Buyers Beware: Conflicting Termite Inspection Reports
Most real estate agents who have been in the business a while know that not all termite companies are alike. My years in this industry have taught me a few things about termite inspection companies –
1. It is not uncommon to get reports with completely different findings from different companies
2. Although one company may find the same issues with a home as another, they may suggest different treatments and/or different prices
3. There does not seem to be any regulation in the industry when it comes to the cost of treatment
From a real estate agent’s perspective, the above facts can be very frustrating, especially when most buyer agents do not have any say in which company will perform the inspection, unless they request that in the contract and related paperwork.
One issue that has come up many times is the conflicting report scenario. Say the seller orders a termite inspection and findings indicate the home is infested and needs to be tented. For a second opinion, the seller then calls out another company and they say there is only infestation on some of the eaves, and it just needs to be replaced and treated with spray (not a tent). The seller is obligated to send both reports to you and your agent, but the seller can select which company will complete the work.
When a seller has two termite reports they are free to choose whichever company they want to do the work so long as that company will issue the clearance, with one exception: if the buyer writes into the contract that should a termite inspection reveal the home needs tenting it must be done.
It all comes down to who is responsible for the pest repairs. In California there is a California Association of Realtors (CAR) form called the Wood Destroying Pest Addendum. It specifies who is responsible – buyer or seller – for the termite inspection and any necessary repairs. It divides repairs into two categories. Section 1 reports damage caused directly by pests, such as the presence of live termites. Section 2 reports damage that is not related to actual infestation, such as wet wood that is the result of a leak under a sink. Typically most buyers’ agents check the boxes that assign section 1 responsibility to the seller and section 2 to the buyer.
One thing to keep in mind to ease any worry is that the company that issues a clearance will also provide a warranty, which usually is for one year and sometimes two. I highly recommend that the new owners call the company out before the warranty expires and have them do another inspection. This is a great way to prevent termite damage and protect yourself.
As for finding a reputable termite company, buyers can always have their agents specify which company they prefer the seller to use, or they can specify that the company be a mutually agreed upon company. This way the buyers can know that a reputable company is performing the work.
