How Do You Know If Inspectors Are Doing Their Jobs?

How Do You Know If Inspectors Are Doing Their Jobs?

Episode Transcript

(00:00):
Hey, it's Michael Blaze. Welcometo your Home three sixty, the show
where we talk about everything that hasto do with your home. Your Home
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that already and they save themselves onethousand dollars. On today's show, I
have a question from a listener thatwe'll get to here shortly. It's about
home inspections. I'll also get tothe latest real estate news coming up a
little bit later, but first,let me give you this piece of advice.
It was kind of weird to me. I was chasing ghosts in my

(01:49):
house. So this is strange,and you know, I should have an
electrician check this out. It wouldprobably be the smart thing to do because
I'm no electrician. Now. Ican, you know, find my way
around wiring a little bit, butyou know, I'm not up to date
on the codes or safety protocol oranything like that when it comes to electricity.

(02:15):
But I kind of ran into thisghost or demon, if you will,
with my house. My wife keptcomplaining, She's like, my plug
doesn't work in the bathroom, andit's you know, it's an older house,
so it doesn't have GFCI plugs inthe bathroom. Now. A lot

(02:35):
of times, especially in today's newhouses, you'll find the GFCIs right in
the breaker box, so they stoppedputting them on the individual plugs most of
the time anyway, and that circuit'sjust protected right in the breaker box with
a GFCI. So my house doesnot have that because it's an older house.

(02:57):
And it was the damnedest thing.The plug kept going out. And
then I noticed our master bathroom offof our bedroom. You call it an
end suite now, I guess it'spolitically incorrect to call it a master bedroom.
I noticed that the power outlet inthere, the lights, the fans,

(03:17):
everything works fine, but the poweroutlets kept losing power, and so
our electric toothbrushes and you know,the electric razors and things like that would
not work. And it was bafflingme because I'm like, okay, well
maybe the receptacle went bad. Iwent and replaced the receptacles. I'm handy

(03:39):
enough to do that, and itseemed to work. And then all of
a sudden, she comes to meand she's like, it's not working again,
and I'm like, what could thisbe? And I you know,
in my head, I'm like,did some rodent chew the wire out?
Or is it shorting out? Isthis a dangerous thing? And it dawned

(04:00):
on me one day. We havethese lights out in the backyard, so
we have some trees lit up inthe spotlights and a water fountain back there,
and I did put a GFCI outsidethere, and originally did not have
one, and just for safety purposes. And sometimes when it rains, you
know, there's so many things pluggedin and there's an extension cord and whatnot,

(04:25):
it'll trip that GFCI. And soI looked out the back window of
the house, out the door wall, and I noticed the palm trees weren't
lit up and the yard lights werenot on. And I'm like, oh,
well, it must have tripped againafter this heavy rainstorm that we just
had. And I went out andI reset it. And then I was

(04:45):
like hmm, And so I wentinto the bathroom and I checked the receptacle
and yes, it worked, andit's worked ever since, and that GFCI
has not tripped ever since. SoI'm like, Wailah figured out the problem.
Now here's the next problem I have. I don't know why that circuit

(05:09):
would be wired through that GFCI,so they must have jumped it from when
they built the house from the outdoorreceptacle and then back to the bathrooms.
And I don't know if they didit on purpose that way or if they
were just taking shortcuts. I don'tknow if it's safe or not. I
mean, it's lasted for thirty yearsthat way now or longer. But I,

(05:34):
you know, have no idea ifthat's safe or not, or if
it's proper or not. So Ineed to get an electrician out there to
take a look at it. SoI just thought I would bring up that
story in the spirit of, youknow, sharing these little things that happen
in these you know, aha momentsthat you have. If there's any kind

(05:56):
of problems that you're having, it'sbest to have, you know, so
licensed electrician to check it out andmake sure that it's safe. But something
like this also might help you whileyou're trying to troubleshoot some particular problem that
you're having, because I certainly neverexpected that the receptacles in the bathroom were
not working because the outside GFCI wastripped. So that little story, right,

