Realtors: What is the purpose of a termite report?

What is the purpose of a termite report?

A Phoenix realtor/broker…being sued by her client was asked during a recent deposition. “What is the purpose of a termite report?” The agent with over 16 years experience was caught off guard and could not muster an adequate response. “I think it is to tell if the home has termites!?”

The purpose of a termite report in a real estate transaction is to convey information to the buyer, so they can make the right buying decision. Designed to protect the consumer, the State of Arizona has enacted specific Statutes along with rules and regulations dictating what information should be included on a termite report.

One of the top violations investigated by the State of Arizona is the failure to properly complete a termite report.

A real estate agent/broker is charged with protecting the interests of the client.

As a realtor…do you personally review the termite report? Do you discuss the findings with your client?

The Phoenix realtor/broker being sued…did not. She called title…“Is the report clear?” The escrow officer advised…“It’s clear… no termites.”

That agent/broker has $2000 out of pocket deductible expenses and is being sued for $1.6 million (the cost of the home). Her insurance company hopes to settle for $800,000.

The home in this transaction did not have termites…the inspection reported evidence of previous termite activity and treatment. The sellers who had only lived in the home for 18 months had no knowledge of a previous termite history. The seller’s disclosure reported no known termite history.

Shortly after close of escrow the buyer discovered extensive termite damage during remodeling.

The buyer contends that had his agent properly reviewed the termite report and conveyed the findings… he would have either not bought the home…and/or requested additional information concerning the termite history.

As in many cases the termite report was not signed by the buyer at close of escrow nor was he provided a copy. He was told by the agent/broker that the report was “clear.”

If you want to check the history of a property 602.255.3664 a free service offered by the State of Arizona.

Question of the month:

The contract nor the lender is not requiring a termite report…my buyer wants to know if he should pay for a termite inspection?

Yes…most real estate agents are aware that Phoenix has a healthy termite population and that extensive damage can be caused by a termite infestation. A $50 termite report can be the best insurance for your client and for the agent. You serve your client best when they have as much information as possible to make the right buying decision!


If you have a question(s) sent it to Tustep@aol.com or visit us at http://www.billstermiteco.com/ “We know Arizona termites!”