You certainly do, if you plan on getting almost any kind of financing. In virtually all areas of the country, lenders require a termite clearance before funding a loan. No clearance, no mortgage. You may also want one for personal reasons; just to be sure your house doesn’t have bugs!
The report normally covers termite infestation as well as dry rot and some other conditions. The inspector checks out all accessible areas of the home and either issues an all clear, certifying the home free from pests (the clearance is usually good for about 120 days), or indicates areas where pests were found and that the problem must be corrected before a clearance is issued.
If problems are found, they are usually in one of three categories. Category 1 is mandatory repairs. Termites, dry rot, or some other pest condition was found, and the pest must be removed and damaged materials often must be replaced. When you see a house with a tent over it, this is usually category 1 work. The seller normally pays for this.
Category 2 works usually is preventive in nature. No pests were found; a window should be re-caulked to keep moisture out or debris moved away from the house to prevent future termite infestation. This is optional work, which the buyers usually pay for. If you don’t want to do it, you don’t have to.
Finally, the last category reflects problems that aren’t covered by 1 or 2. For example, the inspector found moisture under the house. It’s not category 1, because there were no pests. It’s not category 2, because it’s unlikely to cause a future pest problem. It’s just noted for the attention of buyers and sellers. Usually corrective work here is not done. If it is, it’s up to negotiation as to who pays for it.
It’s important to understand that either party can pay for any or all of the work. It depends on what was agreed upon in the sales contract. As a buyer, however, don’t agree to pay for repairs (category 1 work) unless you have a very good reason for doing so (such as you’re “stealing” the place for an incredibly low price).
In most areas, lenders are only concerned about the house itself, not unattached decks, awnings, sheds, and so on. If that’s the case, sometimes a clearance can be obtained, even if pests are noted in those unattached areas, without having to do category 1 work. This can sometimes work to your benefit. For example, I once bought a home that had severe dry rot damage to an unattached deck. The cost of deck replacement was $3500. However, the following agreement was reached: it was pointed out to the termite company that the deck was not attached, and over some objections, a clearance was obtained. Then, the sellers gave me a $2500 allowance in the form of nonrecurring closing costs, because of the deck problem I was assuming. This saved the seller $1000 in deck repair and helped make the deal. I later put in a new deck myself at a cost of about $700 in materials, saving me some money as well.
A note of caution: beware of termite inspectors who insist on checking out the shower pan, particularly on second floor or higher levels. This involves plugging the shower drain and filling the bottom of the shower with water. If the pan leaks, water can pour down through ceilings and onto walls and floors doing considerable damage. Since you, as the buyer, required the inspection, some sellers will try to blame you for the damage and may ask you to pay for it. (Some states, such as California, may prohibit checking shower pans.)
In most areas the seller pays for the cost of having a termite inspection.
