I'm working on closing my first rental property and everything was going according to plan until the termite inspection revealed prior damage and higher than normal wood moisture content in the crawlspace. It's a 800 sqft 2/1 here in the upstate of SC. Purchase Price was $72k.
The report reads as follows:
Infestation 4- Excessive moisture conditions; wood moisture 23% in left and right front quadrant; 20% center. There was dead air space at the front due to no foundation ventilation.
Damage- the front sill and sub floor, the center beam, damage under some old plumbing at the rear center; tube scarring on numerous floor joists. Powder post beetle holes in substructure.
My question is this, what to do now? Should I ask for a reduction in price or just walk away? Thank you in advance for your help!
If I were writing the offer, I'd evaluate the property based on the cost of this repair by either asking for a price reduction equal or greater than the price of repair, or for the seller to remedy the situation prior to close. If the deal still works even with you paying for the damage, that may be something to consider as well, but I'd definitely push for a price reduction nonetheless. If you are not used to dealing with termite damage or are feeling uneasy about it, walking away isn't the worst option either. Sometimes the best deals are the ones that are not made.
Based on your posting the damage seems to be extensive, especially since it’s affecting the structure of the home such as a floor beam, sill plate and subfloors.
It appears there is active termites as well as a beetle issue and both must be resolved before repairs can de done.
You didn’t mention home value, just purchase price so it’s difficult to say what to do from this point.
At a minimum, I would have the termites and beetles dealt with and get a bond from the termite company to cover the first year for more treatment.
Also, have a licensed contractor give you a repair estimate. Keep in mind that they usually find additional damage once walls are opened up and that will cost more. Since the sill plates are affected, it’s safe to assume some wall studs may also be damaged.
If the property is not worth much more then the purchase price, personally I would walk away.
Get a contractor in to give a price.
Practically all older houses will have some pest damage. It could be minor or no structural damage, and just a matter of staying current in termite treatments. Or it could be a multi-thousand dollar fix. There’s no way of knowing with just that assessment.
It sounds like there’s nothing active, which is good.
It might still be a great deal if you can get the price reduction. They at the very LEAST should come down a few thousand dollars right off the bat. It sounds like it would take more than that to replace the wood, sheetrock, repaint, etc. etc. - but do you need to replace it? I just got a thorough treatment for termites in Orlando for $600 with a 1 year bond for free re-inspections and treatment within 1 year if the termites come back. This included drilling holes underneath the crawl space from outside (No basement in house) so the poison could get very deep under the ground.
My point is its not that expensive to treat for them, you probably don't need to "tent'' the house to fumigate or anything like that, beware of good exterminator salesmen that convince you to spend several thousand dollars on treatment. Its not necessary!
What gets expensive is ripping out walls and wood and replacing it. It also costs you in loss of rent!
Let us know what you decide to do!
Depends on how good of a deal you are getting. If there is 5k more in repairs but you are already getting the place at 50pct discount, don't miss the forest for the trees.