RE: Real Estate Podcast

Clint C. Galliano, REALTOR® (00:00)
Picture this, you finally found the one. The kitchen is perfect, the backyard is huge, and your offer just got accepted. You're ready to pop the champagne, but wait, the inspection's tomorrow. Suddenly you're terrified.

Ben Harang (00:30)
Hello everybody and welcome to another episode of the Ari real estate podcast. I'm Ben Horang with my cohost, Clint Galliano. How you doing today, Clint?

Clint C. Galliano, REALTOR® (00:42)
I'm doing wonderful, Ben. How you doing?

Ben Harang (00:45)
I'm doing terrific today on a Thursday afternoon. Weather's a little windy. Got some weather coming in this weekend, I think. But life is good. Life is good. So what are we talking about today?

Clint C. Galliano, REALTOR® (00:57)
Alright, today we are talking about home inspection truths. Yeah. So we're going to kind of go over what an inspection actually is and what it isn't. ⁓ How to go through the report without panicking because Lord knows there's a lot of stuff that can make buyers freak out. And some

Ben Harang (01:03)
don't be scared.

Mm-hmm.

Clint C. Galliano, REALTOR® (01:21)
and the three options that you have after the inspection.

All right, so we're going to start out with defining the inspection. It's kind of like a checkup analogy, I guess. So what is it? Inspection is a non-invasive visual examination of the physical structure and systems of a home. Jesus, that's definitely a dictionary definition. So.

Ben Harang (01:48)
Hehehehe

Clint C. Galliano, REALTOR® (01:53)
This is a common thing I get from buyers, especially if they haven't bought recently or at least haven't bought through me.

They're always worried about if the house will pass the inspection. And the main point that I make to them is that the home inspector doesn't grade the home. They're not issuing a passing grade or a failing grade. They're just simply reporting on the condition of the home at that specific moment in time. It's kind of like a medical checkup.

A doctor doesn't fail you if you have high cholesterol. They inform you so you can manage it. So every house has defects, even new construction. I had a new construction house one time that had dented up roof vents, attic vents, some messed up lights in the ceiling that needed to be repaired. And they were repaired.

Ben Harang (02:33)
Mm-hmm.

Right. Right.

Clint C. Galliano, REALTOR® (02:52)
The goal is to distinguish between maintenance items, like clog gutters, and material defects, like a failing foundation, things like that.

Ben Harang (03:02)
Yeah, I'll take some clog gutters before I'll take a foundation that's collapsing. ⁓ and it, and it's all about expectations too. you know, the, said you, you can build a custom house and during the course of construction, things are going to come up and it's not going to be perfect. You have to deal with some issues that come up. So you have to either go right or left when you get to the fork in the road and, and that's what you do.

Clint C. Galliano, REALTOR® (03:05)
⁓ hell yeah. Hell yeah.

Ben Harang (03:28)
So there's nothing perfect. So if you go into an inspection expecting the perfect house, you can end up not buying a house. It's the big surprises we're trying to avoid for the inspection.

Clint C. Galliano, REALTOR® (03:39)
Yep. All right, so why don't you tell us a little bit about the report, Ben?

Ben Harang (03:44)
Well, then the inspection is strictly for the buyer's education. It's broken down into multiple parts and you can see it as an instruction manual for the future. It's going to talk about maintenance items that you should keep an eye on. It's going to talk about systems problems that you may have or the age of the air condition, the age of the roof, the age of the water heater, the age of the appliances in the house. So you can get a feel for

what the expectation is on when those things will begin to fail because they will. They're mechanical and they break. So I tell people the expectation when you buy and resale home is that you have about half life left of all the major

What's the word I'm looking for a client, the major systems in the house, the, the roof, the air condition, the kitchen appliances, the water heater, you know, roof is, is 20 years. you ought to have 10 years left on the roof. Um, AC is 15 to 18. You ought to have seven to nine years left in, that, uh, kitchen appliances, 12 to 15 years, six to seven years left on those. Um,

Clint C. Galliano, REALTOR® (04:30)
Major systems, yep.

