I often wonder why sellers don’t get the termite inspection done before selling their home. I’m assuming it’s because their agent doesn’t recommend that they do it. If you are getting ready to sell your home, ordering your termite inspection before you sell can literally save you thousands of dollars.
Why? Because the way the purchase contract is normally written in California, you as the seller agree in advance to pay for all termite work without having any idea what it may cost.
What You Want to Avoid
Here’s how it normally works. Once you find a buyer and open escrow, the termite inspection is ordered by your agent. The termite company comes out and looks for evidence of termites, dry rot, etc. The termite company will then issue a written report with a diagram outlining their findings. The report will also include a bid by the termite company to make necessary repairs which can include tenting, removal of wood, etc.
Assuming you agreed ahead of time to make those repairs, you are now contractually obligated to do so prior to the close of escrow no matter what the cost. And you are also required to return the affected area to its previous condition (an additional cost). In other words, paint.
Order the Termite Inspection Before You Open Escrow
Ordering the termite inspection before you sell your home lets you know what you are obligating yourself to ahead of time so you can plan accordingly.
It gives you the option to take other action. For example, let’s say you have an old wood patio cover that has termites/dry rot and will cost $2500 to repair. If this is discovered while you’re under contract with the buyer, you’re paying for the repair. However if you discover it before you are under contract, you can just take the patio cover down and save yourself $2500.
You can negotiate the repairs with the buyer before accepting the offer. I recently had this situation with a client. We got the termite inspection done before we had a buyer. The report came back with $2000 worth of repairs. We had multiple offers on the home so we went to the buyers and asked them to pay for the termite repairs as a condition of the contract. The buyers accepted and I saved my client $2,000 that he would have had to pay if we had the termite inspection done one day after we accepted the offer.
You can get competing bids to reduce the cost of repair. If you’re two weeks into a 30 day escrow, you are under the gun to get any repairs completed prior to the close of escrow. However, if you get your termite inspection done ahead of time, you have time to shop around for the lowest bid. As long as the work is done correctly, the termite company will come back out to reinspect the work and issue a clear report. That’s all you need to satisfy your obligation.
The cost of the termite inspection is $75 – $120 and the report is good for 4 months. If it takes you longer than 4 months to list and close escrow on your home, you may have to order a new inspection.
And just in case you think your home may not have termites, a termite inspector once put it to me this way, “In California, every home has termites, had termites, or will have termites”.
Any questions or comments, contact me at 805-267-9481.