RE: Real Estate Podcast

Clint C. Galliano, REALTOR® (00:00)
You found the perfect house. Now comes the paperwork. This isn't just a receipt, it's a rule book for the next 30 to 45 days of your life.

Ben & Clint (00:23)
Good afternoon, everybody. Welcome to another episode of the RE Real Estate Podcast. My name is Ben Harang I'm here with my cohost, Clint Galliano Clint, good afternoon. How you doing today?

Clint C. Galliano, REALTOR® (00:37)
I'm doing wonderful, Ben. How are you doing?

Ben & Clint (00:39)
I'm doing terrific. The weather is finally cooling off. Didn't get a whole lot of rain as last weather pattern that came through. Sun's not quite shining, but it's in the 50s. Everything's good. So life is good. Life is good. What are we going to talk about today?

Clint C. Galliano, REALTOR® (00:57)
All right, so we're talking about the Louisiana Purchase Agreement for Real Estate, or as it's officially titled, Louisiana Residential Agreement to Buy or Sell. This covers the price, the inspections, the financing, terms and conditions, all the things involved when you're purchasing a home. And as a little bonus,

because we're going to start using a new version, an updated version, in January of 2026. We're going to cover some slight details that have been updated for that 2026 version. So why don't you get us started here on the first part of the property purchase agreement.

Ben & Clint (01:40)
They tweak it every two years so the new ones out and some things have changed materially some things have just Changed in where they are in the agreement. So we'll try to hit some highlights. So the first thing When you buy a house, you're not buying the address you're buying The legal description if you're buying a house at one two three Main Street. That's not the legal description you're buying lot one block two of

Greenacre subdivision or whatever the subdivision name is. So a lot of people get caught up on the address if the address is wrong or numbers transposed or something. It's the legal description is what you're actually buying. So we try to make sure that part is as accurate as we can make it. ⁓

Clint C. Galliano, REALTOR® (02:28)
Yeah,

the only people that use the municipal address is the 911 system and the postal service and your friends coming visit you. Everything else uses that legal description to describe your property.

Ben & Clint (02:31)
Mm-hmm.

Yeah, you own the legal description. You don't own the address So There's some movables in there too if if you want the refrigerator or want to wash and dryer Don't assume that it's gonna stay in the house Though those are what we referred to as personal property you don't need any tools to disconnect them you unscrew the the water to the washer and unplug the

washing machine and dry and you can go out the door with them same with the refrigerator so if you expect those to stay in the house make sure they're in the agreement other things like blinds the window coverings the attached TV mounts that are permanently attached stay I tell people if you need a screwdriver stop we need to talk about it

they'd be considered permanently attached in part of the structure itself. When you buy the legal description, you buy the legal description and any improvements on the property.

Clint C. Galliano, REALTOR® (03:40)
We've run into problems in the past where surround sound systems or speakers installed on the patio that the buyers are expected and legally entitled to getting that the sellers have taken with them and had to return.

Ben & Clint (03:48)
Mm-hmm.

Right, right. So that's, that's, that's a, that can be a problem. So just, just have some clarity. If you expect it as a buyer, if you expect it to stay, write it in a purchase agreement. If you're a seller, make sure what they're asking that they want you to leave for. Um, it's better than negotiated on the front end and figure it out than it is to

Have a buyer show up and say, where's my refrigerator? Where's my washing dryer? Where's my surround sound? Well, it's not included. Well, I thought it was. Those are never good conversations to have. Next segment is the mineral rights. And that's if there's any oil and gas or mineral deposits that lay beneath the ground of the legal description that you buy.

they can be a hundred percent of those rights can be transferred zero percent can be transferred or anything in between just make sure that if you're going to transfer the mineral rights are you going to buy the mineral rights that is spelled out there's a spot in the purchase agreement to check it off so don't don't overlook that one

So how about the next section Clint?

