1. Naming Minors as a Direct Beneficiary of a Financial Account

Naming a minor child as a direct Payable On Death (POD) beneficiary of a financial account or as an insurance beneficiary could result in the money either going directly to the child’s guardian, or to the child the minute , he or she turns 18. Many 18-year-olds who come into large sums of money spend it in ways that may not be in their best interest or a child’s guardian may not be the person you want controlling the money either (i.e. divorced spouses). Parents or grandparents of minors should consider other estate planning tools, such as a trust, to avoid this situation.

2. Adding a Child as a Joint User to a Bank Account

Aging parents often find it advantageous to add one of their grown children to their bank accounts as a co-owner/ joint user so that their child can handle their finances. When the aging parent passes, the child on the bank account now owns those funds 100%. Parents with multiple children may not have anticipated this or assumed that the child would voluntarily share the funds with their siblings. In most cases, the child on the bank account does not share the funds with their siblings, and legally, they have no obligation to do so. Even if that child were to share the funds, unintended gift tax consequences can arise. Aging parents in this situation should consider using a Financial Power of Attorney to allow a child to manage their finances during their lifetime.

3. Improper Spousal Ownership of Real Estate

What happens in Wisconsin to real estate when one spouse passes? Does the surviving spouse automatically own the real estate? The answer lies in the way the spouses took ownership on the deed and the type of real estate owned. Simply having both spouses listed on the deed as owners (such as “Jack Doe and Jane Doe”) is not enough to avoid probate in most cases. Special consideration must be taken when titling real estate to ensure that a probate is not required between the spouses when one spouse passes. Having an attorney review your deed and fix any unintended titling mistakes can help prevent costly mistakes that can arise with what is often our biggest asset – the home! An attorney can also advise on options for passing down real estate when both spouses pass and common mistakes that can arise with these transfers and how to avoid them.

Schedule a consultation with Wynn at Law, LLC today to discuss the estate planning process

Whether you already have an estate plan in place and need to review it, or you would like to start from scratch, our attorneys are here to assist you. Contact Wynn at Law, LLC today for a consultation at 262-725-0175 or visit our website’s contact page. Wynn at Law, LLC is based in Southern Wisconsin and has offices conveniently located in Salem, Delavan, and Lake Geneva, Wisconsin.

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Land contracts are written agreements between a buyer and seller of real estate in which the seller provides financing to the buyer on agreed upon terms. The property under the contract can range anywhere from vacant land to an apartment building. Once the parties have executed their agreement and the buyer has made a down payment (if required) to the seller, the buyer can then obtain possession of the property immediately.

Why use a land contract?

For those experiencing trouble obtaining a traditional bank loan due to low credit or a recent bankruptcy filing, land contracts can provide a way for buyers to bypass the bank and instead work directly with the seller to finance the property. A Seller may also benefit from a land contract if the property being sold does not qualify for traditional lending. Land Contracts may also be an attractive option for selling between family members – particularly for adult children seeking to buy their parent’s home. Parties are often able to work out more favorable financing terms than what the bank can offer, making land contracts great options for first-time buyers in a less than favorable market.

How do land contracts work?

Like a mortgage, a buyer is still going to make a down payment on the property followed by installment payments, but these payments go directly into the seller’s pocket. The contract itself will work out payment frequency, but typically payments are made monthly with one final balloon payment at the end. The balloon payment is the balance of the loan owed to the Seller.  The idea is that by the time the buyer reaches the final balloon payment and may need a loan to make that payment, enough time has passed to let the buyer’s credit heal thus allowing him or her to get a traditional bank loan. In some cases, the parties will agree to pay the total sum of the purchase price in monthly payments and no balloon payment will be required.

Land contracts are also sometimes referred to as “contracts for deed” because that is essentially the buyer’s goal – once all of the land contract’s terms are fulfilled, the seller will transfer ownership to the buyer via deed.

What happens if the buyer defaults on payments?

Because land contracts are legally binding contracts, a seller has a few options when a buyer fails to make timely payments:

• The seller could file suit for breach of contract seeking reimbursement through money judgement, garnishment, or other means,
• The seller could file suit seeking termination of the land contract (most appropriate when the buyer has simply disappeared), or
• The seller could seek foreclosure, giving the buyer a final opportunity to pay, and either having the property revert to the seller or have it sold if the buyer foregoes this final opportunity.

These options may vary depending on the land contract’s terms and the state where the property is located which is why a seller in a land contract should be vigilant in drafting the contract so as to include desired remedies in the event of a buyer’s default.

Is a lease-to-own agreement different than a land contract?

