RESIDENTIAL REAL ESTATE CONTRACTS: SECTION 16
This is a brief summary of real estate contracts. This summary does not cover all aspects of the contract. This video has been made specifically for Real Estate Agents to use as an unofficial educational resource. Nothing in this video is intended to convey legal advice or best practices in any field. This video is only intended to give general advice on broad topics relating to contracts and the closing process at large. For legal advice please contact an attorney and for lending advice please contact a lender.
16. TERMITES
There are two types of termite bonds you can have on your house:
Treatment bond: If termites are found during an annual inspection, the termite company will treat for them and you will not be charged an additional fee.
Replacement bond: If termites are found during an annual inspection, the termite company will treat for them and will replace any wood that has been destroyed.
It is much less expensive to get a treatment bond, and these types of bonds are significantly more common in our area. Either bond can be transferred to a new owner and this is generally cheaper than ordering an entirely new bond on the property. Always ask the seller if they have an existing bond, and if so make sure to let your buyer know they can have that bond transferred; the termite company is always happy to do this as it is continued business for them and they already have a history of the property since they’ve presumably been treating it for years.
The contract states that the termite letter will be delivered to the attorney in no less than 7 working days; more often than not we don’t receive this letter until 3 days prior to closing or even the day before or the day of closing. It is extremely important to get your termite letter to the attorney as soon as possible in order to avoid a closing delay; if the inspector says that the house has fungus, which is very common in our area due to the climate and wetness in crawlspaces, you will need time to have someone come out to treat for this and fix the problem. Repair usually only takes a day or so, but the technician won’t necessarily be able to come out the day you request it; sometimes it can take a week or more to get a technician to come out and perform the work. If you have scheduled the initial inspection very close to your closing date, you may need to add an extension addendum in order to get any issues fixed before closing.
The Realtor can order the termite inspection as soon as the contract is ratified and ask for the fee to be paid at closing, in which case this fee will appear on your closing statement. If for whatever reason closing doesn’t happen, the purchaser is still obligated to pay this fee if the inspection has been completed.
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[INSERT SAMPLE REAL ESTATE CONTRACT HIGHLIGHTED AND CORRESPONDING NOTES SHEET SIDE BY SIDE]
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