Would you agree to do repairs on a property without actually knowing how much they are going to cost?  I think “no” would be the most popular answer.

Termites In Big Bear

Yet, many sellers in Big Bear agree to pay for a termite report & clear section 1 without knowing how much it is going to cost them.

What is a termite report & clear section 1?

Termite reports are performed on nearly every home sale in Big Bear.  In this inspection, licensed inspectors will look for any active infestation of termites, dry rot, or fungus to the wood.  If they find any of these conditions, it is considered section 1 findings.

Why is this important?

If a buyer is getting a loan, then the lender will normally require that the home be free of section 1 conditions ie. no termites, no dry rot, and no fungus.  While this is a negotiable item, in Big Bear, it is customary for the seller to pay for section 1 work.

Why would a seller agree to pay for this without knowing how much it is going to cost?

Maybe they think it is not going to cost that much.  My guess is they don’t even think about it at all.  This is where a good real estate agent adds value.  It is their job to make sure their client understands what they are agreeing to. Unfortunately, what normally happens is the seller agrees to pay for for the report and section 1 work without knowing the costs – playing termite inspection roulette in my opinion.

While most of the reports come in under the $1000.00 price mark, I have seen several in the $5000.00 to $10000.00 range – ouch.  The tough part is, once you agree to pay for it, you really do not have a contractual “out” as a seller.

One good thing about Big Bear is that we only get subterranean termites, as compared to the type that fly around.  This generally means less damage and lower costs when selling a home.

What can you do to protect yourself as a seller?

1.  Do a termite report before you put the property on the market. It makes sense to have a clear understanding of how much that work is going to cost and you will know going into the offer process how much you are agreeing to.  The cost for a termite report runs between $65.00 to $85.00 in the Big Bear area and they are typically good for 3-4 months.  If you are priced right, you should not have a problem selling in the window of time so the report should be usable.

2.  If you don’t want spend the money to get an inspection upfront, make sure to at least put a price cap in the counter offer for how much you want to spend on section 1 of the termite. You’re letting the buyer know how much you are willing to spend.  This way, if the amount comes up a lot higher, you have a contractual “out” as a seller, or at least some negotiating power with the buyer.

3.  Make the termite inspection like all the rest of the inspections in the contract - a contingency of the sale that the buyer should investigate.  Don’t agree to anything upfront, let the buyer do their inspections, and based on those inspections they can make requests on repairs, just like home inspection items.  While this is not the way it is customarily done in Big Bear, it makes a lot of sense to me.

The key here is to have a plan as a seller.  Discuss these with your real estate agent and determine what is the best strategy for you.

Tyler Wood