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Termite Contract Effect on Value

Discussion in 'General Appraisal Discussion' started by Kyle77, Oct 13, 2010.

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  1. Kyle77

    Kyle77 Junior Member

    0
    Oct 17, 2007
    Professional Status:
    Licensed Appraiser
    State:
    Mississippi
    Wanting to know your opinions on what kind of value influence a termite contract from 3 years ago would have on a property. At the time of sale it was treated and didn't have currnet infestation but is under a termite contract. No signs of infestation at the time of inspection. Would an adjustment be warranted for ongoing termite treatments and a comment calling for a new termite inspection?
     
  2. Walter Kirk

    Walter Kirk Senior Member

    21
    Jun 24, 2003
    Professional Status:
    Licensed Appraiser
    State:
    New Jersey
    Do buyers in the market area normally expect a termite contract? Do they pay a premium for a termite contract?
     
  3. William Rightsell

    William Rightsell Member

    0
    Oct 22, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    North Carolina
    Kyle...

    This is a non-issue.

    If there is no current infestation then what is the problem?? Just because they have a pest control contract and have had prior treatments is no reason for an adjustment.

    Suppose it was an A/C maintenenace contract?? Would this have a negative (or positive) effect on value?? I doubt it, as the cost of such contracts are usually less than 200 or so annually.

    "Ongoing termite treatments" is merely good maintenace...I dont possibly see how this could be a negative.

    And let the lender decide if they need a termite report. Your job is merely to tell the lender if you see any current infestation or any damage from a possible previous infestation which hasnt been repaired...THEN you determine adjustments based on the data available to you.

    Hope that helps....

    todd
     
  4. Tom Woolford

    Tom Woolford Elite Member

    94
    Nov 20, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    Florida
    A house is expected to be free of termites. how it got, or stayed that way, is immaterial. I seriously doubt a paired sales analysis would show any value to the contract. The market just is not that sensitive. Now if it had evidence of past infestation, thats a whole nuther thing.
     
  5. Mountain Man

    Mountain Man Elite Member

    35
    Jan 15, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Georgia
    This is no different than those worthless home warranties some buyers want and negotiate. When selling, whether it's a termite bond or a home warranty, I'm not going to let a $500 certification stop me from closing.
     
  6. JAgnello

    JAgnello New Member

    0
    Oct 14, 2010
    Professional Status:
    Real Estate Agent or Broker
    State:
    New Jersey
    I agree with William. In my area it’s quite common for a homeowner who has had previous treatment done to have a service agreement which typically includes a yearly inspection and ongoing treatment for termites. If anything it is good preventative maintenance and it should help to give the buyer peace of mind. Like Tom said, unless you’re dealing with something beyond the ordinary and totally out of the norm, I doubt it would have any impact on value.
     
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