How Important is a Termite Inspection (CL-100)?
The termite inspection process for buyers is 100% about risk tolerance. In SC, termite damage is not uncommon and I always counsel buyers to include a clear or “clearable” inspection as contract contingency. I believe it is as important as the home inspection. Inspectors not only check for evidence of active termites, but also evidence of wood destroying fungi and elevated moisture levels below the main living level of the house as both attract termites. Once the inspection is complete, a letter called a CL-100 is issued with the results. Often, there are items that once they are repaired or mitigated, they can be “cleared” by a General Contractor for damage or a licensed pest professional for treatment and buyers can then move forward confidently.
The SC contract gives buyers the option of having the seller or the buyer to select the inspector, and also the seller or buyer to pay for the inspection. I have always counseled my buyers to make their own selection and pay for it as well. In the economics of home purchasing, it is a small amount of money to ensure that the inspector is working on their behalf. Imagine if the seller selects the inspector and it’s his or her brother-in-law. Whose interest does that particular provider have at heart? It’s worth it to pay for it every time.
My newest resolution is to make every buyer contract contingent on the seller proving with the actual pest control contract (not just the seller’s disclosure) just how the property is covered and if the coverage is transferable to the new owners. Many of us have taken sellers and agents at their word on the disclosure just what the coverage is. I now require proof because pest control companies do not always have the same coverage and the amount that insurance provides.
There are also varying types of treatment such as liquid or bait, and buyers need to consult with their pest control provider to determine which type meets their particular need for reassurance. The other influencing factor is whether the warranty or bond includes coverage for damage repair or only retreatment in the case of infestation and destruction. They also need to determine if the existing bond or warranty can be transferred when the property changes hands.
If the inspection finds that repairs need to be made in order to correct any deficiencies, it’s important for buyers to approve the general contractor selected to make those repairs. I had one inspection where the repair was not correctly done and we had not insisted on a general contractor because it was minor repair, and in no way structural. On the final walk-through, with over 25 years in construction and real estate, I could see it was improperly repaired. Because the bank did not require the inspection however, the buyer opted to waive the inspection on the contract and have it repaired properly later. This was only advisable because we determined there was no evidence of infestation, just a bit of wood rot at the door jamb to be repaired properly later. The SC CL-100 inspection report requires using a general contractor – residential building licensees are not qualified to clear an inspection if there are deficiencies even if the licensee has completed the repairs.
For those who want to play the odds, like my neighbors who decided that continuing their termite bond retreatments were too expensive on an annual basis and stopped them. When termites eventually invaded, it cost them 12K plus to repair the structural damage. They were willing to take the risk.
Other final thoughts on termite inspections:
• Termite inspections may turn up evidence of previous infestations – don’t panic, as long as it is not active, we can still get it passed with proper documentation.
• VA loans always require proof of a clear inspection.
• My SC buyer was working with a NC lender who told her she did not need an inspection because it was not a VA loan. He did not realize SC buyers have different risk exposure and that it was written in the contract as a contingency for the sale. She nearly cancelled her appointment at the 11th hour however, she wisely called her REALTOR® who kept her on track to close!
Bottom line – get a termite inspection and use a knowledgeable, qualified
REALTOR® to best represent your interests.