Waiving Termite Contingencies

February 17th, 2015


I sometimes get asked about waiving one or all contingencies in a real estate contract. This helps make for a more aggressive offer in a competitive sellers market. The main contingencies in most real estate contracts are the appraisal contingency, the financing contingency, the termite inspection contingency, and the home inspection contingency. I am not a proponent or an opponent of any of these strategies. I simply want to discuss the pros and cons of each since it is a question I do get. In this blog I’d like to discuss waiving the Termite Inspection contingency.

This is the contingency that is most frequently waived. I think it’s either because a pre-inspection was done where no termite activity or damage was found. Or it is because the buyer feels like termite damage cannot be that expensive to treat and repair. Maybe they feel it’s a low risk, low cost problem to fix if there is a termite issue.

I am not sure I agree with that. If you look at this map of termite activity it shows much of the US has at least moderate to even high risk of termite activity. What if termites have eaten away much of the framing? What if the expense to repair termite damage is high? Simply having termite activity with no damage is one thing, as treating for termite is not overly expensive. But if there is extensive termite damage you may overpay for a home without doing a termite inspection to check first.

Think it through carefully. Maybe get a pre-inspection done first before waiving a termite inspection contingency.

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Brian Martucci is a loan officer for Capital Bank Home Loans, a division of Capital Bank, N.A. He has been in the mortgage industry since 1986 and has served in a number of roles, including loan processor, loan officer, mortgage broker, branch manager, and vice president. Brian Martucci – NMLS# 185421. His opinions do not necessarily reflect the opinions and beliefs of Capital Bank Home Loans or Capital Bank. Capital Bank, N.A.- NMLS# 401599. Click here for the Capital Bank, N.A. “Privacy Policy”.

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