Should you buy a home with a termite history?
Buying a home is an incredibly stressful process—especially in a real estate market as hot as ours is here in Phoenix. Homebuyers and their realtors often have less than 24 hours to decide if they want to make an offer or not prior to the home being taken off the market. Under these conditions, many buyers are unsure what constitutes a deal breaker when it comes to real estate.
Termites are incredibly common here in the Valley. As we’ll review in this article, a home with a termite history shouldn’t necessarily sway you from buying the home. But, it does mean there are things you need to consider and look into before closing. Let’s take a closer look at termites and how they impact real estate here in our state.
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Should termite damage be a deal-breaker?
Here in Arizona, it’s said that there are three types of homes: those that have had termites, those that have termites, and those that will eventually get termites. To some degree, a termite infestation is just a matter of time in the long lifespan of a wood-frame home here in the greater Phoenix area.
As a prospective buyer, if you’re drawing a hard line against buying a home that has any history of past termite activity or termite damage in Phoenix, you’re probably ruling out a lot of homes on the market—especially ones built in the 60s and 70s.
Under state law, home sellers must disclose past termite activity and treatment in a document provided to the buyer shortly after an accepted offer. Known as the Residential Seller’s Property Disclosure Statement (SPDS), this documentation will be the buyer’s first indication of the home’s past with ‘wood-destroying organisms.’ From there, it’s on you—as the buyer—to schedule pest and property inspections prior to closing to affirm that the termite situation has been dealt with.
There’s a small, but important catch, with the SPDS disclosure. The current homeowner is only required to disclose what they actually know about their own property, and are not held responsible for what they should know. In other words, ignorance is a valid defense for non-disclosure. This creates situations where dutiful homeowners have an extensive history of termite activity and treatment compared to other homeowners who have a “clean” record, but might actually have a huge problem behind-the-scenes!
So, when is it a deal-breaker?
In most cases, termite damage shouldn’t be a deal-breaker, unless you find that:
— There is an active and unresolved termite infestation.
— There is extensive and unresolved structural damage to the home caused by termites.
In both cases, you also have the option of using newfound information to negotiate with the seller and their realtor. You might ask them to fix the issues prior to closing, or to compensate you for the cost of addressing them after move-in. Just remember: as soon as you get the keys, their termite problems are now your termite problems.
Can you get rid of termites permanently?
Yes and no. While homeowners can and should enlist the help of a pest professional to eliminate their current infestation, desert subterranean termites are notorious reinfesters. Like many highly organized pests with social hierarchies, termites use pheromones to communicate with other termites.
When termites colonize your home, they’re creating a lot of pheromones—including several that essentially put up a neon vacancy sign. Even once you’ve eliminated your current infestation, you’ll need to be on the lookout for more termites in the months and years to come.
So, how do you put a stop to your termite problems for good? While there’s no permanent solution that will keep termites away forever, you can keep your home’s defenses up. Subterranean termites, as their name implies, access your home by traveling underground. By having a termite control expert trench around your home, you’re erecting a barricade that blocks their access to your home’s foundation. This shallow trench, filled with termiticide, serves as a moat, protecting your castle.
Many high-quality, professional-grade termiticides can last for several years. But, eventually, this protection washes out of the soil after successive rain storms. If you want to continue to guard your home against termites, you’ll need to get your home re-treated every so often, just as you would for pests.
Do home inspectors check for termites?
While some home inspectors do offer general pest inspections, they’re not really specialists when it comes to detecting and diagnosing termite damage or activity. After all, a general home inspector is looking at so much more than just pests: they’re responsible for assessing just about everything from the foundation to the roof.
Instead, hire a termite specialist to inspect the property prior to closing. A pest control inspector will not only be able to provide you with a comprehensive report on the property’s condition and history, but can also provide you with advice based on what they find.
If there are termite issues, they can let you know the severity of the problems and provide you with an estimate for dealing with them—something you and your realtor can bring back to the property owner before you close.
While you have them out at your home, it’s not a bad idea to have your pest inspector also look for other signs of pest activity. If the home has scorpions, rodents, pigeons, or other pests, it’s better to know that now instead of having to discover it for yourself later. Even if you still move forward with the purchase, you can plan to have the home treated prior to moving in.
Do termites affect home value?
There’s some disagreement on this subject among realtors. Really, the answer to this question has less to do with termites and more to do with humans. What is the real estate market like? In a cooler market where there is abundant inventory, buyers can be more choosy with properties. It’s far easier, under those conditions, to pass by those with a history of termites—unless the price is just too low to resist.
Geography also plays a role: termite infestations are relatively rare in cities like Minneapolis or Detroit compared to Phoenix, Houston, or Miami. The more homes affected by termites in any given area, the lower the stigma they carry.
Here’s our take: if you’re in a hot real estate market in a Sunbelt city, you probably won’t see a hit to your home’s value for past termite damage—so long as the infestation was promptly dealt with and any damage has been resolved.
Homes are just in too high of demand for buyers to be too picky. Obviously, they’ll balk if your home has an active infestation or significant, unresolved damage. But, as long as you’re honest and you’ve done your due diligence, you shouldn’t see a major drop in your home’s value.
Needless to say, if you have termites, the best thing you can do is to hire a locally trusted professional and make sure the infestation is eliminated prior to listing. Include all paperwork and required disclosures when dealing with an accepted offer on your home.
Is it hard to sell homes with termite damage?
If by “termite damage,” you mean unresolved structural damage to the home, then the answer is a resounding yes. No buyer wants to purchase a money pit. Structural damage caused by termites can only lead them to think about what other problems might be lurking behind drywall.
You have a few options. The first, and arguably the best, one is to deal with the termite damage. Work with a pest specialist to eliminate the infestation, and then hire a professional to repair any structural damage. Yes, this will cost you money—most termite damage is not covered by homeowner’s insurance policies—but it will make your home far, far easier to sell.
Make sure your termite service includes a comprehensive termite warranty.
What are my other options?
If you don’t want to deal with the damage, you could, in effect, pay someone else to, by either lowering your asking price or selling the property to a third-party company willing to take on a compromised home. In either case, you’re still paying for the cost of repairs—it’s just that, instead of paying with cash, you’re paying with your home’s equity.
Just keep in mind that third-party home buying companies also need to make some money out of this exchange, so you’ll probably end up getting less money out of this deal than if you had just directly addressed the problem.
What about selling my home ‘as-is’?
Contrary to popular belief, selling your home “as-is” isn’t really a great solution. “As-is” isn’t some magic spell that convinces buyers to take on your problems and headaches. All “as-is” indicates is that you’re unwilling to negotiate on repairs.
The buyer is still entitled to disclosures and inspections, and they still have the right to walk away prior to closing if the home isn’t to their liking. In “as-is” sales, this happens a lot more frequently because there’s no middle ground for negotiation: if buyers discover a dealbreaker, they’re just out of the deal altogether.
How do I schedule a termite inspection?
We offer professional termite inspections for both buyers and sellers throughout the Valley. If you’re a buyer, hire one of our termite specialists to come out and inspect the property for signs of termites or termite damage. If you’re the seller, have our team inspect the property prior to listing so you know exactly what to expect when the buyer home inspection is completed. We can help with termite treatment, as well.
To schedule a homebuyer’s termite inspection here in Phoenix, give us a call. Or, even easier, contact us online using the form below.