin Home) but not part of CIC.

Condo/Townhouse: Part of CIC, both detached & attached dwellings.

Seasonal: Not currently suitable for year-round use.

The link below contains a summary of changes approved by the MLS Management Committee for the LSAR MLS database. Please carefully review the changes and update any necessary saved searches you may have that use these fields. ALL of these recommendations came from users of the LSAR MLS! If you have any questions, comments, or further improvements to make on the MLS database, please reach out to info@LSARealtors.com.

February 2022 MLS Changes Notice

Here are the webinars scheduled for April 2022! All times are CST.

Paragon Connect Comprehensive

Monday, April 11th | 1 p.m. CT REGISTER >>

Collaboration Center – Prospect Experience

Monday, April 4th | 1 p.m. CT | REGISTER >>

Collaboration Center – Prospect Setup

Wednesday, April 6th | 1 p.m. CT | REGISTER >>

Collaboration Center – Preference Wizard

Thursday, April 7th | 1 p.m. CT | REGISTER >>

GeoCoding Listings and GeoCode Quality Search

Wednesday, April 13th | 1 p.m. CT | REGISTER >>

Listings – Adding Features to a Listing

Thursday, April 14th | 1 p.m. CT | REGISTER >>

Map Search: Paragon, Paragon Connect & Collab Center

Monday, April 25th | 1 p.m. CT | REGISTER >>

Paragon Home Page – Calendar Widget

Wednesday, April 27th | 1 p.m. CT | REGISTER >>

Paragon Home Page – Contact Activity Widget

Wednesday, April 27th | 1 p.m. CT | REGISTER >>

Occasionally, whether through a contact accidentally clicking an "Opt-Out" link or repeated delivery failures, a customer's email address may be removed from automatic email notifications. If this occurs, your contact must opt back in their own email using the link below.

Your contacts can opt back in at: http://p100.paragonrels.com/paragonsubscriptions/optin.aspx

As you are likely already aware, Certificate to Withhold/Office Exclusive Listings (OEX) must be filed with the MLS office within two business days of a fully executed listing agreement. Formerly, they were submitted via email. Going forward, we will be utilizing a Google Form (linked below) for OEX submissions. In addition to being a more uniform and efficient process, new features include the ability to be sent an email confirmation with the details and more robust analytical capabilities. Check it out below and bookmark it to your browser! Please contact the MLS Office with any questions: 218.728.5676 | info@LSARealtors.com

LSAR MLS Office Exclusive Listing Submission Form

The LSAR Board of Directors updated language to Section 2.9 to allow more flexibility for properties unavailable for showings. Two main points have been updated:

• You must clearly communicate availability (or unavailability) of property within two business days. Generally this will happen through blocking out time in ShowingTime.

• If a listing is not available for showings longer than four business days or six calendar days, you must complete a Hold No Show Form and send it to LSAR.

Section 2.9 Temporarily Unavailable to Show Listings:

The availability of a property for showings must be clearly communicated to MLS participants within two business days. If a listing is not available for showings for a period exceeding four business days (or six calendar days), the listing broker must complete the required form and submit it to the MLS. The MLS will change the status of the listing. It is the listings broker’s responsibility to change the status of the listing prior to any showings being allowed.

In the event a listing is indefinitely and contractually prohibited from all showings (such as “sight-unseen” sales), the listing will be allowed to remain in an active status provided disclosure is included in the public remarks and agent remarks of the MLS.

A $1,000 fine will be assessed for allowing showings on a listing marked as unavailable to showings.

A $50 fine will be assessed for a listing in violation of any other provision of section 2.9.

The MLS Committee earlier this year updated the definition to standardize the bedroom count field. The definition is:

“In order to be included in bedroom count, room must be defined as bedroom by local unit of government code. If no local unit of government code is available, defer to UBC (minimum of 70 sq feet, privacy, egress and heat source).”

It is hoped that this will help clarify this for our members, customers and clients.

The Board of Directors has approved an update to the “Service Area” of the MLS. The “Service Area” in part defines what listings MUST be entered into the MLS. Previously the Service Area was the entire state of Minnesota and Wisconsin. Service Area now means: the Minnesota counties of Aitken, St. Louis, Lake, Cook, Carlton, Pine and the Wisconsin counties of Douglas, Bayfield, Ashland, Iron, Burnett, Washburn, and Sawyer.

All required property types located within the Service Area must be input within two business days of the listing date.

Please refer to the MLS Rules & Regulations in the “MLS Documents” section for all applicable rules and direct any questions to maranda@LSARealtors.com.

Coming Soon Status

The “Coming Soon” status will now be available AFTER the listing date (for no more than 21 days). This also means that the status is now available to Wisconsin listings as it is available during the listing period. In addition, the “Coming Soon” status will be disseminated in data feeds.

A new “Showing Start Date” field has been added and will appear as a required field when the “Coming Soon” or “Hold-No Showings” status is selected. The listing will automatically become “Active” on the “Showing Start Date” and the agents will be able to schedule showings to occur on or after the “Showing Start Date.”

Clear Cooperation Policy

What is it?

