RE: Real Estate Podcast - Video

Ben & Clint (01:02)
Good afternoon, everybody. My name is Ben Harang with Keller Williams Realty Bayou Partners with me is Clint C. Galliano, REALTOR® with Keller Williams Realty Bayou Partners. Good one. Good one. We're here in Houma today Topic for discussion will be inspections on a home purchase.

Clint and I were just talking about the importance of the inspections and the timelines and how to go about doing it and kind of having realistic expectations on what the report may or may not indicate about the house. So we'll let Clint go ahead and start off. All right. So typically when you're using inspection is when you're working with buyers. So buyers are the ones that are

probably most interested in an inspection, even though sellers can use them to get an idea of things that they might want to fix when they're getting ready to put their property for sale. But it's typically your buyers that get an inspection done once they get a property under contract. The main purpose of a home inspection is so that the buyer knows the condition of the home or what condition the home is in that they're purchasing.

so that they know whether they have some deferred maintenance that they may need to attend to in some way, or if there are any deficiencies or any repairs that need to be made, or if there's any type of hazard in the home that they need to get fixed prior to closing on the home. In other words, asking the seller to fix the home. And those are the main...

reasons for a home inspection as a buyer. It's not a tool to negotiate price. It's not something to beat the seller up over. It's for the buyer to know what the home, what condition the home is in when they're under contract. So if we have a new construction house and we have a 30 year old house, should our expectations be the same?

as what to expect from an inspection report.

I would say yeah, because it's going to give you the condition of the house. Now, as far as the items that are listed in the home, then yeah, you likely are not going to have the same items, but you still have the same expectation from the report. A 30 year old home, you're going to have what you expect the condition of a 30 year old home to be, and it's going to report on that.

a new construction home, they're likely to point out anything that was not done correctly or maybe items that were installed or damaged, things like that. And those are things that when you're looking at a new construction home, you want those to be repaired, fixed, cleaned up prior to closing with that home.

Whereas a 30 year home, you may want to look more at, you know, is this something that will affect the appraisal or is it something that I can take care of at a later date? And when I said, should we have the same expectations, what I was getting at is on a new construction, you know, the age of the air condition, the water heat of the roof, the expectation is all that is new.

On a 30 year old house, might have a 20 year old roof, a 15 year old air condition, a 10 year old water heater. On a 15 year old and eight year old air condition. Mix and match inside. So my point is if you're going to be buying a 30 year old house, don't have the expectation that the report will show it's a new house. Things like GFCI receptacles within six feet of a water source.

may or may not be in the house. That's easy enough to address. Not having grounded receptacles and how to deal with that. From a safety standpoint, the idea about rewiring the house is not realistic because when that house was built, it was built to code and that's how it was done. Well, now we have additional safety features with the GFCI.

So without the ground wire, you can put in a GFCI and if there's a problem with the outlet, the GFCI receptacle will trip without rewiring the house and you have the same safety features. the expectation of a 30-year-old house would be different than the expectation on a new construction. What about timelines?

We write a purchase agreement and we have X number of days to complete the inspections to, to decide if we're going to proceed or not with the sale. kind of, kind of talk about the importance of the timelines. So by default, well, first off, I'll say it depends on the buyer and what the buyer's goals are. I tend to write a 14 day due diligence and inspection period.

That gives us time if we do find anything that warrants further investigation, we have time to bring out the appropriate professional, whether it's HVAC, electrical or plumbing or even foundation to get that inspected and still be within that inspection and due diligence timeline. If the buyer, and that's for an occupant.

buyer that's going to buy to occupy the home. If it's a buyer that's an investor, they're a little more sophisticated. They know what they're looking at. Then they use the due diligence and inspection period as a negotiation tactic to be able to say, look, give me five days for inspections and I'm good. And so

with the thinking that if a seller is looking at a similar offer, one wants 14, 15 days to inspect the property and the other one wants five days or zero days to inspect the property and close within 30 versus close within 45. You know, they feel that that's more of a better negotiation tactic. So let's talk about as is.

People want to sell their house as is, they buy it as is. I tell people, you're going to sell your house as is, as is the date of the sale. They're not buying the house as is, as it is right now, unless they agree to it. And that's what the inspections are for, to make sure that they go on into what could be the largest sale of their life, purchase of their life, that they know what they're getting.

I tell people I want both the buyer and the seller to be comfortable with what they're selling, what they're buying in a condition of the house that the house is in. So if we, in the grocery store and you run into somebody, you don't need to turn around and walk out because you're concerned about what they're going to say. You know, there's nobody that I, that I need to walk out of a grocery store to avoid because a deal went south. I've been doing it for 30 plus years and

can still talk to everybody I've ever done business with. So we have to get to the point of the sale to have the as is clause included in the sale. The inspection period gets us to that point to give the buyer a comfort level with the property. So I've got a slightly different take, but it's generally along the same vein.

As is is as is where is and typically you'll see that stated in the act of sale. And it basically means that there's no one to given by the seller to the buyer. That as long as they've gone through their processes, their inspection, their due diligence, that once the paperwork is signed and ownership is transferred, the seller is not liable for.

anything that goes on with the property past the point of sale. And it's kind of funny because sellers get tripped up on it. They think, well, it's as is and that, you know, we're not going to do any repairs. We're not going to do any improvements. And that's not necessarily what that means. It's not as is as of the date of the purchase agreement is as is as of the date of the sale. Correct. So I guess we beat that one up enough for the

for this podcast, Clint. You know, our goal is to take a topic and do a deep dive into each topic on a regular basis. So we're just getting started, but there's a lot more to come. Hopefully you enjoy it and we'll see you next time. This is Ben Horang with Keller Williams Realty Bayou Partners in Houma/Thibodaux and... Clint C. Galliano REALTOR®. Keller Williams Realty Bayou Partners, Houma/Thibodaux

Down the Bayou (DTB) wherever you need help. All right. Y'all have a good one. Thanks.