Can You Sell a House With Termite Damage?

Selling a house is never an easy prospect but now you have to deal with termite damage too?

If I needed to sell my house and I found out on inspection that there are termites my stress levels would go through the roof! I would have so many questions like:

Is it illegal to sell a house with termite damage?
Can you sell a house with termite damage?
Do I have to repair the damage or can I sell it as-is?
Who would even buy my house with termite damage?

Straight to The Point About Selling A Termite Damaged Home

You can sell a house with termite damage. Of course, selling a house that has been damaged by termites will require some extra attention but do not despair because with the right knowledge, you will get your house sold.

Speaking of the right knowledge…

This article will cover everything you need to know about selling a house with termite damage. We will discuss:

House Value
Active Termites versus Historical Damage
Property Disclosures
Who would buy a house with termite damage?
Is termite damage a deal breaker?

Because of this, you need to read this in-depth guide, if you want to know more about selling a house with termite damage.

Shall we begin?

Termites are responsible for billions in property damage yearly and are active in almost all states—except Alaska, whose freezing conditions are not conducive. They are also quite sneaky, and an infestation can remain hidden for long before it is discovered.

They can land you in the cross hairs of an undeserved legal suit if you sell your house for cash only for the cash home buyer to discover they have been nibbling at the wooden structure from the inside out. They can also make your listing stay longer in the market if the buyer’s inspector can catch their subtle warning signs.

This gets you thinking about whether it is possible to sell your house fast for cash with termite damage and if it’s even worth the trouble. The good news is you can sell a house with termite damage, but you have to disclose the damage to potential cash buyer before closing so that they know what they are getting into.

In this article, we will guide you through the available options if you need to sell your house with its termite infestation and how to go about them. We will also break down the situation so that you understand the implications. We know it’s more complex than your regular house sale.

How Do Termites Affect the House’s Value?

The overall effect of a termite infestation on the market price depends much more than the termites. Other factors like the prevailing real estate market and the house’s location also come into play.

Buyers can afford to be picky when there are abundant options to choose from in the market. Your property listed with historical or existing termite problems will be passed by frequently in such a market unless you set the price significantly lower than the market price to make it irresistible.

The house will be less stigmatized if a termite infestation is common in the neighborhood. Termites are harder to find in some cities than in others; they love tropical weather with its combination of warmth and moisture that they need to thrive.

In such places, their presence will not impact the house price much because the competition has the same conditions, and your average home buyer is better conditioned to accept the situation.

The takeaway from this is that you should take the initiative to get rid of termites before listing to maximize returns from the sale and increase your pool of prospective buyers. That said, the house still stands a chance to be bought with the termites, but at a lower price.

How Does Potential Structural Damage by Termites Affect the Sale of a House?

Can I sell my house with termites?

Potential buyers will generally keep off properties that seem to be money pits. A house that requires repairs straight from a purchase is not appealing. This is why you should make the necessary repairs and renovations after removing the termites if you consider listing the home. This makes the home much easier to sell.

The extent of the damage will influence the buyer’s willingness to take it on; they will be more inclined to take a risk when the house’s structural integrity has not been compromised.

Termite-induced repairs come at a cost and are normally not covered by insurance. If you can’t afford to pay for the damage, you indirectly can pay the buyer to do it by lowering your asking price or selling it to a cash buyer willing to take over the compromised house as it is.

Can You Sell a House With Active Termites?

Is it hard to sell a house with termites?

It is not always bad news when a pest inspection reveals ongoing termite activity. There are places in the country with such a high prevalence of termites that a minor colony is considered normal.

Your house will not be the only listing with termites, and it will come down to the size of the colony and the amount of effort required to salvage the situation.

The buyer might request that you follow through with termite treatment with a pest control company at your cost and cover any repairs needed because of the termite problem.

Alternatively, you can renegotiate the terms of the agreement and give them a discount on the price so they can fix it themselves if you lack the time or capacity to do the work yourself and they are agreeable.

