Termites can create a lot of havoc in your home and can potentially cause thousands of dollars worth of damage. When buying a home - you want to be sure to have an inspection done to see if there was ever any termite or other damage and whether or not there is still an infestation. But who pays for the inspection? The buyer or the seller? The other day I got a phone call from one of my colleagues and they asked asked if the seller has to pay for a termite inspection. After I explained the answer, it occurred to me that other people may have the same question so I thought I would touch on it a bit in my blog.
Before I start, I should say that I am in California - Fresno to be exact ...and I'm not exactly sure what the rules are outside of California. However, in California we don't use the term “Termite Inspection” any longer - that would marginalize an under-represented group of insects and is non-inclusive. We prefer to call it “Wood Destroying Pest and Organism Report”. Also, here in my state, like many other points of the contract, whoever pays for the termite inspection is negotiable. The buyer can always request that the seller provide a termite inspection or pay for one, however, the seller is under no obligation to do so.
Personally I think it makes sense for the seller to get a termite inspection up front and make it available to anyone looking at the property. After all - you're trying to sell a product and you want the world to know that your product in good condition, why make it more difficult for people to make the decision to purchase your house. Making buyers pay for the inspection decreases the chance of that buyer making an offer on the property because this is just another additional expense that they need to cover. Imagine if they went around buying property inspections for every house they looked at. I always advise my sellers to have an inspection done up front and just pay for a certification - then we use that as part of the marketing for the house.
Not all sellers are going to want to pay for a pest certification and if you get to one that isn't willing to pay for the inspection, then as a buyer you can look at it from two viewpoints. One of them is that perhaps they have something to hide and don't want to show a pest report in which case you want to make your offer contingent on it passing a termite inspection. The other school of thought is that in this current market, when competition is high and inventory is low it may be in your best interest to simply pay for a termite inspection yourself. I say this because you might find yourself in a multiple-offer situation in which case you're trying to make your offer look as attractive as possible - if you’re asking for the seller to pay for things - does it make you offer look attractive? Sitting side by side another offer that doesn’t ask for one could be the difference between winning the bid and losing it. You can write it up as a contingency of the sale - meaning that if it does has an infestation , you are not obligated to buy it - in fact - you want to to make the entire offer contingent on ALL of your inspections to ensure that you have a safety net and can get out of the contract if you need to.
Besides, many companies will come out and do a pest inspection for free. So if they do pest inspections for free then why are we even having this conversation? Because we're looking for more than just an inspection, we want for them to certify that the property doesn't have damage and doesn't have termites. The certification is what you're actually paying for and not necessarily the inspection itself. They're happy to do the inspection, because they like to find termites that you can pay them to remove. However if they find nothing they will sell you certification that proves there is no termites or damage. If there is any termite damage they will be able to point it out and let you know how much it will cost to get rid of the termites and get a certification.
So remember, ultimately it's a benefit to the buyer and the responsibility of the buyer to make sure that they do have an inspection done so that they go into it knowing all the potential issues. As far as who is responsible for paying for that inspection - that is a point of negotiation and will depend on the current market conditions and whether or not the seller would be willing to cover that cost. Best of luck to all of you!!
Please be sure to check out my others articles on real estate, investing , and cryptocurrency ( and some other random dog stuff)