What You Need to Know About Termites and Selling Your Home

Written by Posted On Wednesday, 10 March 2021 13:19

What you should know about termites and selling your home

We may not think of them the same way that we do about floods, tornados, or earthquakes, but termites are a natural disaster. At $30 billion in annual property damage, they are third only to hurricanes and cyclones in the money they cost homeowners. More than 600,000 American homes are damaged each year by termites, costing those homeowners—on average—$3,000 in repair and treatment costs.

For these reasons, termites are an important factor in the U.S. real estate market. Many states, lenders, and mortgage companies require sellers to disclose known termite issues, and experienced Realtors will always recommend that the buyer pays for a professional termite inspection. Termites can cause a sale to fall through or change the value of the home. In this article, we will review why termites are a major problem, where termite infestations are most common, and what both buyers and sellers should do to make the home sale process run smoothly.

What termites are causing the most damage?

Left untreated, all termites have the potential to cause significant damage to a home or building. It is the many subspecies of subterranean termites, however, that are the most destructive: 90% of all termite property damage is caused by these termites. Here are three of the most common and property-threatening termites here in the continental United States.

Formosan Subterranean Termite

An invasive species introduced to the United States from China in the twentieth century, the Formosan termite is a major problem. Fast-breeding, voracious, and impossible to ever fully eradicate, Formosan termite colonies can cause tremendous damage compared to other native termite species. Homeowners may have years to discover and treat a native termite colony before there is major damage to their home. When Formosan termites move in, that timeline to significant damage is as short as three months. Unsurprisingly, Americans currently spend $1 billion annually repairing Formosan termite damage—one-fifth of that spent on termite damage total.

Thankfully, the spread of Formosan termites has an important limitation: their eggs will not hatch in temperatures below 68 °F, which makes colonization outside the Sun Belt—the name for the warm-weathered part of the United States that extends from Southern California to South Carolina—difficult.

Arid-Land Subterranean Termite

Despite its name, the Arid-Land termite actually ranges across much of the United States. Arid-land termites are a major problem for homes in California, Arizona, Nevada, and the Rocky Mountain states.

Eastern Subterranean Termite

This is the most widely distributed termite in the United States, with a range from Vermont to Utah. These termites like things humid and moist, and will quickly establish themselves in a home and start to eat away at the structure itself.

What regions of the United States are at highest risk?

Very few places in the United States have low termite activity. Like all insects, termites are cold-adverse, which means only the northern reaches of the Rocky Mountains, the wind-swept Dakotas, the northernmost parts of the Northeast, and Alaska have low termite activity. The further south you go, the more common and diverse termites become. The Sun Belt and Hawaii are most at risk for termites.

It should be little surprise, then, that the cities with the most termite activity all fall in this region of the country. Out of the top-10, seven are in the Southeast, with Florida’s major metro areas—Tampa, Miami, Orlando, and Jacksonville—all on the list. However, termites can be found in many other places beyond the sun-drenched Gulf Coast or desert Southwest. Homes in New York, Portland, Denver, Chicago, and Minneapolis can all potentially have termites.

What do you need to know about termites when listing a home?

In many parts of the country, a prior history of termites is typically not a deal-breaker as long as the infestation has been dealt with by a professional and any termite damage has been repaired in advance of the listing. In the Sun Belt states especially, a common expression guides most home sales: “There are three types of homes: those that had termites, those that have termites, and those that will soon have termites.”

Buyer termite inspections

If you live in a region known for termite issues, expect the buyer to schedule a professional termite inspection during the period prior to closing—especially if your seller disclosure (more on this below) indicated a past history of termites.

Do note that extensive termite damage that has not yet been repaired or the presence of a current termite infestation may be enough of a reason for the buyer to back out of the deal—or to ask you to lower the price. This could impact the return you get on your home.

Seller disclosures

Many states require sellers to disclose any past or current termite infestations when selling their home. This can vary greatly from state-to-state: in some states, you are only required to disclose an infestation that you know about or are aware of at the time of the sale. In others, sellers need to hire a pest professional to inspect their home for termites and termite damage. Homeowners in states with no legislation on the matter still may need to disclose termites or termite history as a stipulation of the buyer’s lender.

Check with your local Realtor to learn how to comply with your state’s laws or the lender’s requirements and provide adequate termite disclosure to the buyer.

What do you need to know about termites when buying a home?

The region you live in and your real estate market should inform some of your attitudes toward termites. In a hot real estate market in a high-infestation place—such as Florida or Georgia—you might have difficulty finding a home in your price range that has never had termites. However, in North Dakota, the termite-free inventory may be higher.

A house having had termites is not as important as how they were dealt with by the current or prior homeowners. If the infestation was dealt with quickly, thorough repairs were made to the structure, and the homeowner has since enrolled in an annual termite inspection and treatment from their local pest control company, you probably have little to worry about—although you should still schedule a termite inspection of your own just to cover your bases.

Homes that have dealt with termites poorly or have structural damage are a much different story. If you buy, you will be on the hook for that damage. Even if you plan on moving forward, make sure you talk with your realtor and a termite professional about exactly what you are getting into.

Protecting your home

Given the outsized impact that termites can have on your home, its value, and your ability to sell it, it is in your best interest to be proactive in protecting your home from these cellulose-chomping invaders. If you live in a part of the country at high risk for infestations, schedule regular checkups from local pest professionals in your area. Once per month, take a walk around your home and look around the foundation for any termite tubes. Redirect water from hoses or AC drip lines away from the foundation.

Remember: you may not be able to prevent 100% of infestations, but this vigilance can help you catch them early and deal with them before major damage is caused. For more advice on protecting your home from termites and data about infestations, check out the infographic below.

Termite Damage

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