Monday, September 21, 2009

What’s in a Termite Report?

What’s in a Termite Report?
I recently marketed a home in Cupertino for a seller. As I typically do, I ordered a termite report before I put the home on the market so as to disclose to potential buyers (and the seller) any damaged wood the home may have. A termite report does more that discloses if a home has termites or other insects that destroy wood. It also outlines any dry rot that the inspector found during the course of his inspection. In addition, the report will explain any items found that, left untreated, may lead to dry rot. And lastly, the report will give a “heads up” as to other areas of the home that may need attention beyond dry rot and termites. Here’s a detailed explanation of each.

Current infestation or dry rot is referred to as “Section 1 finding”. Items that may lead to dry rot or heads up items are referred to as “Section 2 findings”. Sometimes there are areas that cannot be inspected because an inspector is unable to visually inspect the area. I often see this in areas such as the garage or attic where occupants of a home have a lot of stuff around preventing the inspector from getting a good view of potential damage. In these cases, the inspector will state “needs further inspection”. If you want to remove the stuff and have the inspector come back, be advised that there is a re-inspection fee.

Termites, beetles, etc. are a problem because they eat wood. Wood destroying organisms eating wood inside the walls and floors of your home causes the structure to weaken so it’s important to eradicate these pests. One could have termites under the home (subterranean) or above ground. Both can be effectively treated. Sometimes they can be treated locally (just within that area) but sometimes the home will need a fumigation. This is when there are termites that are either impossible to treat because they can’t be reached within the walls or there are just too many to economically treat in several local areas. If you’ve ever seen a big tent over a home for a few days, that’s what a fumigation looks like. The cost of fumigation varies depending on the size of the home. I find that a typical 1,500 sq. ft. home costs about $1,800 to fumigate if you prep the home yourself. If you want the termite company to prep it for you, that will cost about another $250. If you choose to fumigate, know that you must be out of the home for a minimum of 3 days. It’s kind of a pain to make sure your mattresses are protected and food is removed (along with other considerations) so I typically advise buyers and sellers to conduct a fumigation after the seller has moved all their stuff out and before the buyer has moved in. Other considerations are the fact that if you have a TV antenna on top of the home, it will have to be removed so the tent can go over the home, or it may be more difficult for the fumigators to fit the tent over the home.

Water is also a big destroyer of wood. Often times you’ll see in a termite report that there is a leaking shower or toilet that has damaged the floor underneath the linoleum, tile, or shower floor. A seller often has no idea this problem exists because most of the time you can only see the leak if you crawl under the home. Not many of us do that. In this case, the inspector will often recommend removing the floor covering (or shower pan) removing the damaged wood and replacing everything. They will quote you a cost for a “standard grade” replacement tile, linoleum, or shower pan. But if you want a specific grade and color of tile, it will cost you more. Buyers might consider this to be a good time to remodel a bathroom. Since you are into the floor anyway, it will cost you less to remodel it now that later when you have to remove the flooring, etc. You may be able to negotiate a better price or a concession from the seller for the damage found in the inspection

Sometimes an inspector finds areas that need attention, but go are beyond the scope of his inspection. For example, if he discovers potential deficiencies with the roof, roof gutters, foundation, water under the home, etc. he will recommend an appropriate inspection by someone who is licensed to inspect those areas. A roofer, for example, is not an expert in termites, and vice versa so it’s an appropriate suggestion for the inspector to make to help a potential buyer understand what they are buying. If you’re a seller, it’s important to understand what you are a selling and how a potential buyer might attempt to negotiate with you based on the true condition of the home. It’s fairly common for a homeowner I’m working with to have no knowledge of termites in their home, but to have an inspector see them in a variety of places. That’s why it’s important to have a reputable firm conduct your inspection. I prefer one that is not on commission to sell you repairs and one that has a long, strong track record of standing behind their work. For many years I’ve trusted Able Exterminators in San Jose [(408) 251-6500] and have been pleased with the results. There are other reputable firms as well. Do your research. I've run across so many quirky things in termite reports over the years that it's impossible to cover them all here so make sure you know what you're reading. It can have a big impact on your sale/purchase! For more info, please conact me. -Gary Nobile, Realtor (408) 247-4029

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