Wisconsin has its own set of regulations and taxes pertaining to homebuying in the state.
Home seller and buyer laws
In Wisconsin, home sellers must provide a “Real Estate Condition Report” to any prospective buyer within 10 days of accepting a sales or option contract. The report is a comprehensive accounting of the home’s known defects and covers a wide array of categories: structural and mechanical; environmental; wells and septic systems; taxes, special assessments and permits; and land use. There is additional information requested related to the sale of condominiums, including any fees or assessments. Sellers who do not own the property, such as trustees and conservators, are exempted from this law.
Wisconsin is a judicial foreclosure state, which means that lenders cannot foreclose on a property without going through the court system. Lenders can also seek a deficiency judgment to collect any money that is still due after the home sale.
Because Wisconsin is a community property state, marital assets — including all real estate — are owned jointly by both spouses. In a divorce, each individual can reasonably expect to retain 50% of property obtained during the marriage, although the court has the right to make changes to the distribution of assets depending on various personal and economic factors.
Attorneys at closing
Unlike several other states, Wisconsin does not require an attorney to be present during the real estate closing, although buyers may choose to have legal representation at their own cost. Buyers and sellers in this state work with an escrow officer, who is responsible for facilitating numerous aspects of the transaction, including handling any earnest money deposits, managing title services and reviewing all closing documents.
A real estate transfer fee must be paid when a property changes hands in Wisconsin. The fee amounts to $0.30 for each $100 of value or a fraction of the remaining amount, and is typically paid by the seller.
On a $200,000 house, this would equate to $600. The mortgage lender is responsible for disclosing the precise amount of the transfer taxes due once a buyer identifies a property they wish to purchase.
The median property tax rate in Wisconsin is 1.76%, which works out to an average of $3,007 per year for a home worth the median value of $170,800, according to Tax-Rates.org. This is the the ninth-highest rate in the nation.
However, there is a huge variation across counties. Property taxes are highest in Dane County, in which the capital city of Madison is located, at an average of $4,149. The small, mostly rural Iron County has the lowest property tax in the state at $1,520.
Property tax exemptions can help make owning a home here more affordable, and Wisconsin offers several ways to take advantage of this money-saving measure. The state’s homestead tax credit can reduce the property tax burden with a maximum credit of $1,168 for qualified low-income residents.
Additionally, qualifying elderly homeowners can take advantage of a property tax deferral loan program that provides funds that don’t need to be repaid until they move out, sell or transfer ownership of their home. The Voluntary Income Tax Assistance program and Tax Counseling for the Elderly also offer income and property tax help.
Conforming loan limits
Wisconsin’s maximum conforming loan limit in 2019 for a one-unit property is generally $484,350. That ceiling rises to $726,525 in higher-cost counties.
Conforming loan limits are established by the Federal Housing Finance Agency (FHFA) and represent the maximum loan amounts for a mortgage under Fannie Mae and Freddie Mac. A loan through one of these government-sponsored enterprises can mean greater flexibility and easier approval guidelines for buyers. Borrowers who exceed conforming loan limits can take out a jumbo loan. However, these loans tend to have higher interest rates as well as tax consequences; interest deductions are currently capped at $750,000 of mortgage debt.