Termite damage during closing: should this be a deal breaker?

Question

I'm in the process of closing on a property in NC, and the visual inspection has turned up evidence of termite damage and previous treatment:

"Termite tubes in between rear left garage slab wall and drywall bottom. Damaged baseboard trim at laundry room, hallway and front bedroom where walls share with garage walls. Also in side of door frame trim at front bedroom on hallway side. Treatment holes noted in garage slab, front and rear porch slabs and foundation slabs around home."

I'm not planning extensive rehab on this property, which is otherwise rent-ready. Will this be a substantial repair cost or challenge down the road?

My biggest concerns are around:

1/ How do I know the current extent of the damage? What's the risk that framing has been compromised?

2/ Should I be concerned about recurrence? Am I likely to have ongoing termite issues?

3/ What should I estimate for the repair and treatment costs? Should I call out a GC to place an estimate?

Ofer Eyal · Answer

@Nate Desmond There is risk here and you should ask yourself if it is a. containable, b. worth the benefit and c. what are you willing to pay for it.

To answer a. you should ask yourself what is the result of a catastrophic outcome and if you can contain it? Like is this your only REI property or one of dozens? If the former - this can have a serious impact on your overall investment. If the latter - this might be a bump in the road..

If the answer to a. is 'yes' then move to b.: ask what do you expect to profit from sticking to this property and is it worth it to take a risk. If still 'yes' move to c. an ask what premium do you expect the seller to give you (i.e: discount) to make it worth your while should summer comes and you find out that not only you have 10,000's of non-paying residents in the house but that those are literally eating into your equity...

Get expert advice on this from people who specialize in termites - both on risk, damage, feasibility of containment and cost of repairs.

REI is much about risk management.

Hope this helps and good luck!

Michael Plante · Answer

Did you have a professional house inspector look the house over?

I would call a few termite companies to give estimate to treat.  They may say no active termites

Tom Harkins · Answer

@Nate Desmond I re-read your post, treatment holes around the home is a good sign. It means a previous owner took action. One of my houses has treatment holes as well. A termite inspector said to look for swarming behavior in the summer- if they are active you’d be able to tell then. In my case they weren’t and the damage was confined to a small area, so it wasn’t a deal breaker.

Milind Shastri · Answer

Our first house had termites. We found them 2 days after closing, and we were devastated back then. Well, a few days/weeks later we figured out that this sounds horrible but can be fixed in <$800-$2000. Now we look for properties with termite damage that everyone is scared of.

Tom Harkins · Answer

@Nate Desmond Unfortunately termites are usually a question mark- it could be nothing or it could affect the whole house. Get an inspection by a professional WDI company who can also recommend a treatment plan if needed. You should then have a better idea of the extent of the damage/repairs.

Termite damage during closing: should this be a deal breaker?

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