Ben Harang (04:54)
Water heater is 12-ish, you ought to have about six years left. So you're going in not expecting anything new on a resale.

you go in expecting it to have some use on it. So you'll have the benefit about half the life. So you'll have six, eight years hopefully in the house before things start breaking. And it will, which is a difference between new construction and resales because you get new appliances in new construction. There's health and safety issues. Home inspectors in Louisiana are required to

point out the possibility of that, that black substance, it might be that four letter word that nobody likes to say might be mold or mildew. then there's structural and mechanical, the roof, the HVAC, the water heater, and then cosmetic peeling paint, a loose door knob, a clogged gutter, things like that. So we, as we go down that list, I get less and less concerned about it. It's the things.

The health and safety issues are the ones that really concern me. Because if I thought there were any health and safety issues in the house before, you probably would not be under contract without knowing those health and safety issues. So if something comes up during the inspection, then it's probably a full stop. Let's talk about how we're going to deal with it. And there are ways to deal with it. And we're to get into that a little later in the episode.

Clint C. Galliano, REALTOR® (06:24)
Yeah, so it's like you're talking about the black stuff that nobody wants to name. In the report, it gets named. It's called possible fungal or microbial growth. You're going to see that. That's right. You're going to see either possible or potential fungal or microbial growth.

Ben Harang (06:37)
It's not that four letter word.

Clint C. Galliano, REALTOR® (06:45)
repeated over and over again and I'd say 99 % of the time is just dust that's collected around the air conditioner vents.

Ben Harang (06:56)
You know, we live in south Louisiana and humid climate.

Clint C. Galliano, REALTOR® (06:56)
Ed Ed

Well, that's always a possibility, I'd say even then it's likely not even mildew. It's probably just dust because you don't look at your ceiling.

Ben Harang (07:08)
Right. People walk with their head down, see the floor, not the ceiling.

Clint C. Galliano, REALTOR® (07:12)
All right. So once you get your report, your agent will help you go through it and tell you the things that are critical. Depending on what software the inspector is using, they'll always categorize if it's a hazard or just a maintenance issue or basically telling you red light, green light, yellow light on

how severe the issue is. And your agent will go through it and help you to at least make suggestions saying, is something that we probably ought to ask for, this is a minor deal, that's an $8 fix, things like that. A lot of times we'll have a shower tub diverter, or tub spout diverter, to turn on the shower that's leaking.

Ben Harang (07:47)
Mm-hmm.

Clint C. Galliano, REALTOR® (07:56)
that's got a significant amount of water still coming out the spout when you turn on the shower. That's like an eight to $10 plumbing part that you can twist off of the pipe in your shower tub and screw on the new one and you're good to go. know, so it's not, if the seller doesn't want to do it, it's not a reason to say, nevermind. Which leads me into the negotiations. So.

You got repairs, you got credits, you got as is. So once you've got the report in hand, then the business side begins. sellers reality is that they're not obligated to fix anything. They can say no to every single request. And just to help remind sellers out there, as is doesn't mean that the house is falling apart and that you're not going to do repairs. The as is means that you're

Ben Harang (08:38)
Mm-hmm.

Clint C. Galliano, REALTOR® (08:49)
whatever it is, as is at the day of closing, that there's no warranties that continue after the day of closing. Big difference. All right, so we typically will submit a list of repairs to ask the seller to fix before closing. If there's stuff that's noted in the report, that's a big deal for the buyer.

Ben Harang (08:55)
Right. Big difference.

Clint C. Galliano, REALTOR® (09:13)
we'll ask them to be repaired. So first we can ask for them to repair it, or we can ask for credits or concessions where the seller will give money at closing for the buyer to fix later. And that's usually depending on your type of loan and stuff that usually shows up as a discount in the price, the sale price. So, or it can be a credit in concessions if there's room for that.

Ben Harang (09:30)
Mm-hmm.

Clint C. Galliano, REALTOR® (09:38)
So the sellers don't have to fix it and they can respond that, I'll fix this, but I'm not fixing anything else or I'm going to fix this, but I'm going to give you some money in lieu of repairs for that or any combination thereof. So it's kind of a mixed bag, but at the end of the day, the buyers look at their response and decide if they want to proceed.

Ben Harang (09:54)
Mm-hmm.

Clint C. Galliano, REALTOR® (10:03)
and they're either satisfied with the response or they can decide they're going to accept it in current condition and move on and continue towards active sale or they're going to walk away, they're not satisfied and they're canceling the contract and that's within their right.