(06:23):
there's a great segue into the questionthat I received from a listener.
I got it in my real estateemail, which I suppose they found on
my website, Michael Blaze realestate dotcom. I have a website Michael blazerealestate
dot com and you can go thereand my phone numbers on there, my

(06:44):
email address and all that stuff.So if you have any questions, you
can do the same. But Mattwrote Blaze, how do I know that
my home inspector will catch every hiddenproblem with the house that I'm about to
buy? Well, Matt, youcan't be sure that your home inspector is
going to catch every little problem.I think most home inspectors would tell you

(07:09):
that they're generalists. Would a homeinspector catch that problem right there? And
that's why I told that story.Probably not, And you know why,
because if it was working at thetime that they inspected the home, there'd
be no reason for them to investigateany further. You know, they're not

(07:29):
tracking all the every piece of wirethrough your home and seeing how it's wired,
and you know, tracking it throughthe entire house. I mean,
of course, they check your circuits, they put the tester into the receptacles
and make sure everything's working. Butif everything's working, end of a story
for them, right, And ofcourse, because you know, they're not

(07:53):
electricians either, or electrical engineers orany of that. They're generalists. So
they see mostly what you know,the things that you and I would see
is wrong with the house. Now, they're trained, you know, with
more of an eye to detail.But if that particular instance happened during a

(08:13):
home inspection, the only way thatthey would know there was a problem is
if they checked the receptacles in thebathroom and saw that they weren't working.
Since they're working now, there'd beno reason to look any further into it.
So if you want a very robustand super detailed inspection of your home,

(08:39):
you know, then maybe you shouldgo beyond to home inspector Matt and
hire somebody that specialized in each system. Now that's going to be money expensive,
and that's why most people skip thatstep. They hire a home inspector.
The home inspector goes through the home. As a matter of fact,
I'm going to have I got thisquestion, and I received it too late

(09:01):
to have to book a home inspectorfor this week, but I'll have one
coming up here in the next fewweeks. Sometime I'll have a home inspector
in and we'll go through exactly whatthey do and why they do it,
and the whole procedure. But toanswer your question, Matt, if you
want a real specialized inspection, it'sgoing to cost you a lot of money

(09:22):
because you're going to want to goget a plumber to inspect your plumbing system,
an HVAC professional to inspect your HVACsystem. You're going to want to
hire an engineer to make sure thatthe house is built correctly and that the
foundation is okay, and you mighteven want a foundation specialist in there too,

(09:43):
and the list goes on. Sofor every system in that house.
If you're willing to pay and youwant to make sure that there's no hidden
problems, absolutely sure, then you'regoing to want to hire each of those
individuals. It's going to cost youa lot of money. And as I
said, most people prefer not tospend that money. They just rather have

(10:05):
somebody that's trained in looking for generalizedproblems, which would be a home inspector,
and stick with that. And ofcourse you would hope that there would
be some kind of evidence that revealeditself during the home inspection, so the
home inspector can make note of it, put it in their report, and
then you can go from there.If there are specific problems, and say

(10:28):
there's a fireplace issue. You know, there's an extra soot noticed on the
ceiling or you know, up infront of the fireplace, or whatever the
case might be, then you'd wantto call in a fireplace or a chimney
specialist. You know, maybe there'sa problem with the HVAC where it's acting
hinky and that was discovered on theinspection report. So you can always still

(10:54):
use those specialists ala carte after youhave the home inspector and done by a
home inspector, but beware that thehome inspector may miss it, and that's
not necessarily their fault. Like Isaid, if the system appears to be
operating properly, then why would theylook into it any further? And this

(11:15):
brings me to another point on homeinspections. I was just asked the other
day about this specifically about the protocolthat you would follow when you're requesting a
home inspection while you're doing the initialcontract. So our standardized contract that we

(11:35):
use, which is from the SouthCarolina Association of Realtors, you used to
have three choices when you were submittingan offer to buy a house, and
you would either request a repair procedure, you would request due diligence, or
you would mark as is we nolonger do that. It's no longer in

