Find out Who Pays for Home Pest Inspection When Selling
Don't just breathe easy after receiving a clear home pest inspection because it doesn't necessarily mean your home is free from pest infestations or dry-rot. It just means the pest inspector, for whatever reason, didn't find anything wrong. Because like with any type of professional in the world, you'll find good pest inspectors and not-so-good pest inspectors.
You might say, ha, ha, but I am selling a house so I do not care if we have pests and the pest inspector missed them.
But these things have a way of coming back to bite. Although pest companies are generally on the hook for a certain period of time, the person ultimately responsible for hiring the lousy pest inspector might be the seller. A seller does not want to find herself in court over negligence or intentional misrepresentation or some other accusation.
When is a Home Pest Inspection Required?
This depends on your state and local regulations. In some states such as California, a home pest inspection is not a requirement of sale. It can become a requirement of sale if the buyer's appraiser notes conditions that could raise suspicions about termites, beetles, ants, and/or dry-rot and such. If an appraisal notes conditions that could require a pest completion, the buyer's lender might demand a pest report -- FHA and VA loans, in particular. Certain professionals such as real estate agents, appraisers and, yes, even home inspectors are not generally licensed to identify pest conditions.
A real estate agent can inform a seller as to whether local laws require a pest inspection. An agent might also give a client a few referrals to pest companies, but it is not the agent's responsibility to order the pest inspection. It is the seller's home and the seller's responsibility to call a pest company if the seller desires an inspection.
Should a Seller Pay for a Home Pest Inspection if it is Not Required?
Some sellers might still wonder if a pest report should be paid for by the seller, even if it's not required by law. This really depends on:
- the condition of the home
- your real estate agent's advice and, most important,
- the type of market in which you are selling.
If the condition of the home gives you a reason to suspect there is dry-rot damage or pests, you might want to pay for a pest report to clarify. For example, if you can poke the tip of a ballpoint pen through a window sill, you most likely have a dry-rot situation. If dry-rot appears evident, a seller can verify that issue by obtaining a pest report.
Your real estate agent might advise that you obtain a pest report. If it is not required, you might ask your agent for an explanation. Ask directly if a pest inspection is required or if it is simply a custom. If you are satisfied with the explanation, then move forward on that advice.
If your market is hot, and it's a seller's market, a buyer might not request a pest inspection in an offer and might waive home inspection contingencies. If the buyer does not request a pest inspection, and you are not required to obtain a pest report, you might want to forget about it.
On the other hand, if the buyer is likely to obtain a pest inspection or your market is a buyer's market, it could be preferable that a seller obtain a pest inspection while preparing the home for sale.
A clear pest report, for example, could then become a selling point and a benefit for a buyer. Buyers often worry about unknown facts when buying a home, and by providing a pest report in advance, it would be one less thing for a buyer to worry about. In some local communities, it is standard to give a buyer all of the seller's disclosures before an offer is presented.
For example, some neighboring cities in northern California adopt opposite practices. In the San Francisco Bay Area, buyers receive disclosures from the sellers up front, before submitting a purchase contract. In Sacramento, less than 100 miles away, buyers receive disclosures after their offer is accepted.
When Does it Make Sense for a Buyer to Pay for a Home Pest Inspection?
A buyer should obtain a pest inspection for two reasons:
- When the seller does not provide a pest inspection, and
- When a pest inspection has been provided and it appears to be incorrect
Basically, a buyer should always obtain a pest inspection if the seller does not. It is a matter of due diligence on the buyer's part. Plus, there is no better time to discuss the work that could be needed to receive a pest completion than before a buyer buys that home. There is little leverage left after the sale closes.
A pest inspection is generally fairly inexpensive. A pest company might vary pricing depending on whether the foundation is raised or slab and on the number of stories or square footage. Prices vary from $50 to $200.
The main problem a seller faces if a buyer pays for the pest report is the seller has no control over the quality of that pest inspection. In California, it is filed with the Pest Control Board and a matter of public record.
At the time of writing, Elizabeth Weintraub, BRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.