Question:the law regarding termite clerance letter during house purchase (bank owned, sales) - Tennessee (TN) - City-Data Forum

June1102 · 10-23-2008, 07:33 PM

Hi forks,

Does anybody know the TN law regarding the termite clearance letter. We are buying a bank owned property. Our inspector said TN law requires the seller to give a termite clearance letter no matter whether this is bank owned/AS IS or not. However, our agent (dual agent) said we buyer need to hire one of those companies to check and give the letter, since there is a sentence in the binding contract says: "Seller shall be limited to $0.00 for Lender required repairs; $0.00 for Termite inspections/repairs and $0.00 for the following repairs n/a."

If there is such law in TN, can you please let me know where can I find it. I need to show the agent that sentence.

Please HELP!

mbmouse · 10-23-2008, 08:05 PM

I hate to ask you this, but did you sign the contract with that clause in there?
If so, I believe contract supersedes.

I believe the phrasing is that by signing it, you "waved" holding the seller to that clause about termite inspections.
But I could be wrong, where are all the Realtors on here??? What do you guys think?

EVAunit1981 · 10-23-2008, 11:22 PM

I used to sell real estate.

I would really want to look at the contract to be 100% sure, but here is my 2 cents.

It sounds to me like mbmouse is right. You signed a contract which holds the Seller responsible for $0.00 of the required termite inspection. Yes, termite inspections are required on all sales in the state of Tennessee. I don't think this can be wavied even if both parties wish to have it waived.

Unsoliticed advice: Having wasted a few years of my life trying to eek out a living in the world of real estate, I have to tell you that you should never under any circumstances have a dual agent! Almost all Realtors that are honest and ethical will not be a dual agent. There is too much risk and liability involved. Also, you really are not able to service both of your customers fully.

Agents that have an REO/Bank owned property listed usually handle a lot of such properities. Banks like to find someone that is an effective salesperson, and then give that person all of their business (listings). If it really comes down to it, who do you think your agent will want to help more, you or the bank that will very likely give him repeat business?

shadowwalker · 10-26-2008, 10:23 AM

When we sold our house, we had to pass one of these. One question to ask the inspector. Show me the damage.
And if they show you some holes on wood down by the foundation or support beams (on the bottom by the ground) make sure it is NOT facial damage done by other bugs testing the wood. This almost didn't let us sell our house. One inspector was inexperienced and the other one that looked after I questioned it. Said it was not termites.

hiknapster · 10-26-2008, 03:13 PM

Yes. I just bought a house. Had the termite inspection and certificate. We had in the contract that the seller would cover the costs.

jchometeam · 10-26-2008, 07:11 PM

I agree with those who said that you have signed the contract allowing the bank to not pay for this fee. If the lender requires it, and ive never had any that didnt, you may have to pay the $60-$70 for it. I hope that you have an inspection period allowing you to not buy the property if the termite letter shows damage.

Im not beating up on June for signing the contract that way, as many of the large banks simply will not pay for anything like that. They dont listen to their agents very well, they would rather hold onto it until someone comes along either with cash or that is willing to pay for all these costs.

I agree with the previous remark about dual agents. While its technically legal in Tennessee, I would never do it and dont consider it ethical.

Jeldridge · 05-05-2017, 03:47 PM

It's not actually a termite letter, it's a wood destroying insect report. Any evidence of a wood destroying insect is suppose to go on the report. Carpenter ants, carpenter bees, any wood borers, of course termites. And although you can't put it on the letter, if the inspector finds evidence of a wood destroying fungus he/she is supposed to put it on the graph. And yes all real estate has to have a letter

Hey_Hey · 05-06-2017, 08:58 AM

Quote:

Originally Posted by Jeldridge

It's not actually a termite letter, it's a wood destroying insect report. Any evidence of a wood destroying insect is suppose to go on the report. Carpenter ants, carpenter bees, any wood borers, of course termites. And although you can't put it on the letter, if the inspector finds evidence of a wood destroying fungus he/she is supposed to put it on the graph. And yes all real estate has to have a letter

No, not all real estate sales require a wood destroying insect report. There is not a state law that requires this. Many banks may require a letter, but many do not. I have bought and sold several properties for both personal use and investment use and have never been required to have a wood destroying insect report. The caveat to that is that I have never had to use a traditional mortgage so banks a more lenient. This may be a case in which using traditional Fannie/Freddie/VA/FHA loans requires it, but that does mean it's a legal requirement. In that regard it's similar to an appraisal: most financing requires an appraisal but there isn't a legal requirement to have one.

As to who pays for termite inspections and treatments, that's up to the contract signed between parties. Typically, inspections are paid for by the buyer (if the seller pays then you have a perceived conflict of interest). Once the report is returned then it is open to negotiation whether the buyer or seller wants to remediate the problem. Currently, buyers are in a much weaker position to negotiate things like this.

Beretta · 05-06-2017, 10:58 AM

Not sure why a thread from 2008 was revived and with false information to boot!

Hey_Hey is correct. It is a termite inspection letter and it is to be paid by the seller.

If the buyer asks for something else, or there is something else required by a local municipality that is another matter and that is not what the OP was asking.

Hey_Hey · 05-07-2017, 12:57 AM

Quote:

Originally Posted by Beretta

Not sure why a thread from 2008 was revived and with false information to boot!
Hey_Hey is correct. It is a termite inspection letter and it is to be paid by the seller.

There isn't anything that says the seller must pay for it. If a seller doesn't want to pay for a termite inspection letter, and the financing bank requires one, then the buyer could be on the hook for paying for it if they want the house.