How to Make an Offer...
...Whether you are working with a buyer's agent or a seller's agent, the licensee in Wisconsin is required by license law to give fair treatment to all parties. No licensee is allowed to withhold any fact that is material to the transaction. When you have chosen a property you should consider asking questions beyond that which is found on information sheets provided by the listing agent. You will discover that information sheets are as varied as the agents who provide them.

* If not provided, ask about present tax assessments and how you might expect taxes to change after you buy. Ask if there are environmental factors that may affect the property, i.e., flood plain, shoreline regulations environmental corridor, wetlands or hazardous materials.
* Ask for information regarding any present or future assessments that will affect the property.
* Ask for a copy of the offer to purchase and the standard addenda for you to review ahead of time.
* Don't be afraid to ask questions.
* Consider putting a clause in your offer, making it contingent upon the approval of your attorney.
* Be sure that you ask for a professional home inspection. If buying land, ask for a time in the offer to determine if you can use the land as you wish.
* If you have a question - ASK IT. Then ask that the answer be incorporated into your offer.
Remember: Even if the listing sheet and the agent say something is included - it isn't unless it is written as an inclusion!
* Listing brokers may provide comparables on a property to the buyer without violating agency duties to the seller. The listing broker may not discuss value with the buyer, but should encourage the buyer to make their highest and best offer as required by RL24.12
* Verbal acceptance is not recognized by Wisconsin law. Until a written offer is signed by all buyers and sellers and ultimately delivered to the buyer or seller per contract - there is no accepted offer.

How much should you offer?
A long time ago (15-20 years) the real estate market was in the doldrums. Sellers occasionally planted flowers around their signpost. Interest rates were 15% and more. Unemployment was 25% in this community. Buyers rarely made full price offers. Today's market in this area is different. Sometimes offering full price isn't enough. Several other buyers may be bidding on the same property.

Understanding your area's market conditions can be valuable if you are trying to successfully negotiate an accepted offer. If your offer is too low, you could risk losing the property to another better-educated buyer. You may also risk insulting the sellers, making any negotiation difficult.

Enrage a seller with a "low-ball" offer and you are likely to have a rejection response or a full price counter offer. A good buyer's agent will assist you in writing a good offer. A good seller's agent will assist you in writing a good offer. You should have comparables at your disposal to help you determine the fair market price for the property. Then the fun can begin. Does your conclusion of value match the expectation of the seller? The difference between the two numbers becomes the field of negotiation. How much do you want the property vs. how much will the seller require…that is the bottom line.

ADVICE? The closer your offer is to the number the seller wants, the less likely the seller is to counter for a higher price. If you want to gamble, come close to what you think the seller wants.

BUT BEWARE! There is a natural rule, written nowhere, I'm sure. But the rule plays out often. "As soon as you pick a property-others want the same property-even if it has been on the market for a long time!"

I had a waterfront home listed; on the market for a month with me and for 6 months with the previous broker. I wrote an offer during the afternoon and made an appointment for presentation that evening. A second offer came over the fax a couple of hours later. Both offers were the same number. One buyer had 40% down. The other had 5% down and provided no income/debt information. The better buyer got the accepted offer. The 5% buyer was furious! "I would have paid full price. Why didn't I get a counter?" Buyers should make their best offer unless they aren't going to be upset if they lose. In this case, the sellers chose not to jeopardize his position with a good buyer to see if they could get a little more money.

GUIDELINE: If you are convinced that there are no other buyers for your property and you have chosen a property that has been on the market for a while, use your knowledge of the market. Ask the agent helping you to do a MLS search for properties with similar qualities. What is the list price to sale price ratio. Compare your choice to others and make your offer based upon your research. If your property seems to be priced high, you might consider discounting a bit more than the average. That can leave a chance for you to save some money or can leave some room for negotiation. Assuming, of course, that you have the opportunity to negotiate.

The shorter the time on the market the tougher it is to negotiate. An offer that would look good six months from now may not be considered enough in the first week. The well-schooled seller will likely have the property priced right in the beginning. That helps put smiles on everybody's faces.

Don't be surprised to discover you are one of multiple offers. There is no magic formula for success in this situation. Set your limits, determine how badly you want it, write your best offer. Provide the best information possible regarding your qualifications. Sometimes the best buyer's offer is chosen over the higher offer from a lesser buyer. A pre-approval certificate is an excellent idea!

MY BEST ADVICE: Make your first offer your best offer. You may only get one chance to attract the seller's attention. Set your limits. Don't pay more than you can afford. Don't pay more than it is worth unless you know what you are doing. But don't lose something you want for a few thousand dollars. At about $7 per thousand for PITI, $5,000 costs about $35.00; the price of a good fish fry in our area.