Within one business day of any public marketing of a property (including flyers, yard signs, digital marketing, website displays, etc.) by any person (including the seller and/or their representatives) the property MUST be entered into the MLS.

How will it work?

If your executed listing agreement allows for a pre-marketing period, you would enter the property in the MLS with the “Coming Soon” status. LSAR has drafted a “Coming Soon Listing Authorization Form” which must be completed and signed and kept on file. This form must be made available to LSAR staff upon request. During the “Coming Soon” period the property may NOT be shown by anyone. On the showing start date, your listings will automatically switched to “Active.”

Is this the same as the two business day input rule?

No. While the two are related, the Clear Cooperation rule requires entry within one business day of marketing. The input rule requires a property to be listed within two business days of the listing date (contract start date).

Does this apply to the MN Facilitator Services Agreement?

The key to determining if listing taken under this type of agreement centers on lines 15 and 151. Line 15 indicates whether the listing is taken on an exclusive or non-exclusive basis. As the MLS does not accept non-exclusive listings, “Exclusive” would need to be indicated on this line in order for entry in the MLS. Line 151 specifies whether or not compensation is offered to cooperating brokers. As the MLS does not accept listings that do not offer compensation to cooperating brokers, “Shall” must be selected on this line in order for the listing to be eligible for entry. Provided lines 15 and 151 are marked accordingly, any public marketing of the property by the agent or the seller would require the listing to be entered under the MLS Rules & Regulations.

Can’t I just use a Certificate to Withhold Property Listing Form (OEX)?

While OEX listings are still an option available to sellers and MLS participants, NO PUBLIC MARKETING of OEX properties may occur under this policy. If any public marketing of an OEX property does occur, it MUST be entered into the MLS.

What happens if my seller publicly advertises the listing?

This policy applies to ANY advertising of the listing, including by the seller or other parties so it would be subject to the Clear Cooperation policy.

How will the “Coming Soon” status work?

This status can be used prior to the listing agreement start date and cannot exceed 21 days from date of entry. The listing will automatically become active on the “Showing Start Date.” Listings in this status will be disseminated in data feeds. Listings with this status cannot be shown by anyone. When you select Coming Soon for the status, you will be prompted to enter a “Showing Start Date.” The listing will automatically become active on the “Showing Start Date” and ShowingTime scheduling will be blocked out up until this date.

What happens on the “Showing Start Date?”

On the “Showing Start Date”, listings with the Coming Soon status will automatically be switched to “Active” by the system.

Can I change the “Showing Start Date?”

A properly executed amendment to the listing agreement would need to be submitted to the LSAR in order to change the listing date in the MLS and therefore, the date the listing goes to active status. Remember, the property CANNOT be shown by anyone while in Coming Soon status.

What happens if I don’t follow the rule?

LSAR MLS Rules include a fine of $1,000 for failure to enter a listing within one business day of public marketing. In addition, the fine for allowing showings on a listing unavailable for showings (including coming soon listings) is $1,000.

Who can I contact if I have questions?

LSAR Office: info@LSARealtors.com

Resources:

NAR Page on Clear Cooperation

LSAR Coming Soon Listing Authorization Form

LSAR MLS Rules & Regulations (Section 1.01, 1.3, Exhibit A)

Did you know you can use ShowingTime to schedule showings on listings outside the LSAR MLS? And when you allow showings through ShowingTime on your listings, agents outside the LSAR MLS are able to schedule showings on your listings too! Pretty cool, huh?!

ShowingTime Online

ShowingTime Mobile (Remember to uncheck the “Only Lake Superior Area MLS” Checkbox)

LSAR is excited to announce an enhanced ShowingTime experience went live on September 27th!

Enhancements Include:

• Two Way Texting

• Enhanced ShowingTime Feedback – Unlimited customized questions and reporting to get specific feedback that will help sell your listing faster.

• ShowingTime Secure Access – Restricts access information for confirmed appointments until a scheduled appointment time to keep home access secure.

• ShowingTime LIVE Video – Allows agents to conduct LIVE video showings directly from the ShowingTime mobile app with the tap of a button.

• ShowingTime Mobile App – Use the ShowingTime Mobile App to confirm showings, manage showing feedback and view listing activity reports.

Recorded Training On New Features: Click Here!

Great news! Electronic earnest money is live and ready to use!

When you’re on a property details page in the MLS, you’ll notice a little TrustFunds icon. Click that icon to request earnest money electronically. No need to log in or sign up! All agents are already active.

Look for the TrustFunds icon to send earnest monies electronically!

Enabled on AFD – 2 Page, AFD – 3 Page, All Fields Detail, Custom Detail 1, and Custom Detail 2.

If your Broker or Title Company is not on the list of registered Trust Accounts, please email or call them to encourage them to sign up so you can route earnest money to their account.

You’ll love electronic earnest money because::

• It’s more secure than a paper check!

• It’s simple and convenient for you and your buyer!

• You don’t have to spend time and money driving around to pick up checks!

• You can see the real-time status of every payment request!

Electronic earnest money is here. What will you do with all of your extra time?!

