Buying and selling a home can be a complicated process, involving numerous contracts and financial agreements between the buyers and sellers, and their respective real estate agents. To successfully complete this process, you should understand the common report a lender may require to explain a home’s termite activity (wood-destroying organisms report). You also should review the common agreement between the current homeowner and his/her pest control company that addresses retreat and repair fees that may be required to fix any termite damage.
A Quick Lesson on Wood-Destroying Organisms Inspection Reports and Termite Agreements
Ron Harrison, Ph. D., Orkin
Termites create a serious risk to homes and other structures. To protect your investment in your home, there are two very important documents you should understand: a wood-destroying organisms inspection report (WDO) and a termite agreement.
Wood-Destroying Organisms Report – Your documentation of past and present termite activity
When a home is sold, the buyer and the lending company may want to ensure it is structurally sound. In these situations, the lender requires what is referred to as a wood-destroying organisms inspection report or WDO. Once known as a “termite letter,” other common names for this document include “official wood infestation report,” “clearance letter” or “real estate report.” This document is issued from a licensed pest control company and indicates that the home shows no signs of infestation from termites and/or other wood-destroying insects or organisms at the time of inspection.
If no termite activity is found in and around the home, the company can provide the WDO immediately. However, if termite specialists discover termite activity or signs of termites during the inspection, they may recommend the seller use a service to eliminate termites from the structure. After treatment, the termite provider would then able to provide the WDO.
The WDO is provided to the buyer and lender at the time of closing. To be valid, the termite inspection must typically take place no longer than 30 days before closing. Depending on the state of residence, the report may be valid from the day of closing, or up to 90 days after closing. This agreement means that if termites are found in the structure in that time period, the provider of the letter is responsible for the damage and treatment – depending on the rules and regulations of the Department of Agriculture in that state. Repairs for damage are not mandatory in all 50 states in the U.S.
You should be prepared to pay for a WDO, as most companies charge homeowners to provide this service. Before you request this report, you should understand that many termite service providers will not issue a WDO to homeowners who do not currently have a termite agreement from the company, as they have no historical data on the home to determine its termite history over the long term.
Termite Agreements – Your protection against termite damage
A termite agreement usually refers to the degree of responsibility a termite service provider is willing to assume after a structure is treated for termites. If the customer agrees to a termite agreement, the company will provide inspections in accordance with the general terms and conditions of the agreement issued. The purpose of the inspection is to look for evidence of termite activity and conditions conducive for termite infestations.
If activity is found, the company will react based upon the stipulations of the agreement. Some agreements require the company to simply re-treat the active infestation locations, while other agreements provide for treatment of active termite locations and may provide for the repair of new termite damage caused since the termite service providers initial termite treatment.
Your termite professional can explain the type of agreement your home qualifies for and the general terms and conditions in the agreement explains the obligations of the termite service provider and the consumer to protect your home. You will have several service and agreement options to protect your home and make an informed decision for protection.