Clint C. Galliano, REALTOR® (05:11)
Alright, the next part we're going to cover is the terms. So price, timing, and big ifs. So next thing is the price and the closing date. So price is obviously the price that it's being purchased for. That's the amount of the contract or the purchase agreement. The next is the act of sale. This is the

date that you expect to sign the act of sale or otherwise known as the closing date. Occupancy is usually granted immediately at closing unless you have some type of agreement otherwise, whether it's pre or post-occupancy. And if you've listened to previous episodes, we don't advise that. We advise against that.

just because of the risk on both sides. The next, we're going to cover some contingencies. Contingency number one is sale of the buyer's other property. So that is where a buyer has to sell their current home before they can purchase a new home. I've got a listing right now that's kind of tied up because the buyer's

Ben & Clint (05:57)
on both sides both ways

Clint C. Galliano, REALTOR® (06:19)
need to sell their home and their home is not selling it used to be that this section was on page 9 of the

most recent purchase agreement now it's been moved to front and center on page three because it lets you know right away as you're going through this whether it's a weak offer you know contingent or a ready-to-go strong offer. All right the next contingency is the financing contingency.

So that is where we mark off whether you're purchasing with all cash or whether you're using financing that you're promising to get a loan. The

good faith requirement is that you're specifying an amount of time when the buyer is going to fully apply for their loan.

Typically, we put three to five days. And that is mainly because you don't want to say, well, I'm not going to apply for my loan for two weeks. well, yeah, I want to buy it. I just haven't talked to my lender yet. No, sellers don't want to hear that. So that's why we specify that that loan application will be made in three to five days.

Ben & Clint (07:27)
Mm-hmm.

Clint C. Galliano, REALTOR® (07:34)
And typically once the buyer is conditionally approved, the lender will let the buyer's agent know and the buyer's agent can pass that on to the listing agent and the seller. All right, Ben.

Ben & Clint (07:45)
Right.

There's some privacy issues with that, but the agreement gives the lender the authority to acknowledge to the buyer's agent that the loan has been applied for formally. They have all the documentation and everything that needs to be signed has been signed. People sometimes miss that. Like Clint said, I didn't get around to it yet.

you need to get around to it like now when when that's accepted. So I'm going to talk about the skin in the game. The buyer is is asking the seller to take their house off the market and bet that the buyer can buy the property. The buyer at this point, if we get an accepted agreement, has to either sit down and write a check, do a wire transfer, do

Whatever it is that you need to do to transfer the amount of the agreed upon good faith deposit in a purchase agreement to the listing broker the The selling broker or the title company whoever you agree is going to hold it But that's something I think it says you have 48 hours to get it to and if you don't get it to them That's it you ⁓ It's 72 now. Okay All right. I'll call you out. You call me out good

Clint C. Galliano, REALTOR® (09:03)
take it 72 hours.

Ben & Clint (09:09)
But there's a finite timeline on when you need to have that deposit in. it's not a, I'm going get to it when I get back from vacation next week. No, you get to it now, just like the loan application. So if we do these things timely, have a much better chance of closing on time and both the buyer and

and the seller are much more agreeable at the closing. Do you lose your deposit? Generally, if you abide by the purchase agreement itself, you do not lose your deposit. If you end up buying the house and it goes through, you get credit for the deposit at the sale. So if you put up a thousand dollar deposit and you need to

need to bring $10,000 to closing, you only bring $9,000 to closing and the $1,000 deposit is applied to cash close at the closing. If the house doesn't appraise and we can't work it out with a new sales price and the buyer doesn't agree to pay above the appraised value, you get your deposit back. If

Your inspection goes sideways and you're not comfortable with the current condition of the house within the inspection period. You get your deposit back. If you lose your job or if conditions change or something changes and you don't, you're not able to make the loan. You get your deposit back. pretty much within the inspection period, there's no reason you don't get it back. outside of that is financing.

And appraisal is why you would, you would get it back and not by the house. Um, but sometimes we've had people, we get through the whole thing and we're a week away from closing. Everything's done. And we get a phone call and say, you know what? I changed my mind. I found another house. Uh, those conversations don't go well, but we typically said, before you do anything on the house, I think we need to have a conversation.

