Termite inspections are typically not required. But, let’s learn about when we do need to review the report.
The VA loan is the only product which requires a termite report to be completed and reviewed by us. The only exception is if the buyer is using VA financing to purchase a condo that does not touch the ground.
On any loan product, if we or the title company are made aware that a termite inspection exists, then we are required to review it. On rare occasions where damage is obvious, the appraiser may report that there is termite damage, in which case we’d need to investigate further.
We are usually only made aware of a termite inspection’s existence when the agent sends the report to the title company to place the inspection fee on the closing disclosure.
If an agent sends the termite inspection to us or to the title company, we will need to review the inspection. Further steps and hoops to jump through are required in the following two scenarios:
- If treatment is recommended, treatment must be performed prior to settlement and we will need to receive proof of treatment.
- If there is structural damage to the property, a contractor will need to repair the damage, provide photographic proof of its completion, and certify the work and structural soundness of the property. A certification is a signed document that states the work was completed and the property is structurally sound, has the contractor’s name and license number, and is signed in pen.
In cases where there is both treatment recommended and also structural damage, both are required.
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