Termite Inspection When Buying or Selling: Who Pays and What It Covers

A standard home inspection does not include a termite inspection. They are separate services performed by different licensed professionals. In many transactions — particularly those involving government-backed financing — a termite inspection is not optional. Understanding what it covers, who pays for it, and what happens when termites are found helps you avoid surprises in the final stretch of a deal.

What a Termite Inspection Actually Covers

The formal name used in most real estate transactions is a Wood-Destroying Organism (WDO) inspection. WDO is more accurate than "termite inspection" because the inspector evaluates for more than termites — they are looking for all organisms that destroy wood structure, including:

Subterranean termites. The most destructive species in the US. They live underground and build mud tubes to access above-ground wood. Mud tubes on foundation walls, piers, and wood posts are a primary sign. Colonies can cause significant structural damage over years before any visible symptoms appear on the surface.

Drywood termites. Common in warm coastal climates (California, Florida, Gulf Coast). Unlike subterranean termites, they do not need soil contact. They infest finished wood, furniture, and structural members directly and leave behind small pellets called frass.

Carpenter ants. Do not eat wood but excavate it to create nesting galleries. Common in the Pacific Northwest and Northeast. Often indicate a moisture problem since carpenter ants prefer damp or previously wet wood.

Wood rot. While not a living organism in the pest sense, fungal decay of wood is included in a WDO report because it is a structural concern with treatment implications.

The WDO inspector examines the accessible areas of the home — foundation perimeter, crawl space, attic, and visible structural members — using a probe and moisture meter to identify active infestations, previous treatment evidence, and structural damage from past activity.

Who Pays for a Termite Inspection?

The short answer is: it depends on location, loan type, and negotiation.

VA loans. The Department of Veterans Affairs requires a termite inspection in most states, and VA lending guidelines prohibit the veteran buyer from paying for it. This means the seller or the real estate agent customarily covers the cost. The inspection must be performed before closing and any findings typically must be remediated before the loan can close.

FHA loans. FHA does not mandate a termite inspection in all cases, but appraisers are required to flag any visible signs of wood-destroying insects. If the appraiser notes evidence of pest activity, the lender may require a WDO inspection and clearance before funding.

Conventional loans. No automatic requirement. Whether a termite inspection is ordered depends on the purchase contract, the buyer's due diligence choices, and the seller's willingness to pay.

Regional customs. In high-termite-risk regions — the Southeast, Gulf Coast, California, and Hawaii — termite inspections are so standard that local custom often dictates who pays. In Florida and many Southern states, the seller typically pays for the WDO inspection as a standard closing cost. In the Pacific Northwest, where termite pressure is lower, the buyer usually pays if one is requested.

The practical answer for buyers: ask your real estate agent about the local custom early in the transaction, and include a termite inspection requirement in your offer if you are in a region where termites are a known risk.

What Does a Termite Inspection Cost?

A WDO inspection typically runs $75 to $150 for a standard single-family home, though prices vary by region and company. This is inexpensive relative to the cost of termite damage — structural repair for severe termite activity can cost $10,000 to $30,000 or more depending on the extent of damage and the systems affected.

Treatment costs vary significantly by method. Spot treatments for localized drywood termite activity run $250 to $1,000. Whole-house tent fumigation for drywood termites costs $1,500 to $5,000 depending on home size. Subterranean termite treatment via liquid barrier or bait stations runs $1,000 to $2,500.

What Happens When Termites Are Found?

Finding evidence of termites or WDO activity in an inspection does not automatically kill a deal — it creates a negotiation.

Active infestation. The seller is typically expected to treat an active infestation before closing. Most lenders require clearance from a licensed pest control company as a condition of closing.

Previous activity with no structural damage. Common in older homes in high-risk areas. Evidence of prior treatment (treatment stickers, chemical-treated soil) with no active infestation and no structural damage typically does not require additional remediation. The buyer should document the finding and plan for ongoing preventative treatment.

Structural damage from termites. This is the costly scenario. Termite damage to floor joists, subfloor, sill plates, or structural posts is a material defect that affects the value of the home. The buyer can request that the seller repair the structural damage, provide a credit equal to repair costs, or both. If the damage is extensive, having a structural engineer evaluate the affected framing is appropriate.

For sellers: address any known termite issues before listing. Proactive treatment with documentation is far less disruptive than a buyer's inspector finding active activity at the worst possible time in the transaction.

Buying Without a Termite Inspection

Skipping the termite inspection is a calculated risk that depends on location. In the Pacific Northwest, upper Midwest, or high-altitude Rocky Mountain states where termite pressure is low, the risk is smaller. In Florida, Georgia, the Carolinas, California, or anywhere in the Gulf Coast states, passing on a WDO inspection is genuinely unwise — termite damage in these regions is common, often concealed, and expensive.

If you are buying in a high-risk area and your purchase contract does not include a termite inspection, add it. The cost is low and the protection is disproportionate.

The Home Inspection Checklist at firsthometoolkit.com/home-inspection-checklist/ includes a termite and pest indicator module covering what to look for at the showing stage — mud tubes on foundation walls, frass deposits near wood members, hollow-sounding wood, and soft spots in flooring. You cannot replace a licensed WDO inspector, but you can identify warning signs early enough to ensure the right specialist is involved before you commit to the deal.