And we explained to them that if they do that, it's out of our hands. We have to back out and they're about to get run over by a freight train when the seller can take legal action against them and then they won't be able to buy anything. and they think about that and they generally say, okay, when we go inside and let's, let's go buy the house, they're better off buying the house and reselling it than not buying the house rather than violating the.

the purchase agreement itself. And I guess that's about it on it on a deposit is it's really just to show a good faith effort on the buyer that that you're really serious about buying the house. And in today's market, the way the industry is changing, it's meaning less and less. And it wouldn't surprise me in the next edition or two or three of this purchase agreement, the deposit just comes out completely.

So.

Clint C. Galliano, REALTOR® (12:07)
I can see that happening.

Ben & Clint (12:09)
It just it's it's making less sense to have the deposit because they have all the reasons you get it back anyway It's the only only thing it really does it shows that the bias serious enough to let somebody else hold some money for him And I guess that's worth something So, all right, how about the buyer safety net Clint?

Clint C. Galliano, REALTOR® (12:25)
All right.

All right, so the next section covers inspections. And that takes up two pages on the purchase agreement. Most of it is exposition. But the main thing is you have a due diligence and inspection period. And that allows you to get a home inspection. And if you need to get

Ben & Clint (12:33)
Hehehehe

Clint C. Galliano, REALTOR® (12:49)
further, more detailed professional opinions on any system in the home that allows you time to get that done. Typically, we ask for 10 to 14 days to get that done, and we can get most of that done, especially in today's market, easily within that time frame.

back when the market was hot and heavy during the COVID era, it was hard to be able to get a schedule an inspection any sooner than 10 days out, just because they were so busy running around doing inspections. Now, usually within five to six days, you can have an inspection done and the report in your hand. So that's not shabby. And that gives you...

Ben & Clint (13:26)
Mm-hmm.

Clint C. Galliano, REALTOR® (13:41)
Like I say, it gives you time to bring in other stuff. And to be clear, for your inspections, any inspections you get done as a buyer, you're responsible for covering those costs, unless it's something that you negotiate for the seller to do. So you've got two options if you don't like what comes back as a result of your inspections.

So option one, you can terminate. If the house is a disaster, you can walk away immediately and get your deposit back. And it's not just about the condition of the home. If it turns out that you thought it was one school district and it's not that school district, if you're coming at it from a family perspective.

then to attend a certain school and then you realize or find out during your inspection period that it's not that school, then you can walk away and get your deposit back. If it's strictly about the condition of the home, then you've got option two where you can negotiate repairs. And at that point, it turns into the 72 hour dance. So.

Ben & Clint (14:39)
Mm-hmm.

Clint C. Galliano, REALTOR® (14:56)
The buyer sends a response to inspection and a list of repairs requested. The has 72 hours to say yes, no, or here's what I'll do. And the buyer has 72 hours to accept the seller's response or walk away. Word of warning.

if you miss a deadline here, you might accidentally kill the contract because part of that two pages that this section takes up is spelling out the ways that if you don't follow the rules and follow the deadlines, then the deal is basically dead or you owe money depending on what it is. But if you don't respond within 72 hours,

On either side, the deal is basically dead and the contract is null and void.

Ben & Clint (15:40)
Right, right. So from a buyer's perspective, if there's somebody else that wants that house and you fail to respond within the 72 hours, the seller can pull the plug, give you your deposit back and sell it to somebody else without you agreeing to anything. And that's after the house is under contract when you had an acceptable purchase agreement on it. If you don't live within the timelines in the contract.

That can happen. And I've seen it happen with somebody selling, got tired of fooling around with a buyer that was being picky. And they just turned around and sold it to somebody else. And a buyer was like, wait, I thought I was buying a house. Well, you were, but you didn't, you didn't follow the purchase agreement. the seller canceled it and sold it to somebody else. So if you, if you don't want that to happen, and I suggest you don't, don't, don't fool around with the timelines within the purchase agreement.

All right.

Clint C. Galliano, REALTOR® (16:31)
Yes,

indeed. All right, let's move on to appraisals and warranties.