(11:56):
the contract that way. It's nowa due diligence contract only, so you
are in due diligence no matter what. And then you get to decide,
well, you get to negotiate withthe seller. You know how long of
a period you're going to have fordue diligence, and not all the time,

(12:22):
but sometimes it comes with a pricecalled a termination fee, so everything's
negotiable. Some people try to getaway with putting zero for the termination fee,
and if you just have a youknow, a couple of days of
due diligence, well then maybe youcan get away with zero. It's up
to the seller whether they want toaccept that or not. But the longer

(12:45):
the inspection period, the longer thedue diligence period, the higher your termination
fee should be, because under duediligence you can terminate that contract for any
reason at all. The due diligenceperiod is not just for inspections per se.

(13:05):
You might want to review the HOAdocuments, You may want to pursue
a zoning variance. You may wantto get estimates on adding an addition to
the home, or adding a swimmingpool, or everything under the sun that
you might want to do, youcan conduct during your due diligence period,

(13:31):
and then if it doesn't work,or even if you just change your mind,
you can exercise your right to terminateunder due diligence as long as you
do it within the due diligence period. And for that very reason, there's
a termination fee tied to your duediligence period. Again, it's negotiable.
But if you're going to for allintents and purposes, have the property off

(13:56):
the market, I mean it's it'sstill usually it goes active content and it's
still marketed as such, but youknow people are going to not be so
interested when they already know that there'sa contract on that property, and so
therefore you know you're for all intentsand purposes kind of taking it off the

(14:16):
market. Right, You're showing everybody, I have a contract on this property,
and most of them, if notall of them, are just going
to move along and ignore that property. So the longer that period of time
that it stays active contingent and undercontract, and then you have the potential

(14:37):
to back out for any reason youwould like. The seller wants to be
compensated for that period of time,so it makes sense and it's all negotiable.
So while we're on the subject,let's talk about how you should handle
your due diligence period. A lotof people forget, and I have,
even real estate agents all the time. Why is the due diligence period so

(15:03):
long? Not in every case,but in several of them. I've been
asked that question, and it's becauseto me, it's kind of a flaw
in the way that the contract worksbecause you have to you only have until
time is of the essence. That'sone of your main things to remember in

(15:24):
real estate. If you have atime and a date, whatever you agreed
to do by that time and datebetter be done by that time and date,
including due diligence. So once yourdue diligence period is over, it's
over, and that includes any kindof negotiation with the seller. As soon

(15:46):
as it is due diligence terminates yournegotiations done. So if you anticipate that
you're going to have to negotiate something, or if you just want to even
if you don't anticipate it that there'sgoing to be a problem, but you
want to make sure that you leaveenough room that if there is a problem,

(16:06):
you can properly handle it. You'regoing to need some time to send
a counteroffer to the seller. Youmight ask for repairs, you might ask
for money in lieu of repairs,however you choose to handle it. If
you counteroffer the seller, and especiallyif you're asking for repairs, or maybe

(16:27):
even if you're asking for money inlieu of repairs, the seller is going
to want to get estimates right becausethe seller is not going to say,
okay, I agree to fix thisplumbing issue or this HVAC issue without knowing
how that affects their bottom line,how much it's going to cost them.
And remember, your negotiation has tobe done by the time that due diligence

(16:52):
expires. If it's not, thenessentially you're greined to buy the house.
So you have to leave enough timefor the seller, to give yourself enough
time to present the counter offer tothe seller, and then give the seller
enough time to figure out what thehell is going on here, how much

(17:12):
is this going to cost me?And to get those estimates and then negotiate
it in all within that due diligenceperiod. So you want to put some
extra time on the end. UsuallyI do to make sure that you have
enough time to do everything that youneed to do and to protect yourself during
that due diligence period. And alot of people don't understand that. Like

