Watching buyers scan these reports at open houses, or prior to writing an offer, I know few will have a full grasp of their subtleties and implications. A seemingly not-too-expensive one may have numerous hidden time bombs totaling serious money.
What follows is a summary of an actual pest control report. The inspector's section-by-section findings are followed by my comments. Prior to my receiving it, the seller's agent told me the dollar amount. I asked if, upon reading it, I would find any bad surprises. The answer was "no," but, after seeing it, I questioned that response.
Finding. "The foundation of this structure was found to be concrete saddle over rock or stone...Some cracks, voids and deterioration was noted to the foundation."
Comment. The foundation may, or may not, be substandard. The report properly recommended this be reviewed by an "appropriate contractor or engineer." This item is a major red flag because it could be really expensive.
Finding. "Fungus damage was observed at the front porch overhang. Damage is apparently due to past and/or present roof leakage. At the completion of repairs, owner must engage the services of a licensed roofer"
Comment. Roof leaks are another possible problem with this house. The cost to repair roof is in addition to the termite company's bid.
Competent, caring agents explain the possible implications and issues to their buyers and sellers. Where further inspections are recommended in the report, they should be done, but must be balanced against damaging the property with low reward regarding the likelihood of finding a serious problem. Logic and experience play an important part in this decision.
Veteran, local selling (buyers') agents know which termite companies have a reputation for comprehensive reports, fair prices and good quality work. A low bid by a suspect company should be a danger signal and highlighted by the selling agent to his buyer.
Sellers, especially those who have lived in their older home for a long period, may be shocked at an expensive report. Top professionals prepare their sellers for this contingency.
Remember that an incomplete report, one that has numerous references to "further inspection," handicaps you, as a buyer or seller, from getting the full story. Listing agents should, but do not always, recommend to their sellers that they have these further inspections handled before the home goes on the market. This will provide a more accurate bid to prospective buyers and may save in the cost and time of additional reports.
Structural pest control reports can have a modest price tag or sometimes exceed $100,000. As a buyer or seller who rarely reads this type of report, you cannot be expected to understand all its nuances and potential traps. That is why you must rely on a real estate professional to guide you through the document. Make sure you work with one who will do this for you.
