When you buy a house, one way to learn about the condition of the property is
through inspections. Some inspections are optional, but one inspection I would never
skip is the one that identifies wood-destroying pests. It used to be called the termite
inspection but now is more accurately referred to as the pest and fungus inspection.

     If a seller (or their real estate agent) were to discourage you from ordering a pest
and fungus inspection, I would demand one without question—even for new
construction. This inspection not only reveals active problems, but also the conditions
that could lead to problems in the future.

     Years ago, when my mother was buying a brand-new house, I recommended she
get a pest and fungus inspection. The contractor thought I was crazy. The house had
never been lived in—how could there be problems? While the contractor was right
about there being no active infestations or fungus, the inspector did find that the crawl
space was littered with the discarded ends of boards that had been cut during
construction. It was only a matter of time before those boards became the perfect
breeding ground for all manner of wood-destroying critters: termites, powder post
beetles, carpenter ants, carpenter bees, fungus, and more. Before escrow closed, all
those boards had to be cleaned up.

     Folks sometimes ask me who should pay for a pest and fungus inspection. I
recommend the seller order all relevant inspections as soon as the property is listed.
Just like other disclosures, inspections provide prospective buyers with information early
in the selling process, which benefits both buyers and sellers.

     If the inspection hasn’t been completed before the purchase agreement is
written, the party who pays for the inspection is negotiable—as are all terms of the
contract.

     As with all professional services, it’s important to choose a reputable pest and
fungus inspector. Consult with your REALTOR about the inspector’s reputation and
credentials. Be sure the inspector is licensed, carries worker’s compensation and
liability insurance, and is trusted by people in the construction and real estate industries.

     Sometimes when a seller supplies an inspection, buyers wonder if they should
get an additional inspection. Here’s my advice: First, talk to your REALTOR to see if they have any concerns about the inspector; second, read the report to see if any areas
were missed. If you need another inspection, get one!

     As I mentioned before, pest and fungus reports are typically divided into two
sections: problems that require immediate attention (such as active termites or rot
around the base of a toilet), and potential problems (such as a leak that hasn’t caused
damage yet).

     With the report in hand, a buyer can identify which issues need to be dealt with
and then request that the seller take care of any or all of them. The buyer may prefer to
renegotiate the purchase price rather than have the seller remedy a pest or fungus
problem. If the buyer plans to redo the bathroom anyway, it doesn’t make sense to ask
the seller to fix the rot around the toilet.

     It's important to consider more than simply the construction cost of repairs. There
are other financial considerations. How substantial is the work going to be? Will it be
done before or after the close of escrow? Will it be done before or after the buyer moves
in?

     If we’re talking about a three-bedroom, one-bath house and the bathroom has to
be torn out and rebuilt, there will be some time during which no one can live in the
house. This can have a serious impact on the buyer’s purchase terms. In many cases,
the buyer may not have anywhere else to live while the work is being done,
necessitating finding another place to live, such as a hotel or short-term rental, and
moving belongings twice (once to a rental or storage facility and then again to the new
house). These expenses need to be considered when renegotiating the contract.

     Even if you have no plans to sell your house, getting a periodic pest and fungus
inspection is a good idea. If you have a 100-year-old home, consider inspections every
five to ten years. If your house was built in the last few years with Hardie Board siding,
every ten years is probably plenty. Pest and fungus inspections are relatively
inexpensive—and far cheaper than not doing them if there is a problem brewing. These
types of problems do not go away on their own and they don’t get cheaper if you wait.

     If you have questions about property management or real estate, please contact
me at [email protected] or call (707) 462-4000. If you have an idea for a future
column, share it with me and if I use it, I’ll send you a $25 gift certificate to Schat’s
Bakery.

     Dick Selzer is a real estate broker who has been in the business for more than
50 years. The opinions expressed here are his and do not necessarily represent his
affiliated organizations.