Ben & Clint (16:36)
The value and the condition. The purchase agreement has the price that you and the seller, you and the buyer have agreed to. If that price is $300,000 and everybody's happy with it and we're moving right along and we get through the inspections and the appraiser comes out and all of a sudden the appraiser says the house is worth $280,000. We have a rut roh moment.

Um, one of a couple of things is going to happen either. The buyer is going to put up an additional $20,000. The seller is going to go down by $20,000 on a sales price or some number in between that the buyer and the seller can agree to, or the deals off. If that happens, the buyer absorbs the inspection cost and the

cost of the appraisal and the seller is free to move on and put the house back on the market.

the deposited return to the buyer and it's as if it never happened. We really try to work through those problems. If it gets appraised for 280 and we have an agreement at 300, there's a reason both sides agreed to 300. There's a reason it came back appraising for 280, which is what the appraisers

thinks it's worth but the market may think it's worth it's worth more. I explained it to people. We as agents and buyers are looking into the windshield of the car looking forward. The appraisers can only look through the rear view mirror to see what's actually closed. So buyers can feel pressure to buy a house that the appraisers don't yet see. So that might be a reason why a buyer would be willing to pay more than

the appraised value because in the buyer's mind it's really worth that. And the market, the documentation just hadn't caught up with it. So that's how we handle the appraisal. It's something we call the as is clause. And that's two little words, as is, that is misunderstood a lot. ⁓

Clint C. Galliano, REALTOR® (18:51)
I'm selling

my home as is. I'm not doing nothing to it.

Ben & Clint (18:52)
I'm selling my house as is

The as is wording is as of the date of the sale We haven't dealt with the contingencies in the due diligence period yet So we're not selling it as it is today. We're selling it as it will be at the date of sale So we still have to get through the due diligence Period and the appraisal if the appraisal

calls for any defects that need to be taken care of before the lender can use the appraisal to secure that loan. So we do it as is and I'm gonna throw out a term that most people don't know. The as is, the legal term is waiver of redhibition and rights. It's the...

The redhibition is rescinding the sale, which is never a good thing. There's a law in Louisiana where you can actually rescind the sale and that gets waived when you buy it as is. So you buy it as is unless there's fraud involved. If there's fraud involved, then you know, we're out and whoever commits the fraud has a problem. So that's something we don't play with. All right, Clint, looks like we're getting close to the finish line.

Clint C. Galliano, REALTOR® (20:07)
getting there.

The couple of sections cover title, final walkthrough, and defaults. So, Merchantable Title. this is where basically we give some extra time where if the title is not merchantable, in other words if it has leans or something, then

by default it extends the closing date by 30 days, giving the sellers 30 days to get the title cleared up. A lot of agents will automatically still do a closing extension if that situation does come across, but it's kind of like a pop-off valve. It doesn't kill the deal. It gives you time to get whatever issues are corrected.

the title attorney say get any defects corrected so that the title is merchantable and can be sold, which is what that means. Final walkthrough.

Ben & Clint (21:00)
Hmm

Clint C. Galliano, REALTOR® (21:08)
It also states that the buyer will have the opportunity at least five days prior to closing to do a final walkthrough to verify that repairs were done and that the house is in the same or better condition than it was when, than when they wrote the purchase agreement. The last section, or not saying last, the next section is,

defaults or breach of contract. If the buyer defaults, states that the seller keeps the deposit and can theoretically sue for 10 % of damages or specific performance forcing you to buy. Now this is if you default and it's outside of any of the contingencies previously discussed. If the seller defaults, the buyer gets their deposit back and can sue the seller for 10 % of damages.

Ben & Clint (21:53)
Hmm.

Clint C. Galliano, REALTOR® (22:01)
Alright, now we get to the good stuff. Getting paid.

Ben & Clint (22:04)
All right, getting

paid. Who pays us agents? Our world changed August 17th, 2024. If you've been in the market since then, you've probably had a conversation about a buyer representation agreement for a buyer's agent to represent you in the purchase of a house. And that comes with a fee. A big change to the

2026 Louisiana purchase agreement is that wording is now within the purchase agreement itself. A lot of times a buyer will ask the seller if he pays $300,000 for the house to pay a certain buyer representation fee to his agent from that $300,000 in proceeds.