(17:33):
I said, I even have realtorsreal estate agents say well, why is
the due diligence period so long?And I'm like, well, I don't
anticipate taking that long. And certainly, if there's nothing wrong, we can
wrap this up and we can doan addendum to the contract stating that the
due diligence period is removed. ButI want to give myself enough time for

(17:59):
us to negotiate and for your clientto be able to explore what their options
are and how much it's going tocost them and make up their mind.
So just be aware of those dates. A lot of people just kind of
put arbitrary dates. I mean,you really have to think it out and
say, all right, it's probablygoing to take me. I'm not going
to be able to book an inspectorfor that's going to take a few days,

(18:21):
and then the inspector is going totake another day or two to get
the report back to me, andthen I may have to go get some
estimates, and then I'm going tohave to counteroffer to the seller. The
seller may have to go get estimates, and all of that has to happen
within that due diligence period. Sojust make sure that you plan accordingly.
And I should explain. You heardme say at the beginning of that that

(18:42):
I thought that this process that therewas a flaw, And by that I
mean because you want to give yourselfthat long of a period and you're getting
pushedback from the seller, especially theseller's agent. Why is this due diligence
period so long? And in acompetitive market you have other people that are

(19:04):
putting these offers in. The shorterthe due diligence period, the more attractive
the offer, and that goes forany kind of contingency in the contract.
The less contingencies the shorter periods oftime, the more appealing the contract is.

(19:25):
So if you do what I justsaid and think it all out and
protect yourself properly, and if youthink about it, you're also protecting the
seller, whether they realize that ornot, it could put you at a
disadvantage in a competitive market because justas an example, say, everything else
is the same, but your duediligence period is twice as long as another

(19:49):
competing offer. Well, they maychoose to go with that other competing offer
because they've requested a shorter due diligenceperiod, even though it may benefit them
when they really think about it,to have a longer one that you proposed.
They may be well more well protectedwith that longer period than with the

(20:11):
shorter one. But a lot ofpeople don't realize that. So call it
what you will. That's what Imean by you know, it's kind of
flawed, but nothing's perfect in thisworld. And that's the way that the
procedure currently works with inspections and duediligence. So just make sure you leave
yourself enough time in that due diligenceperiod and to get everything done that you

(20:33):
want. Now I should add away, and I already mentioned this earlier,
to overcome a seller's hesitance in acceptingthat longer due diligence period. That's
where your termination fee comes in.Make sure your termination fee if you have
a long due diligence period is chunky, so they can say, well,

(20:55):
you know what, it wasn't awaste of time, because even if they
change their mind to walk after amonth, I get to pocket five grand,
ten grand, whatever it might be, whatever you decide, you know,
would be a good incentive for themto accept that period and your contract.
I've done contracts where we proposed thesixty thousand dollars termination fee because we

(21:22):
needed a long due diligence period tomake sure that the buyer could do everything
that they wanted to do with theproperty, and we wanted to make sure
that the offer was very attractive,and we did not want that long due
diligence period to put the contract ata disadvantage, so we offered a huge
termination fee under due diligence. NowI'm not telling you to do that.

(21:45):
I mean, you have to considereach case individually. But I'm just telling
you some ways to make it workin your favor and to get around you
know, what I just said waskind of a flaw to overcome the seller's
hesitance. And don't get freaked out. I mean, you know, sixty

(22:06):
thousand dollars is a lot of money, and I would say that is not
typical in the sales of residential realestate where you're going to have a sixty
thousand dollars termination fee, but itmay be or you may be requesting a
very short due diligence period, soyou may try to get away with offering
zero for termination fee. Or youcould have an expensive home that has a

(22:29):
lot of contingencies in the contract andan extra long due diligence period, and
then you might want to offer sixtythousand dollars or whatever the number is for
due diligence termination. Like I said, each case it's a case by case
basis, so you have to lookat how long of a period you want,
what other kind of contingencies are inthe contract. It's a nuanced thing,