Lease-to-own agreements operate much differently than land contracts, as these agreements typically give a tenant the option to purchase the property at the end of the lease term for an agreed-upon price or agreed-upon future value. Whereas the payments made during a land contract are subtracted from principal and interest, payments that a tenant makes during a lease-to-own agreement may not necessarily count towards the price that the tenant ultimately pays to exercise their option to purchase, unless a rent premium provision is added. However, even with a rent premium provision, these agreements rarely allow the entire rent payment to be credited towards the purchase price.

Lease to own agreements often also charge tenants an option fee – this is an additional charge a tenant pays upfront to preserve their right to purchase at the end of the lease term. A tenant who ultimately decides not to exercise their option to purchase generally loses the additional rent premiums and option fee, as these are most often non-refundable.

There is a significant difference between title rights in land contracts and lease-to-own agreements. Buyers in land contracts hold equitable title to the property. This means that as long as the buyer is making the agreed-upon payments, the buyer has the absolute right to occupy the property and continue towards their right to purchase that property. While the seller in a land contract is still the holder of legal title, the seller cannot try to sell the property to anyone else.

A tenant in a lease-to-own agreement does not hold equitable title. The distinction between a buyer in a land contract with equitable title and a tenant in a lease-to-own agreement who holds no equitable title, is influential on which party pays taxes, insurance, and maintenance/repair fees. For example, it is standard for a buyer in a land contract to pay the real estate taxes and property insurance, whereas in a lease-to-own agreement, it is more typical of a landlord to pay those expenses.

The pros and cons of a land contract:

As a buyer in a land contract, the pros are obvious: the opportunity to obtain financing on property without a bank. However, sellers should be cautious of who they decide to contract with. Unlike banks, individual sellers do not have the luxury of obtaining comprehensive background information from a buyer and assessing whether this is a risk worth taking.

Parties seeking to enter into a land contract should seek the assistance of an attorney for drafting and explanation of its terms and conditions. Both parties will be better off if they fully understand their obligations and liabilities that can arise when contract terms and conditions are not followed.

Contact us today for a consultation at 262-725-0175 or our website’s contact page. Wynn at Law, LLC is based in Southern Wisconsin and has three office locations: Lake Geneva, Delavan, and Salem.

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1. Consider how easy it would be to sell the home

The last thing on a first-time buyer’s mind is the sale of the home they are about to buy; however, this is a crucial consideration if you ever want to step up in the home-buying game. It is likely that the proceeds from the sale of your first home will be used to purchase your second home, and that your second home may contain a few more bedrooms, an extra bathroom, or other features that were not in the budget at the time of your first home purchase.

To ensure that you can reap enough of a profit to make the step up to a bigger and better second home, you should be paying attention to the market and considering whether your home will eventually sell for more than you purchased it for. To help keep your home value up, you should make sure that you allocate money from your yearly budget to keep up with the maintenance of the home. Part of this allocation should be for an emergency fund in the event that an expensive and unexpected repair arises. Other things to consider are the desirability of the location, its related school district, distance to shopping, how well the surrounding homes are maintained, etc.

2. Ask for a home inspection contingency

A great way to reduce your risk of inheriting an expensive repair with a home is to make your offer contingent on an inspection. If possible, try to attend your home inspection and ask the inspector questions – if the inspector notices something that needs to be repaired, they may be able to give you a rough fee estimate and other insightful information.

Know how this contingency works. To ensure you know your rights when it comes to a home inspection, you should hire a lawyer. A lawyer can advocate for your interests if the inspection report either makes you no longer want to purchase the property or makes you only want to purchase subject to certain conditions and repairs. A lawyer can also help you understand the type of inspections you may have, how many, when, and other deadlines that need to be met to preserve your rights under an inspection contingency.

3. Shop around for your mortgage

If you are financing your home with a mortgage, you should shop around or consider using a mortgage broker, who can shop around for you. Lenders will offer different interest rates, and the best way to ensure you are receiving the lowest rate is to call around or use a broker. You do not have to begin the underwriting process with each lender to obtain a rate estimate, rather you can call around and ask hypothetical questions such as what your rate would be with your current credit score, the amount you anticipate putting down, and by providing your debt-to-income ratio.

4. Understand your title insurance policy

A title insurance policy not only protects you against some issues that may later arise with ownership of the home, but also provides insight into any judgements, liens, mortgages, restrictions, and/or covenants that may encumber the property. Understanding these documents is important for a variety of reasons, but especially if you plan on building an addition, constructing a pool, a shed, or making any other significant property modification that requires a permit or understanding association rules if the property is in a subdivision.

It is not uncommon for unexpected things to show up on a title policy, which is why hiring an attorney to explain the title policy and review other title work, including your final closing statement, is a good idea.