And sometimes they agree to do it. Sometimes they don't. Sometimes we can work it out. Sometimes we can't. But the purchase agreement itself says who's going to pay the buyer's agent. The listing agreement that the seller has with the listing agent outlines what the seller is going to pay the listing agent. And a couple of things about the buyer representation and the

listing side. Both, any agents that are paid within the transaction have to be disclosed to both sides. So the seller knows what the buyer's agent is getting paid, the buyer knows what the listing agent is getting paid. It's transparent, it's see-through, there's nothing hidden. The deal doesn't close and then somebody writes a check for a fee that was not disclosed on the

closing disclosure. all of that is in the closing disclosure. Also, as buyer's agents, we cannot receive or get paid more than what's in our by representation agreement. So if somebody has a bonus, a lot of time the house is sitting for a little too long and people get a little concerned. So they say they'll give a thousand dollar, $2,500.

selling agency bonus to whoever sells the house. Well, if it's not in your by representation agreement with your agent, the agent cannot take that bonus. You and your agent can work out a deal on the front end on how you want to handle that between you. But if the

If that bonus is more than the by representation agreement has in it, the buyer's agent is prohibited from accepting that compensation. So, that, that talks about how we get paid and who pays us at Clint.

Clint C. Galliano, REALTOR® (24:50)
All right. So.

In summary, main thing is dates matter. Time is of the essence. This is a statement from the purchase agreement. Missing a deadline can cost you the house. Your deposit should be returned if you miss a deadline, unless it's one that's detrimental to you.

Be aware that the sale of other property contingency is now at the front of the contract and appraisal is at the back. It used to be flip-flopped. So it's not so much for y'all to be aware of, it's more logically placed to where like versus like information and portions of the purchase agreement are grouped together. And the biggest thing is don't panic.

Ben & Clint (25:21)
Mm-hmm.

Clint C. Galliano, REALTOR® (25:40)
document protects you as much as the seller and provided you stay within your contingency periods and keep aware of the dates and deadlines.

As far as homework, because we like to give homework, talk to your agent. Ask them for a copy of a purchase agreement to look over so you can be familiar with it. know a lot of times when we send offers, we send it through some type of digital document signing software and it just jumps to the initial and signature fields that

all of these details, know, like just the inspection period. There's one field saying how long the inspection period is and two pages of consequences if you are, you know, what happens when things don't go the right way. So it's worth reading that and if you're not working with an agent you can go to LREC,

LREC.gov. ⁓ go to LREC.gov, and you should be able to find a copy of the purchase agreement to download. And then that way you'd have your own copy. But it's easier to find an agent, preferably me or Ben.

If not, find one you're comfortable with and ask them for a copy of the purchase agreement so that you can be familiar with it. So that's your homework. I think we did a decent job of covering this

Ben & Clint (27:05)
one thing

I want to point out is and this is Monday We usually do this on Wednesday, so we get we get a break. We're just coming back from the weekend There are protections in that purchase agreement And whatever that inspection period is that is agreed to whether it's seven ten fourteen fifteen days You basically have a free look at the house and I tell people I said you can change your mind

within that inspection period if you don't like the paint on the wall. But until we get it under contract, we can't get into the house to see about the mechanics and what's right and what's wrong with the house. So that allows us to get in there to see it to make sure that it's is the house that the buyer thinks it is. I know it's a big step, but but understand that

just because it goes under contract doesn't mean you're actually buying that house. We hope you do, but there are provisions in a purchase agreement that protect you from somebody trying to make you buy the house you don't want to buy. So that's just a little, a little side note on.

Clint C. Galliano, REALTOR® (28:08)
That's like I tell my

clients, you're never obligated to move forward with something you're not prepared to because of the contingencies.

Ben & Clint (28:16)
There you go. All right, Clint, enjoyed it, man. Have a good one.

Clint C. Galliano, REALTOR® (28:21)
All right, YouTube in.