By Karen D. Friedman | 06.08.20 8:00 AM
A termite inspection in real estate is done to make sure that a home is free of termites and other damaging elements. What you may not be aware of is how that termite report is broken down and what those sections mean. We’re going to talk more about Section 1 and 2 of a termite inspection, what they mean, and the differences between the two.
So when would you need a termite report?
Getting a Termite Inspection in Real Estate
Let’s start with your client that’s interested in buying a home. You show your buyer houses and they finally find the one they want. You make an offer and it’s accepted. Escrow is open and everyone is happy so far.
As with any property, we want to make sure there are no underlying issues. Your buyer has the right to a home inspection in a real estate transaction. Along with that, your client has the right to a termite inspection. In some cases, if the buyer is dealing with a lender the termite inspection will be required as a condition of the loan.
The Termite Inspection & Clearance
The next step would be to hire a termite inspector that will go into the home and inspect for any infestations. If necessary, the inspector will also go under the home to check for subterranean termites. This to make sure the house is free and clear of termites.
If there is no evidence of termites, this is called having clearance and the lender will need to be provided with this information to satisfy the condition of the loan. The reason some lenders require this report is to ensure that they are issuing a loan on a property that’s a good investment.
Along with termites, the inspector is checking for things like dry rot, fungus, and any other issues that come with damage to wood. The inspector will look at the interior and exterior areas of your home and check for any visible signs of a termite infestation.
Having a termite inspection is vital, especially in places like California where most homes are made from wood and stucco. Unless the home is new construction, don’t forgo having a termite inspection. This will ensure that the investment in the home is sound and alert you to any problems from pests.
As you can imagine, this is extremely important because no one is going to want to invest in a home that has been structurally damaged. You want the report to disclose that the home is solid and has good structural integrity.
Reviewing the Termite Inspection Report
So the termite inspector has viewed the property, made his notes, and created the termite report. The findings will be important to you as the real estate agent, to your buyer, and to the lender for the loan. The inspector lists that there are Section 1 items in the kitchen, the bathroom, and under the house. Further along in the report, he lists that there are several Section 2 items.
Whoa, ok. At this point you may be asking, “What are Section 1 and Section 2 items?” Is one worse than the other? Will these findings affect the sale of the home or conditions of the loan? Now let’s talk more in detail about what these terms mean, the differences between the two, and the impact they may have on the home.
Termite: Section 1
If the termite report comes back with Section 1 items, that means there is an actual infestation of termites. That is the most important thing to know about what Section 1 means on the termite report. It’s fairly straightforward. Termites are there and are existing.
We know this because the inspector enters the home and visually sees termites or evidence of termite damage. That is Section 1 of a termite report. So let’s move on to what Section 2 means on the report.
Termite: Section 2
This is when the inspector notes potential damage to an area. If it is not treated or repaired in the near future, it can become a Section 1 item. These areas are considered hotspots and generally refer to where termites can flourish or elements that can cause wood damage. So what does this mean exactly? Let’s talk about a Section 2 example to make things more clear.
The inspector is viewing both the interior and exterior of the property and notices that the home has wood siding. Alongside the home is the sprinkler system. When it comes on, one of the sprinklers hits the side of the house slightly warping the wood.
The inspector notes that it hasn’t damaged the side of the house yet; it still has structural integrity. But he also notes that if the sprinkler head is left unchecked it has the potential to turn that wood siding into dry rot. So again, it has the potential of turning into a Section 1 item.
As you can see Section 2 items are not as serious as Section 1, but just as important when you are looking at the Termite Inspection Report overall. Your buyer will want to be made aware of these potential issues to protect their investment.
Buying a home will be one of the most important investments you’ll ever make. You will want to safeguard that investment. Getting the termite inspection is just one safeguard that you should definitely invest in.
Remember, findings of Termite Section 1 may mean taking a more serious look at the property. Addressing the infestation should prevent more extensive damage. If the report finds Termite Section 2 items, take that into consideration to avoid these issues becoming problems.
Would you purchase a home with no Section 1, but a considerable amount of Section 2 Items that would have to be addressed? Share why or why not with us!