5. Consider what each party has to gain from a transaction

Nearly every party you encounter who assists with the purchase of your home has an interest in ensuring that the sale goes through – your loan officer only receives their cut if the loan is approved, an agent only receives their commission if the home closes, and even the title company only makes out on their title fees if the sale is successful. The only party who does not have an interest in the sale going through is an attorney, as attorneys are not paid based on a successful closing, and an attorney’s only focus is to help you, whether that is to help you buy the property or help you in getting out of the purchase.

The excitement of purchasing a home can be overwhelming and emotional, which is why it is crucial to approach the process with a clear head. A disinterested party, such as a real estate attorney, can help you navigate the legal aspects of the home-buying process, avoid potential pitfalls, negotiate effectively, and ensure a smooth closing. Contact our attorneys at Wynn at Law, LLC for assistance with the purchase of your home – we can help you navigate the entire process from start to finish, whether you are represented by an agent or not.

Schedule a consultation with Wynn at Law, LLC today to discuss the home buying process

Contact Wynn at Law, LLC today for a consultation at 262-725-0175 or visit our website’s contact page. Wynn at Law, LLC is based in Southern Wisconsin and has offices conveniently located in Salem, Delavan, and Lake Geneva, Wisconsin.

The post Five Things I Wish I Knew as a First Time Home Buyer appeared first on Wynn at Law, LLC.

In 2019, a class action lawsuit was filed against the National Association of Realtors (NAR) and other national brokerage firms alleging that NAR’s rule (which required brokers to advertise on the Multiple Listing Service (MLS) that a seller would compensate the buyer’s agent) was a violation of antitrust laws and had artificially inflated agent commissions. A settlement in this case has been reached and went into effect on August 17, 2024. The settlement requires NAR and other brokerages to pay $418 million to eligible class members and prohibits advertisements on MLS of agent compensation. Now, MLS participants (buyer’s agents) must enter into a written agreement with the buyer/ potential buyer regarding agent compensation before touring the home.

How do I know if I am entitled to payment under the settlement?

The settlement website states that you an eligible class member who can file a claim for compensation if:

• You sold a home on MLS in Wisconsin between October 31, 2017 – July 23, 2024[1], and
• Paid a commission to a real estate agent/broker in connection with the sale.

Claims must be filed by May 9, 2025, by visiting the settlement website, www.realestatecommissionlitigation.com.

How does the NAR Settlement Affect Wisconsin?

The historical practice of sellers compensating buyer’s agents has been called into question in the wake of the media headlines associated with the lawsuit, which claim, among other things, that buyers may end up paying more. How buyer’s agency agreements will affect the real estate market is uncertain, but it may be comforting to know a few things:

• The standardized offer forms (WB forms) Wisconsin uses for real estate transactions have been recently updated to include a provision for seller compensation to the buyer’s agent.
• Buyers’ agency agreements can be flexible – the term of the agreement may be for just a few days, just for the showing, a flat fee, etc. Buyers should make sure to read the agency agreements, as they are likely to differ.
• The rules do not affect the rights of both buyers and sellers to negotiate. Rather, the new rules will likely make negotiations clearer and more transparent.

[1]  (realestatecommissionlitigation.com)

Contact us today for a consultation at 262-725-0175 or our website’s contact page. Wynn at Law, LLC is based in Southern Wisconsin and has three office locations: Lake Geneva, Delavan, and Salem.

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An easement on a property allows a landowner to grant access to a part of his or her property. You grant access without giving up ownership of that part of the property. It’s a binding agreement. Where we see this commonly throughout southeast Wisconsin is allowing access to a walking path, a driveway, a community pier, or a utility line crossing the property. Without an easement in place for access to such things, anyone attempting to access the path, pier, driveway or utility pole would be trespassing on the property. You can see the legal ramifications.

That means: Talk to your real estate attorney anytime the word comes up. Here are a few spots in which the topic may come up.

If you are buying a property

Two easement issues Wynn at Law, LLC sees frequently are easements for driveways and for lake rights or lake access. When there are disputes over the area of the easement, or the size or the situations for which the property can be used, it can sour a neighborhood. Nobody wants to be ‘that neighbor,’ especially when you’re new to the neighborhood. By the way, if a lender is involved, the lender may take issues with driveway easements. Driveway easements require you to have legal access to your property. Imagine the difficulty clearing up the easement specifics after the closing.

If you are selling a property

When you know of an easement exists, you should disclose that to potential buyers on the real estate condition report. If you do not have a written easement in place or it is not recorded with the Register of Deeds Office, Wynn at Law, LLC can assist you in drafting and recording the easement.

Your relationship with your neighbors is the important aspect of easements. It is important to have a lawyer review easements on your property because it is your property.

Image by Anna Koldunova, used with permission.

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