You found your dream home, but during your inspection, they find termite damage. Who Pays For Termite Treatment? Does that mean you have to shell out hundreds or thousands more to fix it and get rid of the bugs? Or does it mean the seller has to pay and maybe even knock some money off the home price?

In most cases, termite prevention is paid for by the buyers, and termite treatment is paid for by the seller in the closing costs. However, if the seller listed the house “as is,” the buyers are responsible for all termite damage and future prevention costs.

Of course, there are always contingencies that can make this decision more complicated. For example, the state you are buying a home in may have its own specific rules about termite damage. It is important to know all of the rules and laws about home buying before signing a contract.

It Is All About the Contract

The seller writes up the contract and typically lists who is responsible for termite damage if there is any question in the matter. If the seller lists in the contract that the buyer has to pay for any pest damage or repairs found, it will be the buyer’s responsibility.

However, you should have already read the contract before signing, which means the inspection report will have already been done. Before signing a contract to buy a home, there are certain inspections and paperwork you want to have. Some of these include:

• Closing cost obligations
• Disclosure agreement
• Home appraisal report
• Home inspection contingency
• Home maintenance and repair records
• Termite inspection contingency
• Terms of finance

The terms of finance and closing obligations are typically taken care of by your real estate agent. Unless you are a professional home buyer, it is best to have a real estate agent handle all of the important points you may not understand. For example, you may not have known that in most states, the seller is required to have an inspection done and provide a disclosure agreement.

What is a Disclosure Agreement?

43 out of 50 states have seller disclosure report laws that have to be followed when selling a home. Although each state has different laws about what you have to disclose, the basic requirements include material issues and information about the home’s condition and the property being sold.

Material issues include those that may affect the property’s value or the buyers’ decision to buy the home. This does not mean that the seller has to tell you everything they do not like about the house. It just means that they have to let you know about any information they have about the home that may impact the sale.

If you are the seller, the disclosure agreement can save you a ton of money if something happens to the home after you sell it. No matter the problems, it is best, to be honest upfront to cover yourself in case of future issues. Termites can be a big deal if the buyer discovers major damage after the sale, but not if you have it listed on the disclosure agreement.

Disclosure Agreements May Include Termite Clause

For example, Arizona has a disclosure agreement report that states the seller is required to disclose any defects or other conditions in the property being sold. Some of the details listed on the report include:

• Any appliances and items that remain with the home must be listed and checked for defects
• Condition of fences and gates
• Driveway condition
• Electric system damage
• Foundation damage
• HVAC equipment inspection
• Pest control
• Wood destroying organisms
• Plumbing system damage
• Retaining wall damage
• Roof inspection report
• Sewage system damage
• Wall or floor damage
• Water supply

Pest control and wood-destroying organisms in this report ask the seller if they are aware of any termites, ants, or other wood-destroying pests in the home. It also asks if there has ever been damage that resulted from any of these wood-destroying pests or organisms.

States with the Most Termites

The termite inspection report may be completely separate or included with a pest control report in other states. This is important to include, especially if you are buying or selling a home in a state that has the highest risk of termites, such as:

• Oklahoma
• South Carolina
• Tennessee
• Texas

Termite Inspection Reports

In a termite inspection report, the inspector will list the outcome as section one or section two. Section one is termite treatment and should be paid for by the seller. Section two is considered as termite prevention and should be paid for by the buyer.

Even if it is not required, the seller may take it upon themselves to pay for the termite inspection and any remedies that need to be done. This is often a good selling point and will prevent any problems that may occur down the road after the home is sold. Nobody wants to sell a home to someone if they know it has a major problem like termite damage.

Is Termite Damage a Deal Breaker?

Termite damage may not be a deal-breaker if the damage is not extensive and has not weakened the house’s structure. If the termites have eaten away support beams and floors, you may want to rethink the deal. Even with treatment, the home may never be structurally sound.
If you are the seller, termite damage does not have to be a big deal if it is not too bad. It is best to offer to fix the issue even if you are not required to by law. When you do this out of good faith, the buyers are more likely to be agreeable to the sale.

How Much Damage Can Termites Do to a Home?

There Are Several Different Types of Termites

Although there are actually 45 different species of termites in the United States, they all belong to one of three different types:

• Subterranean termites live in the dirt and build large colonies in the ground, eating fences and trees as well as homes. These are the worst type of termites because they build the biggest nests and can do the most damage.
• Drywood termites just live in wood like dead trees and hardwood floors. They do not need dirt and usually just live in homes. Their colonies are smaller, so although they do a lot of damage, it takes a lot longer.

No matter what kind of termite infestation you have and whether you are the seller or the buyer, it is essential that you get the home treated immediately. The longer you wait, the worse the damage and the more it will cost to fix. If the damage is extensive, it will likely compromise the sale, so if you are the seller, you may have to invest quite a bit of time and money fixing your property first.

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