Key Takeaways
- Wisconsin follows the Statute of Frauds requiring real estate contracts to be in writing
- Valid contracts require offer, acceptance, consideration, legal capacity, and lawful purpose
- Wisconsin uses standardized forms approved by the Real Estate Examining Board
- Earnest money should be deposited into the broker's trust account within 48 hours of receipt
- Contingencies (financing, inspection, appraisal) must be clearly specified in the contract
Wisconsin Contract Requirements
Wisconsin real estate contracts must meet specific legal requirements to be valid and enforceable.
Statute of Frauds
Under Wisconsin's Statute of Frauds, contracts for the sale of real property must be:
- In writing
- Signed by the party to be charged (or their authorized agent)
Key Point: Oral agreements to sell real estate are generally unenforceable in Wisconsin.
Essential Elements of a Valid Contract
| Element | Description |
|---|---|
| Offer | Clear proposal with definite terms |
| Acceptance | Unequivocal agreement to the offer's terms |
| Consideration | Something of value exchanged (usually money) |
| Legal capacity | Parties must be competent to contract |
| Lawful purpose | Contract cannot be for illegal purposes |
| In writing | Required for real estate contracts |
Wisconsin Approved Forms
Wisconsin uses DSPS-approved standardized forms maintained by the Real Estate Examining Board:
| Form | Use |
|---|---|
| WB-1 | Residential Listing Contract - Exclusive Right to Sell |
| WB-2 | Residential Listing Contract - Exclusive Agency |
| WB-3 | Residential Listing Contract - Exclusive Right to Rent |
| WB-11 | Residential Offer to Purchase |
| WB-13 | Vacant Land Offer to Purchase |
| WB-14 | Commercial Offer to Purchase |
| WB-36 | Buyer Agency Agreement |
| WB-40 | Amendment to Offer to Purchase |
| WB-41 | Counter-Offer |
| WB-50 | Agency Disclosure Statement |
Important: The Real Estate Contractual Forms Library is maintained by DSPS at dsps.wi.gov.
Earnest Money
Earnest money (also called a good faith deposit) shows the buyer's serious intent:
Handling Requirements
| Requirement | Details |
|---|---|
| Deposit timeline | Within 48 hours of receipt |
| Where deposited | Broker's trust account |
| Who holds | Broker (not salesperson) |
| Disbursement | Per contract terms or mutual agreement |
Wisconsin Rule: Firms must deposit earnest money within 48 hours. If received before a holiday or bank closure, deposit within the next 2 business days.
Common Contract Contingencies
Contingencies allow parties to exit the contract if certain conditions aren't met:
Financing Contingency
| Element | Details |
|---|---|
| Purpose | Buyer can cancel if financing not obtained |
| Deadline | Must apply for loan within specified days |
| Documentation | May require denial letter from lender |
Inspection Contingency
| Element | Details |
|---|---|
| Purpose | Buyer can inspect property and negotiate repairs |
| Timeline | Inspection period specified in contract |
| Options | Accept, negotiate repairs, or cancel |
Appraisal Contingency
| Element | Details |
|---|---|
| Purpose | Protects buyer if property appraises below price |
| Options | Seller reduce price, buyer pay difference, or cancel |
Contract Deadlines and Time
Wisconsin contracts typically include specific deadlines:
Time is of the Essence
Many Wisconsin real estate contracts include a "time is of the essence" clause:
- Deadlines are strict and legally binding
- Missing a deadline may constitute breach
- Extensions require written agreement using Form WB-40
Computing Time
| Rule | Application |
|---|---|
| Calendar days | Unless business days specified |
| Deadline ending on weekend/holiday | Extends to next business day |
| Written notice | Delivered per contract terms |
Termination of Contracts
Contracts may be terminated by:
| Method | Description |
|---|---|
| Performance | Both parties fulfill obligations |
| Mutual agreement | Both parties agree to cancel |
| Contingency not met | Condition specified in contract fails |
| Breach | One party fails to perform |
| Impossibility | Performance becomes impossible |
Exam Tip: Understand the difference between an executory contract (not yet performed) and an executed contract (fully performed).
Under Wisconsin's Statute of Frauds, which statement is TRUE about real estate contracts?
How soon must earnest money be deposited into the broker's trust account in Wisconsin?