Lets walk through The Wisconsin Offer to Purchase
The Wisconsin residential Offer to Purchase, form #WB-11 is the form approved by the Department of Regulation and Licensing. Offer forms dated before April 1, 1999 should not be used, after November 1, 1999. Line 1 is the date and states whether the agent writing the offer is working for the buyer or the seller. Agency should be discussed before you are sitting down to write your offer. Go to Agency Issues on the buyer or seller guide for an in-depth discussion of Agency. Whether the Wisconsin agent is the seller or the buyer, they are charged with full honesty and fairness to all parties.
* Show your name, as it should appear on legal documents.
* Be sure the description of the property is full and complete. A mistake could be costly.
* Earnest money tells the seller you are "in earnest." A small amount could tell the seller that you don't want to lose much if something goes wrong. You strengthen your offer by putting down an earnest money deposit that shows your commitment to the transaction.
* Inclusions & Exclusions: Be sure to write down everything that you wish to include in the transaction. Regardless if they are listed on an information sheet, nothing is included unless it is specifically stated in the offer.
* The property condition report should be provided for every residential sale and is recommended for vacant land. By statute the buyer has the right to receive this report. Read more about this on lines 75-84 of WB-11.
* Read lines 22-33 carefully. Binding acceptance occurs only when the document is delivered, per contract, within the time stated. It should be noted that the date of acceptance might not be the same day as binding acceptance. Be careful to count "days after acceptance" correctly. Also, note that time is of the essence as to binding acceptance. If line 21 states January 10, 1999, an acceptance date of January 11 or later must have the date amended and initialed by all parties to be an enforceable contract. In the revised offer (April 1, 1999), the buyer or seller may name an alternate recipient such as their agent or another designee.
* If you don't intend to occupy the property, you will likely be required to file a stipulation to conform to DILHR Weatherization standards. The rules are detailed in the Buyer and Seller Guide. Note that weatherization rules have changed since the first requirements were set forth. Three or more unit buildings built after April 1976 may be exempt. One - Two units built after December 15, 1978 are likely exempt. Building with previous certifications are exempt.
* Financing contingency: lines 149-163. This section should be filled out to protect you, the buyer. If you do not have the cash for closing your transaction, you will be obtaining a mortgage. Find out what terms you can expect. It is suggested that you add ¼% to ½% to "today's" rate, to allow for market flux. READ LINES 164-170 carefully! Even if a loan commitment says "subject to appraisal" or any other "subject to" clause, your financing contingency is satisfied if the seller/seller's agent receives any loan commitment, conditional or not! Instruct your lender not to "Kick out a commitment without your approval."
* Read through page 2 of 5 and 3 of 5. Detailed explanations of your transaction are included. Be sure to read it carefully. In the event of dispute or confusion you will better understand your rights and responsibilities.
* Take special note of lines 171-172. The seller may terminate your offer if your loan commitment is not delivered on time. It is important that you pay close attention to the dates in your offer. Per line 175-179, the seller could opt to offer "seller financing" if your loan application is denied.
* The financing contingency is written for the buyer's protection. At present, I recommend 30 days for loan commitment unless you have been pre-approved and need only an appraisal to complete your commitment. CAUTION: buyers should not provide a conditional loan commitment to seller or seller's agent unless they are certain of the conditions. Delivery of any loan commitment means that the buyer has now waived the financing contingency. Failure to appraise or verify funds, etc. shall no longer be factors. If, for some reason, the lender denies the loan after the conditional commitment is delivered, the buyer would still be expected to close. The buyer may choose to change the wording of the contingency to allow for the condition that may be listed.
* If you have a home to sell, expect the seller's agent to require you to waive the sold subject contingency, along with the finance and professional inspection contingencies if you opt to waive the sale of your home if "bumped" by a subsequent offer.
* I highly recommend that you have a professional inspection done. More detail on home inspections is on Buyer/Seller Guides. Read lines 298-316. Note the words "significant adverse facts." This is not intended to be a laundry list for cracked windows, loose doorknobs, etc. Be sure you understand the "Right to Cure" description and the difference between asking for repairs and delivering a notice of defects. You may wish to consult an attorney regarding 'defects" and whether the seller shall, or shall not, have the right to cure.
* The New Offer (4-1-99) notes on line 305 and further on lines 97-110: Testing may not be done without seller's authorization-inspection only.
* Note lines 204-206 of offer (4-1-99), Gap endorsement": Coverage is recommended to insure over liens that may be filed between endorsement date and closing.
* Most professional Realtors use addendum for additional items;
- Underground storage tanks
- Lead-based paint, radon, asbestos, etc.
- Well and/or septic inspection and water tests
- Legal use of facsimile signatures
- Home Warranty
- Surveys, boundary maps, etc.
- Occupancy
* Whether a buyer is working with a buyer's agent or a seller's agent, it is advisable to make your offer subject to the review and approval of your attorney.

Surf through the reports found on BUYERS GUIDE for more information regarding your real estate transactions.

Your purchase of real property should be an exciting and enjoyable experience. Prepare yourself through study and research. Choose a Realtor® in whom you have confidence. Expect the road to get bumpy as the transaction goes together, as lenders, appraisers, inspectors and more move into the picture.

Relax - and Enjoy the Journey... The Destination is an Incredible Experience!