(22:51):
so you have to think the wholething through and hopefully have somebody that's
good at negotiation on your side andgood at thinking all of these things through
in order for you to have thebest shot at your goal, which is
to have the seller accept your contract. Now, I could go on forever
as you can tell talking about this, because there's a lot of things to

(23:14):
consider, but in conclusion and inconsideration of what I just said, you
know, the main goal is toget your seller to accept the contract.
So if you are in a competitivesituation when you're placing your offer, you
may want to forego due diligence altogether. Now, the contract doesn't give you

(23:34):
a way to do that. Itjust simply says what is your due diligence
period and what is your termination fee. So the way around that would be
to do a very very very shortdue diligence period. So in other words,
I've done them more by the timewe even ratified the contract. Essentially

(23:56):
time was up on the due diligenceperiod. There's no time for anybody to
act under due diligence, So sayit expires five minutes after it's ratified.
That's how you would get away with, essentially, for all intents and purposes,
having no due diligence in your contract. You know, you just pick

(24:18):
the next day or even later thatday if you think they're going to ratify
it right away, as the endof your due diligence period. So in
effect, you're going to your duediligence period is going to expire by the
time you can even have the chanceto act on it. So that's how
you would get away with that,and forego your due diligence. All right,

(24:40):
I'm running out of time here,so let's get to some real estate
news. Nationwide, the number ofhomes actively for sale during the month of
January increased by seven point nine percentfrom one year earlier. That's according to
data from realtor dot Com. Mediumprices also increased, showing a one two
point four percent increase compared to thesame time last year. In January,

(25:04):
more than half of the fifty metroareas that are analyzed by realtor dot Com
showed an increase in new listings overthe previous year, with some of the
largest growth happening in Denver, Seattle, and Miami. At the other end
of the spectrum, metros recording listingdeclines included Chicago, New Orleans, and
Philadelphia. The cost of financing thetypical home assuming a twenty percent down payment

(25:27):
increased by roughly five point four percentin January compared to January a year earlier.
That amounts to about one hundred andeight dollars per month. With this
increase, the required household income topurchase a median price home went up by
forty three hundred bucks to eighty fourthousand dollars, and that's before accounting for

(25:48):
the cost of property, tax andinsurance. The cryptocurrency company Unicoin Incorporated as
claiming the largest ever cryptocurrency real estatedeal involving land holdings in the Bahamas.
According to the Miami based company,the transaction covered two deals for the acquisition
of ownership interests in companies holding primeland in the Bahamas. Unicoin it committed

(26:11):
a total payment of one point onebillion unicoins for the acquisitions, reflecting a
total value of five hundred and fiftyfour million dollars at the current Unicoin fundraising
price of fifty cents per Unicoin.The company has said that this deal surpassed
its previous largest deal of three hundredand thirty five million dollars purchased in Thailand.

(26:33):
Several high profile celebrities and entrepreneurs havemade recent headlines with their decisions to
leave California. Elon Musk moved toTexas citying personal and business reasons. Joe
Rogan also relocated to Texas, highlightingthe state's more favorable tax structure and desire
for more freedom in space. Otherslike Tom Hanks and Rita Wilson have sold

(26:55):
their Los Angeles homes. While Californiaremains a hub for the entertainment industry and
a desirable location for many, Thereasons for celebrities moving out highlights broader issues
and preferences that could influence future trendsin where and how people choose to live.
Economic factors, lifestyle changes, theevolving nature of work, and social

(27:15):
concerns are reshaping the map of celebrityhavens, signaling a potential shift in the
traditional centers of entertainment and culture.In other words, California is doing it
to itself. I'm just about outof time. Thanks for listening to your
Home three sixty on Michael Blaze.Your Home three sixty is brought to you
by pool Works, the Low Country'sexclusive dealer of the Little Pool line of

(27:38):
pools. And remember you can getone thousand dollars off right now. If
you mentioned Michael Blaze and your Homethree sixty, just go to Mypoolworks dot
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be swimming in a lot of casesthe day that it's delured. If you

(28:02):
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