Learn More About Trust Funds

How Does Electronic Earnest Money Work? TrustFunds

TrustFunds FAQ

Recorded TrustFunds Training (3/16/21): https://attendee.gotowebinar.com/recording/38432743113574415

Brokerages Currently Registered: https://lsar.trustfunds.us.com/current-members

Are you a broker and want to get registered? https://lsar.trustfunds.us.com/member-registration?1=1&memberType=B

Please contact us with questions or to request your Office ID# at Info@LSARealtors.com

TrustFunds Support

Phone: 888-249-1616

Email: support@trustfunds.us.com

Web Ticket (Fastest)

In response to growing concerns regarding buyer letters, the Lake Superior Area REALTORS, Inc. has drafted the Addendum to the Listing Contract: Personal Buyer Letter Disclosure. This form will provide a disclosure to the seller of inherit issues with Buyer Letters and an opportunity at the time of listing to affirmatively direct their agent on how they would like buyer letters to be handled. LSAR’s legal counsel has reviewed the form language which will provide an important role in disclosure and limit liability for our agents and brokerages. The form can be found in the “MLS Documents” section of the MLS and will be added to Instanet. The language of the form appears below. Special thanks to RE/MAX Results for providing a starting point and our Fair Housing Task Force members for their relentless pursuit of improving our industry and bringing this benefit to our members: Kim Wolff (Chair), Rod Graf, Doug Kman, Lynn Nephew, Shaina Nickila, Jim Phibin, Danielle Rhodes, Yoana Sol, and Sara Wisdorf!

Click here for Addendum to the Listing Contract: Personal Buyer Letter Disclosure PDF

The link below is a short tutorial that you can send to your clients that will show them how to Interact and Complete a signing sent to them from Instanet.

Tutorial For Clients Showing Them How To Interact and Complete A Signing In Instanet

Below are some links to help you utilize Instanet's ability to send Disclosures and such for your clients to fill out. When the clients fill out the form and then saves and closes out the document, it will update the form in real-time in your Instanet Profile. You can then add them to transaction you have already created, or create a new one.

Member Tutorial on to how to send Disclosures and such for your clients to fill out from Instanet.

Tutorial For Sending Disclosures and Such For Clients To Fill Out From Instanet

Copy and send the link below to your clients for a short video for them to watch and how to properly interact and save the forms sent from Instanet.

Client Tutorial For Filling Out Disclosures and Properly Saving Them

It seems like Facebook is the go to for Agents to post their Agent Opens these days, but in all reality not everyone participates in social media platforms and such. However, the Tours section of the the Market Monitor is a good place to look for upcoming Agent/Broker Opens. This will ensure that all LSAR MLS Participating members will be able to see any and all upcoming Tours. Tours in Paragon is specific to Agent/Broker Opens in the MLS. Agents will be able to quickly check for Agent/Broker Opens by clicking on the Market Monitor under Tours.

How do I add an Agent Open to the Paragon MLS you ask?

In the Listing Maintenance of your Paragon Listing, you can click on the Add/Edit Tours link.

How do I view upcoming Agent Opens?

Under the Market Monitor from the MLS homepage, click on the number next to "Tours."

Personal Agent Rankings go out bi-annually (midyear and end of year) and if you would like to receive your future LSAR MLS agent rankings, please fill out the opt-in form by clicking on the link below. Rankings are based on “Sold” data from January 1st thru June 30th (Midyear) and January 1st thru December 31st (End of Year) of the corresponding calendar year.

Click Here To Opt-In For Future LSAR Agent Rankings

Question: How do I enter a listing for comparable purposes in the MLS?

Answer: MLS users are permitted to input listings in the MLS as comparable properties even when the sale itself did not originate out of the MLS. Examples include when an agent represents a buyer in a FSBO listings, when an agent facilitates a transaction between a buyer and seller who already knew each other, or one-time showing contracts. While it is not required to input these properties, it is encouraged for the benefit of other MLS Participants and for our market statistics. There are some steps you will need to ensure you still take in order to input these properties:

• Get Permission: Make sure permission to enter the property data is granted in writing from both parties of the transaction. This may already be part of your contract but double check

• Enter ALL Required Information: All required information as with any other listing, is required for a comparable input. This includes, at a minimum, a main exterior photo of the property and all fields marked with "R." Use the correct dates as stated on contracts rather than the day you are entering the listing.

• Be Generous with Details: Appraisers often need information beyond the required fields in order to use the properties for comparable purposes. Please try to gather and enter data such as room dimensions, condition/updates to the property, and additional photos. Remember, it may lead to additional and unnecessary time calling for information on properties if it's not entered in the beginning.

• Inform MLS Office: If you did not represent the seller, the "FSBO" or "Nonmember" agent/office will need to be entered as the listing office. MLS staff are the only users able to make this change for you. Email info@daar.com with the MLS number to make the change.

• Indicate Comparable Input: Commonly this has been entered in the agent remarks should also be added under the "Listing Type" field. You may still receive a warning email for entering a listing past the two-day "listing date" grace period. MLS staff reviews all of these warnings and looks in the MLS to verify if the listing was input for comparable purpose prior to assessing any fines.

If you have further questions, please contact our office: (218) 728-5676 or info@LSARealtors.com