can eat up home's resale value
My wife and I are about a year away from selling our house and have
just recently discovered termites. We've had it thoroughly treated,
by a company that offers a yearly warranty stating they will treat
any future termite problems. How does the history of termites affect
the market value of a home, and what is the proper way to disclose
this information to a prospective buyer? -- Nate
Indeed, a record of termite infestation -- particularly
in a house that has been treated more than once -- can reduce the
resale value of a home well after the infestation has been controlled,
I'm sorry to inform you. But it's not the end of the world.
To help soften this, get another termite inspection
prior to putting the house on the market to make sure it's all clear
of infestation. Then present that as part of the previous termite
report -- which will have a diagram of the structure and past treatment
locations -- and part of the sales package along with your disclosure
of any other possible defects or treatments. The buyers will also
want to know if your treatment warranties will be transferable to
them, and for how long.
In many places, it is standard practice to ask the
seller to pay for a termite inspection and to provide a written
certification stating that the property is all clear. So, depending
on how long the selling process takes, you may have to pay for a
reinspection, given the property's history. They are relatively
cheap ($75 to $100) and are usually done independently of the standard
There's no upside in trying to hide the problem.
Besides the fact that it would be fraudulent to do
so, most buyers will have the home inspected before closing, and
a trained eye may detect previous treatment. The buyers may also
hire their own termite/pest inspector to take a closer look in light
of your treatment disclosure.
Even if you try to sell the house "as is,"
it does not relieve you of your obligation to disclose a condition
substantially affecting the habitability or value of the property
-- the termites in this case -- even if previous treatment is not
obvious. Hopefully, you caught the infestation in the early stages
and there was little damage to the home.
As to the precise impact it may have on the resale,
it depends on a number of factors. The more your home is composed
of wood, the greater the potential for termite damage, of course.
Older wood homes are a little more suspect. However, a past infestation
does not necessarily increase the chances of a future one, particularly
if your treatment included preventive measures such as the installation
of protective barriers. But that doesn't mean the other party won't
use the past infestation as a bargaining chip.
You may lose a little because of this, but if your
home is in otherwise good condition and past damage was minimal
and satisfactorily repaired, don't give away too much.