We live in Los Angeles- all homes here have termites.
Sellers can be very nervous about getting a termite inspection, especially if a very long time has passed since the last termite inspection. They are worried that there is going to be termite infestation and termite damage which will add up to a big unknown expense. To give you ball park numbers, a fumigation for a 3br house is ~$5,000, chemical treatment ~$2,000, and wood replacement about $200-$300 per beam. For normal size houses you can expect $4,000-$6,000 if you haven’t done anything at all while you have owned it, and you’ve owned the property for at least ten years.
It is customary in Los Angeles for buyers agents to incorporate into their offer a “Wood Destroying Pest Addendum” or WPA. This addendum defines who pays for what. It identifies two kinds of conditions, section 1- ACTIVE INFESTATION and Wood Rot, and section 2- conditions likely to lead to infestation. Sellers are customarily responsible for taking care of section 1 items, which means getting rid of any termites if they are there and buyers are responsible for section 2. It is important to note that if you as the seller accept a WPA, then getting termite clearance is now a requirement of the lender.
I strongly recommend to not wait until you are in escrow to get a termite inspection. Many sellers complain that accepting the WPA is like writing a blank check because they don’t know how much termite is going to cost yet. Avoid this by getting your termite inspection early so you know exactly how much it is going to cost. If you agree to the WPA, as a seller you get to reserve the right to choose which termite company will do the inspection, however you also will have to pay the inspection fee. A Termite inspection costs ~$150.
Condos tend to have less termite problems than houses in my experience- and since the expensive option, fumigation, requires permission from the HOA for the entire building to be tented, this never happens during escrow- so you will have the less expensive chemical treatment option if termites are discovered.
Multifamily Apartment Buildings also, almost never get fumigated in escrow, even if there are termites. This is because it is very difficult to get the tenants in the building to relocate for 2-3 days (you might have to pay them a per Diem) for the duration of the fumigation- all of their food will have to be bagged and any pets removed – its a big hassle. Usually the termite company will provide at the request of the seller, a ‘Secondary Recommendation’ (make sure you ask for this) for an alternative method to treat termite infestation other than fumigation. This means chemicals.
If you own a Spanish or Mediterranean style house with a clay tile roof, it might be wise to take a page out of the multifamily termite inspection book and also ask for a Secondary Recommendation on your termite report. The clay tiles on the roof are almost always damaged during a fume and the termite company will not pay to repair them. I would set up the negotiation with the buyer that if you do a fumigation, and any tiles are damaged, or landscaping around the house killed, that it is their responsibility to fix them.
When as a seller you are doing an as is sale, then you don’t have to worry about termites- it’s the buyers responsibility, although you usually still want to provide a report.
Expert Seller tip: Exclude the garage from the WPA. Many buyers don’t care about the condition of the garage, so they often will concede this point and it can save you money.
Los Angeles has an ideal climate for Termites, getting a termite report is mandatory. Some sales, such as short sales, bank owned sales, probates, are ‘as is’ sales exclude termite. The listing agent, offer instructions, or the Listing Remarks- will usually say if it is as is or not.
If it is not an AS IS sale, you definitely want to include a Wood Destroying Pest Addendum (WPA) with your offer. This form specifies that the seller pays for section 1, and the buyer is responsible for section 2.
Section 1 is defined as Active infestation, and basically means if there are any termites there.
Section 2 means conditions that are likely to lead to infestation. Examples of this could be wood debris in the crawlspace, or an outdoor deck that is touch the ground.
Termite Inspections are paid for by the seller and they choose which termite company to do the inspection.
There are two kinds of Termite Companies: Buyers Termite Companies and Sellers Termite Companies. The Seller tend to choose termite companies that “won’t kill the deal”. What that means for you as a buyer, is that their termite company may not do a thorough investigation or miss infestation in their report. In most cases this won’t matter, if the house needs a fumigation, it doesn’t matter how much drywood termite there is, the fumigation will treat the entire house. Sellers termite companies tend to be really lax when it comes to inspecting the property. Being a termite inspector is not glamorous work- you have to poke around with a knife, a screw driver, or probing rod, looking for wood rot and evidence of termite damage, and crawl underneath the house on your belly in a confined dusty spaces with spider webs, sometimes its muddy, searching for termites. You have to go up in the attic which can be really hot if it is not ventilated and its summer, and be very careful to not miss a joist and step through the ceiling! Many times the termite inspection is not supervised, so there is no way of knowing if the inspection was thorough or not. Having been an agent for many years and seeing and working with many inspectors you learn which companies have good reputations and which ones are shady. If the report looks to good to be true it never hurts to hire your own inspector and get a double report. You can then take that report if it differs from the one the seller provided and show it to their termite company. If termites are there, they are there and you can’t argue with that. They will usually revise their report for these “new findings” if it was inadequate. Be especially careful of Remodels or Flips. These properties were usually neglected for many years and then rapidly improved by the investor and put back on the market. I have found that many investors either do not budget for termite, or include termite in their remodeling plan, and as a result these properties may look wonderful but have major termite problems. A fumigation is needed, but you will probably have to fight to get it, or do it yourself.
As a general rule, the longer the property has gone since its last market sale the more likely there will be serious termite damage and active infestation. This is because most property owners only fumigate/treat termite when they sell. If the property hasn’t sold in over 10 years be on the look out for termite and if the termite report comes back too clean be suspicious.
Buyer Tip: Write in anything that has Wood to be included in your WPA, this means wood decks, garages, wood staircases, guest houses etc. to get full coverage.
How do Termite Inspectors Find Termites?
A termite inspector will be looking for “frass” which is a pile of termite droppings that is a tell tale sign of drywood termite active infestation
and mud tubes that indicated subterranean termites (also called subs).
The termite inspector will have a prod or some kind (usually a ski pole, pocket knife, or phillips screw driver) that they will use to poke wood siding, rafter tails, door and window jambs, and floor joists to explore for termites. Termites eat wood, so any wood that has an active infestation will be hollow and the prod will poke straight into the damaged wood.
Very thorough termite inspections go through the crawl spaces, all over the property, and into the attic.
How to Read a Termite Report
Termite reports have two important pages, the first page and the last page. The first page will have a diagram of the property. There are labels such as A2 and b11 or whatever. The Termite inspector will give codes to each item he finds. The explanation of the codes is in the interior pages of the report. If there is a bunch of codes everywhere that means that the property needs a lot of work. If there are no codes at all, you had a clean inspection.
Here are some side by sides of termite inspections on the SAME property. Just to give you an idea of the difference in detail that you can get from one company to the other. The Left side are Seller Termite Companies, and the Right Side are Buyer Termite Companies
The last page of the Termite report will have the termite inspectors recommendations and cost, if any corrective work is needed. The corrective work will be seperated into section 1 and section 2 items. The most common treatment for drywood termite infestation is fumigation or injecting chemicals in the walls and for subterranean termites is spraying chemicals on the ground. Additionally, any wood that has structural damage as a result of the termites will be replaced or braced with a method known as ‘sistering’. Sistering is like putting splints on the damaged wood. The contractor sandwiches the damage wood with a new piece of wood.
Termite inspections cost $150