Question:
“A friend of mine told me that there are new home sale contracts and that now the buyer is responsible for paying for the termites instead of the seller…?”
Answer:
Not exactly.
Before I answer your question, let me give you some context…
When I became a Realtor in 1984, it had long been the norm in southern California for the seller to pay for a “Section 1” termite (aka pest control) clearance.
Section 1 refers to active infestation (termites), infection (fungus, etc.), or damage such infestation or infection had caused.
Section 2 items are preventative and rarely paid by the seller, unless the buyer is getting a VA loan, which requires Section 2 work.
Now to answer your question…
Until November 2014, the purchase contract forms included a “Wood-Destroying Pest Addendum” (WPA) form where homebuyers usually asked homesellers to pay for the Section 1 work.
The new contract revision eliminates the WPA, under the theory that it’s inconsistent to have “termite” be a special solo category of work that homesellers agreed to up front. They decided it made more sense to do all repair negotiations during escrow.
But because it’s been part of the initial negotiations for so long, many agents are writing a Section 1 clearance into the contract anyway, just without the WPA form.
For those agents that don’t, then the negotiation will happen during escrow.
Either way, for now homesellers will continue to foot that bill most of the time.
But my prediction is that over time Section 1 pest control clearance will become less expected.
There’s your answer. Sorry for getting so technical!
