Pest Inspections & Your Home
WHAT IS A PEST INSPECTION?
Commonly referred to as a "termite inspection", the actual name for this inspection is WOOD DESTROYING PESTS AND ORGANISMS INSPECTION & REPORT. The inspector is licensed by the California Department of Consumer Affairs; Structural Pest Control Board. During the course of this inspection, inspectors look for the presence of wood destroying insects (4 different types of termites, as well as carpenter ants, wood boring beetles, carpenter bees, etc). Along with these pests, the inspector also looks for fungus and dry-rot conditions. Also noted on the report are any conditions present which may contribute to future infestations (bugs) or infections (fungus) attacking the home. Specific "recommendations" for correction are then listed below each "finding" (problem), along with dollar amounts bid by the Termite Co. to perform those corrections.
WHAT DOES "SECTION 1" & "SECTION 2" MEAN?
SECTION 1 items are problems that exist NOW in or on the home such as active wood destroying infestations or infections (see above). This also includes any wood damage by same.
SECTION 2 items are conditions which may possibly LEAD TO infestations or infections of the one in the future. All "findings" are clearly listed as either Section 1 or Section 2 on the report.
IS THIS THE SAME THING AS A "HOME INSPECTION"
No. A home inspection is ordered by the buyers agent to inspect the home for plumbing, electrical, roofing, and general building code violations and recommend code updating. This report is generally paid for by the buyerat the time of the inspection. A home inspector will also point out suspicions of human health/safety concerns present in the home such as the possible presence of mold, lead based paints, asbestos, etc. The costs involved for making corrections that these home inspections deem necessary are usually up for negotiation between buyer and seller. This is another important subject to speak with your REALTOR about.
A pest inspection pays attention to none of these things, with the exceptions of the possibility of obvious plumbing, roofing, or shower leaks. In these cases, conditions will be mentioned on the report with recommendations to refer to licensed contractors who are proficient in those specific areas. The leaks themselves are not the pest inspector's concern. What is of our concern is the inevitable damage to adjacent structural wooden members that these leaks will eventually cause.
WHY DO I NEED A PEST INSPECTION WHEN I SELL MY HOME?
Often times, depending on the loan program and depending on how the purchase contract is written, lending institutions will require an pest inspection report along with the correction of affected areas of the property. The reason is to make sure that the property which they intend to lend money on is in good shape, and free from wood destroying pests, organisms and fungus.
Most buyers will also want to be assured that they won't be facing the possibility of large expenses after they close escrow.
Wood destroying pest inspections and how we handle them has gone through some changes and can be handled in a variety of ways. The inclusion wood destroying pest report as well as which party shall be responsible for the inspection fee, section 1 repairs and section 2 repairs is all negotiable.
In our region, it is standard that the seller pay for the report and section 1 repairs.
We prefer to handle the wood destroying pest reports on a case by case basis as different scenarios demand and wil benefit from different strategies.
Keep in mind that if a wood destroying pest report is mentioned in the purchase contract, the lender will want to see it. We have seen some lenders demand that section 2 items be corrected prior to close of escrow. We have also seen appraisers call out wood destroying pest items and subsequent demands from the lender for correction of those items.
Even if the buyer and seller agree that the seller is not going to be responsible for any Section 1 work, the buyer's lender may have something else to say about this.
Lender's will likely require to have all Section 1 work completed in advance along with a clearance issued by your Termite Co., stating that the home is now "free and clear of any active infestations or infections" before they will fund the buyer's loan.
There are exceptions and lots of different circumstances, we recommend talking with your Realtor about how you're going to handle the pest inspection way before you entertain offers. Keep in mind that the lender will play large role with pest inspections and every seller's needs are different.
WHEN SHOULD I HAVE MY PEST INSPECTION PERFORMED?
Since most lenders will generally accept reports and corrections performed only within the last 6 months, it has been customary to wait to order this inspection until your home actually enters into escrow. However, it has become more prevalent to order your report before you actually enter into a contract. Seeing your report early does make a lot of sense. As a seller, wouldn't it be prudent to have an idea of what your costs will be to perform any corrective measures prior to you entering into a contract with a buyer? Once again, it is critical to discuss this issue with your Realtor®.