Termite Inspection…Not Me!

From the start, most homebuyers are given a disclosure indicating that before completing the purchase of a new home that they can complete any inspections at their own expense that they desire. If not changed this inspection period lasts for 17 days. Many choose, at the prompting of their real estate agent, to hire at least a home inspector and a copy of the inspector’s report is kept with the transaction’s file.

One of the oldest inspections performed on homes for sale is the termite inspection or pest control inspection. Many sellers agree to pay for this. It is not required by lenders. However, if there is any mention of a termite inspection on the contract, the lender wants to see it and wants any issues cleared before lending money on the property. Therin lies a problem that can kill the transaction.

In California there are 2 types of pest control problems: Section 1 which is evident infestation and Section 2 which are conditions likely to lead to infestation or infection. In other words Section 2 is preventative maintenance. The seller may agree to fix Section 1 items but not Section 2 which according to the contract may be paid for by the buyer if requested by buyer. But the current trend is that the the lender won’t lend — unless someone pays for any Section 2 repairs. If the seller won’t pay or can’t pay the buyer is asked to do preventative maintenace on a home he doesn’t own or cancel the transaction.

Or the buyer can just pay for the inspection himself, outside of escrow, as he does with a home inspection. This would be for informational purposes only. It would be foolish to then share the information with a lender who would force someone into paying for any Section 2 items, even when there is no active infestation currently. Professional Realtors® are familiar with this dilemma.