When purchasing a home, buyers look over a mountain of disclosure documents to help them determine if the property is in proper condition and whether to go forward with making an offer or not. One of the documents that gets the most attention is the Structural Pest Control Report or more commonly referred to as the Termite Report. These reports generally identify two types of infestations which can destroy wood: termites and dry rot fungus.
Why is the termite report important? For two reasons: section 1 and section 2 items. Section 1 item is commonly referred to as the active infestation items. This means these are problems which have to be immediately addressed. The reason why people pay attention is because the lender may not fund, if these items are not corrected. The bank is lending you the money and they may not want to hold the keys to a house that has active termite or dry rot infestation. Typically, these items are corrected or “cleared” before close of escrow, or money may be set aside in an account with the title company so that the remediation can take place after close of escrow. The licensed inspector which performs the termite inspection typically gives an estimate for the costs involved to clear the items. You will have a good idea about the costs involved in the corrective work.
Section 2 items are those items which should be monitored because they could become section 1 items if left unchecked. These are more informational in nature and left to the discretion of the buyers.
The next time someone mentions section 1 work, you will know exactly why that work is so important in a real estate transaction.
Steve Mun, Silicon Valley Realtor
www.stevemun.com
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