Ben Harang (10:20)
So the the inspection contingency in the purchase agreement is a big deal Just you want to go through an inspection process So the house that you think you want to buy is really the house you think it is and there are no surprises But the the inspection contingency is Really slanted in favor of the buyer so if you get the

inspection report and There's just too much for you to deal with The buyer can unilaterally void the purchase agreement with no consequences to him or her if you get into the negotiations and you ask the seller for something and They say no to anything you ask them for If they say yes to everything they do it we move on to closing if they say no to anything The buyer will always have the last bite at the apple

So from the buyer's standpoint, be realistic on what you're asking for because the seller might just say no. And then you say no and the house goes back on the market. But whether we're in a buyer's market or a seller's market determines how far we can push the seller from the buyer's side. If we're in a buyer's market, you can push back pretty hard. If we're in a seller's market, you probably can't push back at all.

You just need to either need to take the house like it is or not take the house. so it's, it's what, what type of market we're in at the time, what's really wrong with the house, if anything, if it's just cosmetic and you decide not to buy it, you may not be ready to buy a house. but you, you certainly have protections through the inspection period. And once we get through the inspection period, it's not a whole lot of

contingencies other than the appraisal slash financing probably.

So just have realistic expectations of when you go in to buy the house and put it under contract on what to expect from the inspection report.

Clint C. Galliano, REALTOR® (12:18)
All right. I think that does a pretty good job of covering it. So just to kind of reiterate, there's no pass or fail with inspections. An inspection equals an education or assessment of the home. The negotiations are voluntary, not mandatory. And the buyer retains the right to cancel all the way to the end of that inspection process.

Ben Harang (12:34)
Mm-hmm.

Mm-hmm.

Clint C. Galliano, REALTOR® (12:47)
So I'll give you some final advice and then a little bit of homework. So final advice is don't let the inspection scare you out of a great home. But don't ignore the red flags. Your agent will be a wonderful guide on figuring out what red flags are. And if you're not comfortable with what they're telling you, then ask for a second opinion from somebody else.

you need to be satisfied. Don't get railroaded.

Ben Harang (13:19)
It's subjective. The buyer needs to be satisfied, not the buyer's agent, not the lender, not the buyer's grandparents or uncle that bought a house 25 years ago. The buyer or buyers have to be satisfied with it. And it can be subjective. You can point to a reason why. You don't have to point to a reason why. You just need to be satisfied with the condition of the property and the inspections to move forward.

Clint C. Galliano, REALTOR® (13:25)
That's correct.

and just use the process to know exactly what you're buying. And that's the whole point of the inspection process. All right, so that's the final advice. The homework is get your hands on Louisiana 2026 Purchase Agreement, our agreement to buy and sell real estate, and run down to the due diligence and inspection period and read through that and familiarize yourself with it. That will give you the best education

Ben Harang (14:14)
And out of that.

Clint C. Galliano, REALTOR® (14:16)
on what happens in different situations.

Ben Harang (14:21)
And that that forms available on the Louisiana Real Estate Commission's website at LREC.gov and It's a it's a what 11 to 12 pages now Clint ⁓ It's a little it's a little intimidating for the laypeople if You want to give one of us a call to go over it with you would be happy to The more you understand and the better you educated on the process the better off you're gonna be

Clint C. Galliano, REALTOR® (14:32)
I think it's at 11.

Ben Harang (14:46)
and the more likely you'll end up buying your house.

Clint C. Galliano, REALTOR® (14:48)
Yes indeed.

All right. Thank you all for listening. Don't forget to like, share, comment, subscribe. That's rerealestatepodcast.com. We've got links to our YouTube channel, to Ben and I's agent sites. You can listen to episodes right there on the website. Share it with your mom and them. If you find value from this stuff, let all your friends know.

And especially if you know somebody that's looking to buy or sell a home or even become a real estate agent, get them in touch with us. We'd love to help them out.

Ben Harang (15:28)
And if you want to see two guys behind a microphone that have faces for radio, go check out the YouTube version of it. If you just want to listen to us, you can get it on Spotify and iHeart media, iHeart radio, Apple, wherever you get your podcast from.

Clint C. Galliano, REALTOR® (15:46)
any podcasting 2.0 compliant podcast app.

Ben Harang (15:50)
There you go. I know, I know, I know all about that Clint.

Clint C. Galliano, REALTOR® (15:53)
I know that

that that special coded message to the people that do know that's one of those if you know you know type of message All right, that's another one in the can

Ben Harang (15:58)
Yeah. Uh-huh. Uh-huh. All right. I believe that wraps it up.

Have a good one. Thank you.