Can You Sell a House With Historical Termite Damage?

Suppose you have already treated the house for termites. In that case, home buyers will need documentation of proof along with evidence of any structural repairs that were made and/ or direction on what still needs to be done to restore the building following the termite problem.

Professional termite inspectors can distinguish between evidence of past and prevailing termite activity. They will issue a statement to that effect which the buyer might consider a green light to proceed with the transaction.

When Is Termite Infestation a Deal Breaker?

It is worth noting that the regular buyer looking for a home to settle their family may still draw a hard line against any history of termites despite your best efforts to treat and repair the house.

They are also subjected to their lender’s policies which might be against financing properties associated with termites.

Some termite infestation cases are too advanced for a regular buyer to deal with. The colony might have grown to millions of termites before any action was taken and now requires advanced extraction methods.

This may have caused extensive termite damage. The structural damage to the house might also be so extensive that its structural integrity is compromised.

You should include specialized house buyers in your prospect list as a fallback for situations like these.

These buyers can buy the house in cash without seeking approval from financiers and will make their judgment call on the termite situation on the spot. You will avoid a lot of back and forth, and their offer will come early, although slightly lower than the market price.

Inspecting the House for Termite Damage

It is advisable to engage your own expert inspector before listing the house so you can detect this sneaky menace in good time. A termite inspection also provides an opportunity to detect the presence of any other wood-destroying insects like carpenter ants, thereby covering all your bases.

They can differentiate the sound produced by a hammer hitting a hollow beam consumed from the inside by termites and a solid one. They will also know where to look for the pile of wings that termites shed as they go through their life cycle or the tiny brown pellets of excrement that are never far away.

You can also engage a wood repair expert to assess the structural damage caused and approximate what it will take to restore it. This helps you decide if the cost of extermination and repair to stage the house can be justified by the value addition.

Doing your own assessment will help determine the listing price and set bargaining limits. You will know how to address any contingents placed on the purchase agreement that may be pegged on the buyer’s approval of their termite inspection report.

Implications of Full Disclosure of Termite Damage

The law requires you to disclose any known history of termites and house defects to the buyer before closing the sale.

Your typical buyer will order for their own termite inspection the moment you mention it, whether it has been handled or not. If the buyer is taking out a mortgage, chances are that the lender will require a termite inspection along with the general home inspection before the sale is closed.

Who Pays for the Termite Inspection?

This expense is typically borne by the buyer, whether they personally requested the inspection or their lender did. Once the seller discloses the house’s termite history, the buyer must schedule any necessary inspections before closing the sale.

As the seller, you will only pay for an inspection if you sanctioned it to check on the state of the house. The buyer and/ or their lender will not rely on a report from an inspection you sanctioned but will conduct their own independent inspection.

What Options Do You Have If the Termite Inspection Report Is Unsatisfactory to the Buyer?

Many home purchase agreements nowadays are contingent on the results of inspections, such as termite inspections meant to reveal hidden complications and hazards. The buyer can back out of the contract without legal repercussions if the house fails the termite inspection.

Experienced real estate inspectors know that the mere presence of termites doesn’t mean the house is irreparably damaged and should be condemned. They also consider where the termites were found, the size of the colony and how long they had to inflict damage before they were discovered in their report.

Some buyers will opt to renegotiate the selling price, especially if the damage is not extensive, while others will ask for specific renovations after the inspection.

You are not obligated to fix anything uncovered during inspection and there are certain things you should not fix when selling your house; your incentive for making the repairs, in this case, will be to prevent the buyer from withdrawing their offer. If you feel the task is too big for your resources, you can politely decline and let the buyer terminate the contract.

It is better to sell the house slightly below market rate than to undertake massive renovation projects that will consume a lot of time and resources yet are not guaranteed to erase the termite infestation stigma sufficiently to restore the property’s market value.

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