Changes to Your Offer to Purchase 2020
Starting January 1, 2020, a new WB-11 Residential Offer to Purchase will be available for real estate purchases in Wisconsin. While reviewing the prior 2011 WB-11, the Real Estate Examining Board wanted to make transactions easier and have clarified language for the parties reading and preparing the documents. While there are many minor changes to the document, we have outlined three of the most notable below.
1. Organization.
The WB-11 is now organized in a way that is easier for the purchaser or preparing party to read. Before the changes, the sequence of contingencies, purchase price, closing date did not follow a natural sequence, thus requiring the reading party to flip back and forth in the document.
Additionally, now all of the provisions relating to one component of the offer are grouped together. For example, on the original WB-11, there were earnest money provisions found throughout the document. Now, all of the earnest money provisions are gathered together on the second page. With these restructuring changes, the Real Estate Examining Board is hoping the document is easier to read and will provide less confusion.
2. Clarification.
The new WB-11 has been updated to account for the changing times, including changes in technology. For example, the earnest money provision now includes revised language allowing the Buyer to deliver the earnest money electronically. Additionally, the Inspection Contingency in the new WB-11 includes a list of lettered items to facilitate the options a party has in electing for an inspection. These minor, yet important changes, provide a party with more information relating to their options in pursuing their purchase.
3. Additions.
The updated 2020 WB-11 includes some new provisions. For example, there are now provisions regarding homeowner associations, and the document automatically includes a radon testing contingency. To incorporate provisions like these in an Offer to Purchase in the past, another addendum had to be created outlining the party’s needs.
Another new and notable provision is the inclusion of a FIRPTA provision. Approximately 5% of Wisconsin’s population was foreign born according to the last Census. This means that encountering real estate transactions in which the seller is a “foreign person” is not likely, but not impossible. A buyer purchasing property from a “foreign person” is subject to a federal tax provision. The main concern of the IRS in implementing FIRPTA is ensuring non-U.S. citizens are paying the required tax on the sale. The inclusion of this provision attempts to address this issue.
As attorneys, unlike realtors, we are not bound by the terms of the WB-11, but rather our attorneys can completely customize an offer to purchase based on individual client needs. On standard real estate transactions, we combine our years of legal experience with the WB-11 to provide a comprehensive, yet familiar format for buyers and sellers.
We hope this article has been helpful and informative regarding the new changes to the WB-11. Please contact Clair Law today to speak to one of our highly qualified real estate attorneys. Please remember, our office can provide the most assistance when contacted prior to the execution of any documents.