Expert: liznarr - 8/27/2009

Question
Looked at a house to purchase in West Haven, ct. House was built in 1952. Seller mentioned that she had a termite treatment done in July 2009, had an inspection yesterday and the termite damage is under the porch, the inspector could easily put his screwdriver through the posts in the basement. Do I go ahead with the offer? Even if I ask the seller to fix the damage, will this create a problem for me to sell the house later. We do not know the extent of the damage..the seller agreed to $177000 as the final price..please advice..thanks

Answer
Hi Manjula,

As you have learned, a termite “treatment” does not necessarily mean that all termite damage was corrected.

Since this house was treated in July 2009, if I were you, I would assume that the house is now under a RENEWABLE, TRANSFERRABLE termite bond.  

I would go ahead with the offer and suggest that you add written stipulations into the offer that:

1.   Seller will correct all existing termite AND water damage (if any is found) at her expense.  Further, YOUR inspecting company should be the guideline used for repairs she corrects.  (If Seller wants to have a different company make the repairs, let her know that YOUR company will reinspect the work, which must meet acceptable standards of workmanship.)

2.   Seller to provide you with a copy of her termite bond (which should be renewable and transferrable to you at closing).   If it is not a REPAIR bond, ask the issuing company if it can be upgraded from a “treatment” bond to a REPAIR bond, and what the cost would be to upgrade (cost of any upgrade should be your expense).  If Seller does not have a transferrable, renewable bond, ask that one be put in place for you at her expense.

A repair bond costs more, but in the event of termite damage, the bond will pay for both treatment AND repair … versus a treatment bond, which will not cover the cost of any repairs, but retreating only, should future infestation and/or damage be found.

Although I am suggesting that this Seller correct and termite AND water damage (if any), water damage is NOT covered by a termite bond; and future upkeep to prevent any water damage will be your responsibility.  

If the termite damage is all corrected, this will not create a problem for you if you sell the house later.  You will have written documentation that all damage was corrected.

I hope the above is helpful.  Good luck to you, and feel free to write again if you have additional questions.

Regards,
Elizabeth