Many homebuyers freak out when termites are mentioned and with good reason. The tiny critters are found throughout the continental US and are estimated to cause $50B of damage every year. This post will discuss what is a termite inspection for a home purchase.
What Are Termites and Why Should You Worry About Them?
In the context of real-estate, termites is a catch-all name that includes various kinds of wood-destroying insects. These can be proper termites, but also carpenter bees, carpenter ants and some beetles. It takes a trained eye to detect them in the early stages of infestation. Generally it’s cheap to inspect for and treat termites (more on this below). It gets expensive when termites have been left alone for a long time, usually years, so they get deep within the wooden structure. Repairing this damage could run from tens to hundreds of thousands. In extreme cases, it might be cheaper to demolish the house and build from scratch.
Termites are a potential threat for detached structures such as single family houses, but also townhomes and condo buildings constructed of wood. It’s unlikely you’ll find them at all-brick or concrete buildings since there is so little food there to sustain a colony.
Who Pays for the Termite Inspection?
The regional contract for Virginia, Maryland and DC includes a paragraph about a termite inspection. It gives the buyer a choice to pay for the termite inspection themselves or ask the seller to pay for it. The cost is usually $35-75, so I always suggest to my buyers that they pay for it. This way they can choose the company that does the inspection. Not to say that the seller will try some funny business, but there is nothing to prevent them from hiring another termite inspector if the first one finds termites. Maybe the second guy will miss the problem spots and then it becomes the buyer’s problem.
The inspection itself takes less than an hour and can be scheduled with very short notice. The turnaround time for the report is usually a day. The contract requires that the report is no more than 30 days old at the time of settlement. This ensures the information is current.
Who Pays for Termite Treatment and Damage?
So what happens if the report comes back indicating a problem? The issue can be as minor as finding dead insects or as major as uncovering a huge infestation and resulting damage. One thing to keep in mind is that finding termite problems DOES NOT allow the buyer to single-handedly void the contract unlike the home inspection. For more ways to get out of a contract, read my post here.
In our area, the seller pays for termite treatment and any related repairs. It’s not even a negotiation point. Of course, the seller could refuse to do anything about the problem due to financial constraints or other reasons (those termites are my friends!). In this case it gets tough. You could take the seller to court, but that’s never a quick, cheap or easy way to get things done. Depending on the situation, both parties could agree to void the contract or the buyer could pay for the treatment themselves.
Most lenders will require a termite inspection for houses and townhomes, so they don’t finance a rotten property. If the report comes back with issues, the lender will need to see written proof that the issues have been adequately addressed.
Generally, finding termites at the home you’re purchasing is not the end of the world. You do need to be aware of how the contract works in this case though. If you have any further questions, don’t hesitate to contact me below: