What Do Termites Have to Do with Buying and Selling a Home? (Part 2)

‘Further Inspection’ Needed

In our earlier posts, we have discussed the type of termites that are common locally and how termite reports relate to the purchase of residential real estate in our area, in particular how Section I and Section II findings may be resolved in a transaction.

In addition to classifying deficiencies as Section I (an active condition) and Section II (a condition which left untreated could result in an active situation), termite inspectors may cite items as needing “Further Inspection” or “Inaccessible”. A Further Inspection might be recommended if the vinyl at the edge of a bathtub is discolored which indicates the possibility of moisture intrusion and dry rot damage to the subflooring. An “Inaccessible Area” might be an attic with insulation, a garage full of personal property, or the interior of a wall or column.

As noted in our earlier post, the PRDS purchase contract commonly in use in our area addresses how to deal with the various sorts of termite report findings. In the case of a “Further Inspection” or “Inaccessible Area” citing, most often an invasive procedure is required to determine the extent of damage, if any. A Buyer must notify the Seller within a prescribed number of days of their desire to have the further inspection performed. In the event further Section I damage is noted, then the Seller is responsible for the cost of the further investigation and correction of this newly found damage prior to close of escrow. If no further Section I damage is noted, then the Buyer is responsible for paying for the further inspection as well as restoration of the property, for instance, repairing the access opening created for the further investigation.

The buyer must evaluate the risk of not doing a further inspection and it is always a good idea to consult with the professional termite inspector. Occasionally, as in the instance of attic insulation, a further inspection might be impractical.

Correcting Pest Control Findings

The purchase contract clearly outlines the process for handling pest control deficiencies, but implementation is often tricky and fraught with emotion. Individuals who are selling and buying homes are coordinating a myriad of details and time is a rare commodity! Correction of pest control findings may entail multiple appointments, building permits, material selection, termite treatments and even vacating the home for a fumigation. Experienced Realtors can help guide their clients through these details through evaluation, negotiation, and win-win strategies for both the Buyer and Seller.

Given current market conditions, however, most sales in our geographic area are “as is” meaning the seller is not required to repair the Section I repairs. While this is a common expectation, it is nonetheless important that the principals understand the findings of the termite report so that they can make informed decisions.

Carol & Nicole

Technical editing courtesy of Mike Judas, Franz Termite Control