Termite Costs for Bank Owned Properties

Are you looking at Bank Owned properties to purchase? Have any of these properties not been bought or sold for the past two to three years? 

More than likely a termite report is going to be an essential part of the transaction.  Right? And many times more than not, there is going to be work that will need to be done on the house.  A termite inspection includes any wood destroying pests which encompass termites and wood rot amongst other things. 

In a typical arm's length transaction in California the Wood Destroying Pests Addendum (Realtors call it the WPA) is attached to the purchase agreement as a separate addendum specifically pointing out who pays for what.  Generally, the seller pays for anything in Section 1 which would be anything that is inside or attached to the house and buyer pays for Section 2 which is anything not attached to the house like a shed or gazebo.  The termite inspection does not take place usually until the offer is placed in escrow therefore what is on the report is pretty much unknown. 

When purchasing a bank owned property many buyer's agents make this one simple mistake that can cost their buyers a credit for termite expenses.  Do not leave the expense for Section 1 termite repairs open ended!!  A bank will not agree to an open ended amount!!  Instead they will deny any repairs at all. 

If you suspect there are damages that a typical seller would pay for Section 1 damages, estimate the costs and write a number in as a cap.  Of course this estimate may be too high or too low.  You will need to use your best judgement in relation to how old the house is and when the last termite report was finished.  Or better yet, pay for the termite inspection before you write the offer so you know exactly what you are getting into.  $75 up front may save you hundreds or even thousands of dollars at close of escrow! 

Remember this important point, that it is imperitive that you write in a definitive number for your termite repairs on any offers for bank owned properties!  This is the most prudent way to ensure your buyer will receive the proper credit they deserve!