Licensees and FSBO Advertising

A real estate license is required in order to provide brokerage services in the state of Wisconsin. Wisconsin Stat. Chap. 452 sets forth the practices, often referred to as brokerage services, that require a real estate license. Under current Wisconsin law, a license is not required to advertise For Sale By Owner (FSBO) properties. However, if an entity or individual has a real estate license, they must comply with Wisconsin license law to advertise FSBOs.

Compliance with Chap. 452 provides that before listing a property, real estate licensees must perform a competent and diligent property inspection, and the listing agent must ask the seller about the condition of the structure, mechanical systems and other relevant aspects of the property in a written response, which is typically utilized as a real estate condition report.  

SB 394/AB 407 eliminates certain consumer protections

In addition to removing the requirement to having a listing contract, this legislation carves out advertising FSBO properties from license requirements — including eliminating all the inspection, disclosures and duties required of all other real estate licensees. 

Wisconsin law establishes specific disclosures and responsibilities by real estate licensees as measures to protect consumers. The protections are designed to ensure that buyers and sellers have access to relevant information and fairness in during what is typically the single largest transaction of their lifetime. Allowing a licensee under some circumstances to be exempt from those requirements while being required to follow them in others creates consumer confusion and a lack of trust from the public.

SB 394/AB 407 encourages fraudulent advertising

The bill eliminates a real estate licensee’s responsibility to inspect the property when advertising a FSBO property. If a property can be advertised without confirmation by the real estate licensee by looking at the property themselves, who will protect the buyer? 

Removing a licensee’s obligation to inspect the property will lead to fraudulent advertising. 

The WRA opposes this legislation because the exemption of real estate licensees from adhering to vital consumer protections, such as inspections and other duties, is a harmful step that could have adverse effects on consumers.

Real estate licensees, like attorneys, should not have the option of deciding when they want to observe license law. The commitment to licensure is continuous; individuals remain licensed until it ceases to exist, requiring compliance with all state laws regulating the profession.