Understanding Pest Inspection Reports: A Key Guide for Home Buyers and Sellers

What is a Pest Inspection Report?

• Section 1: Immediate threats, including active infestations and areas with existing damage.
• Section 2: Potential future threats that might require monitoring or preventive treatment.

Knowing the difference between these sections can help you make informed decisions in negotiations, repairs, and budgeting for future maintenance.

What is Section 1 Work?

Section 1 work includes any direct evidence of infestations or damage, such as active termite colonies, dry rot, or fungi. Because these conditions are seen as immediate threats, lenders typically require that they be addressed before they’ll approve a loan. In most cases, this means the seller will need to clear these issues or hold funds in escrow to ensure the work is completed after closing.

For example, if a Section 1 finding indicates termite damage in the foundation, the lender may request termite treatment and repair of the damaged wood prior to funding the loan. This is particularly common with FHA, VA, and USDA loans, as government-backed lenders are strict about property conditions for buyer protection.

Why Section 1 Clearance Matters to Sellers

For sellers, understanding the requirements of a pest inspection report and proactively addressing Section 1 issues can speed up the sale process and make your home more attractive to buyers. Here’s why:

1. Financial Security: Section 1 issues often involve costly repairs. By requiring that these be cleared before closing, you avoid unexpected expenses post-purchase.

2. Home Safety and Condition: Pest damage can compromise the integrity of your home’s structure, which is why lenders insist on a clear report. A thorough pest inspection helps you avoid potential safety hazards, which can affect property insurance and resale value.

3. Loan Approval: Many lenders won’t approve loans if there are unresolved Section 1 issues. By understanding the report, you can avoid delays or even denials of financing.

What to Look For in a Pest Inspection Report

When reviewing a pest inspection report, pay close attention to any items flagged under Section 1. Look for descriptions of the affected areas and understand the proposed remediation process. Key items often found under Section 1 include:

• Active Termite Infestations: Usually requires fumigation or spot treatments.
• Dry Rot or Fungus Damage: Wood replacement and treatment are common solutions.
• Water Damage: Leaks that cause wood damage are often noted, as they attract pests and weaken structures.

Final Takeaways

Reading and understanding a pest inspection report is key for both buyers and sellers. Sellers can benefit from preparing their homes and potentially increasing their appeal to buyers, while buyers gain security, knowing that the property is safe and compliant with lender standards. Always consult with your real estate professional for guidance on addressing and negotiating pest inspection findings to keep the process smooth and avoid surprises.

Contact 360 Real Estate Pros for expert assistance in navigating pest inspection reports and ensuring a smooth transaction. We are here to simplify the real estate process and amplify your real estate experience.