A little pregnant (but this is really about termites)

by Kris Berg on April 24, 2009

A little pregnant (but this is really about termites)

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(Editor’s Note: It’s Friday night, and my entire family has ditched me. Steve is off with a buddy for a much-needed weekend away from the ol’ ball and chain, my youngest daughter prefers hanging with people who can stay up past nine, and my oldest is undoubtedly at some frat party in the American heartland instead of preparing for her college finals. I’m pathetic.)

I was tempted to leave the trailer off of the post title fearing no one would even bother if they thought this was another captivating diatribe on termite inspections. Alas, I am all about full-disclosure.

When you have one or even a few termites, isn’t that kind of like being a little bit pregnant? I always thought so, but we recently received a termite report (or, more affectionately, a “wood destroying pests and organisms” report) which suggested otherwise. It seems evidence of a “small swarm” in the attic was treatable by a local process.

Recognizing that chances are slim that one of our three readers coincidentally has an affiliation with a licensed pest control company, I would still love some clarification. Don’t those little guys have wings? (Isn’t that what, in fact, allows them to fly? Or do they just tend to swarm on foot?) Don’t wings suggest mobility? How can a local treatment of the area where you saw them last ensure that they aren’t now picnicing in a rafter at the far corner of the home? According to the inspector in our latest episode of Wood Destroying Pests Gone Wild, it can.

That’s not really my issue, though. It’s more of a curiousity. And my issue is more of a revelation. In our neck of the woods, it is customary that in the purchase contract the seller be anointed the honor of choosing the inspection company. I suspect this custom developed over time because it is equally customary to contractually require the seller to pay for the inspection and for remediation of any active infestation. (Wow — this is turning out to be just the kind of belly-laugh discussion I anticipated.) My revelation is this. Why shouldn’t the buyer pay for the inspection just like any other inspection?

I wrote about the nuances of the language in the termite addendum to the purchase contract back in my younger days. And being a full-disclosure kind of girl (refer to Paragraph One above), I am prepared to say I was wrong. Whether you fill in “Seller’s choice” or “Any reliable” where the inspection company is concerned, the reality is that it becomes a negotiable item. If you are faced with competing claims, whether they be about the extent of the problem or the method of treatment, the parties are forced to duke it out.

So, why shouldn’t the buyer pay for the pest inspection? We aren’t talking Oprah kind of money here; the inspection itself will run anywhere from $50 to $95 depending on the company selected. And why shouldn’t the contract be specific as to the name of a company who will perform the inspection? It takes away the guess work. Simply saying “Seller’s choice,” “Buyer’s choice” or “Anyone who isn’t under indictment” leaves the issue open and subject to dispute.

In one previous post I argued that termite inspectors in their findings are a lot like agents in their estimates of value. Ask a dozen and you will get as many different answers. Since my rudimentary illustration above clearly demonstrates that I wouldn’t know a termite from Warren Beatty if he was sitting at my dinner table (nor would our clients, by the way), I am forced to rely on the assessment of the licensed experts. And when we find ourselves with a food fight breaking out over competing and conflicting findings and recommendations, it is difficult at best to know correct from mistaken and cautious from overkill.

So, back to our current conundrum (involving a transaction in which we are representing the buyer).  The seller’s inspector says that swarming termites can be locally treated. The inspector we most often use says we need to tent that puppy and fumigate them across the international date line. The seller says there will be no fumigation on his dime; he has a company willing to treat for pennies on the dollar compared to the cost of putting the home under the big top. To fumigate, therefore, would cost the buyer a couple of thousand dollars he hadn’t counted on. Sure, all certifications come with a one-year guarantee, but the buyer has to be committed to having a reinspection within this time frame.

There is only one right answer, of course, and it was an answer so eloquently and generously offered to me recently by the beautiful, insightful and heavily-degreed Bernice Ross. We were actually discussing another topic, but as she recounted the story of a particularly heinous escrow from her past, she reminded me that it is not our decision. In fact, during escrow, a process involving many decision points, it is never our decision. Our job is to offer the information, offer the alternatives, and allow the client to decide.

This time, just in case someone is still reading, the client opted to go with the path of least resistance. Rest assured he will be in our tickler file, and in eight months or so we will be chatting again. But next time, I just might try the “Buyer’s choice” route.


ABOUT THE AUTHOR  Kris Berg is Co-Owner and Designated Broker of San Diego Castles Realty. If not-so static web sites are your thing, go here at once where you will find loads of real estate information including homes for sale, market trends, floor plans and more. Kris's hobbies include fencing and spot welding. She likes kittens.


{ 3 comments… read them below or add one }

Matt FreemanNo Gravatar April 25, 2009 at 2:06 pm

Kris,
You make some very valid points. The REO market in particular has added to the “buyers choice” option as they are not likely to pay for anything aside from the credit that is initially agreed to. As FHA continues to gain footing as one of the more frequently used financing tools this will be more of a concern as with VA. Termites are nasty flying animals and although complete fumigation is the best bet it appears many want the path of least cost.
FHA does not require pest unless it is in the body of the contract or mentioned by the appraiser to be an issue. At this point section 1’s will be required to be cleared and the standstill on the REO’s begins. “Who is going to pay for the work?” Back to the negotiation you spoke of.
I am excited to read more of your work as time presses on. All the best.

Kris BergNo Gravatar April 25, 2009 at 2:36 pm

All great observations, Matt. Regarding bank-controlled sales, we have found ourselves and our buyers in the situation of having to amend the contract deleting any reference to wood destroying pest inspections for the very reasons you mentioned – The selling or controlling lender won\’t pay, and the buyer\’s lender cares only to the extent that the work is contractual.

JakobNo Gravatar April 27, 2009 at 8:11 am

They once did a spot termite treatment on This Old House…

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