What is a pest report? And what is its importance in purchasing a home?

One of the steps involved in buying a home is the inspection process.  The real estate contract includes a buyer's investigation period, during which time a buyer can order an inspection for the property. In a competitive market such as the Bay Area, sellers often provide inspections up front and as a result, buyers often waive the inspection contingency in order to strengthen their offer.  Since a home is bought 'as is' in its present physical condition and sellers are not obligated to correct any problems found in these reports, it's important that buyers understand the purpose of them and what the local customs are.

One of the main reports is the Pest Report, aka the Termite Inspection, which is typically required by the buyer's lender in order to fund their loan.  This report looks for signs of damage or infestation on any part of a home’s structure, including wood-destroying organisms such as: termites, beetles, dry rot, fungus, damaged wood and conditions conducive to pests such as standing water and leaks.  The report is separated into two separate findings: Section 1 identifies active infestations, while Section 2 identifies conditions deemed likely to lead to those infestations.

Because many Bay Area homes are over fifty years old, it’s not uncommon for pest reports to total in the tens of thousands of dollars.  Sellers are under no obligation to fix anything; however, more and more we’re seeing sellers spend the money upfront to remedy pest issues in order to present the home as clean as possible and yield a higher return.  And it works!