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Old 10-13-2010, 09:37 PM
Kyle77's Avatar
Kyle77 Kyle77 is offline
Join Date: Oct 2007
State: Mississippi
Professional Status: Licensed Appraiser
Posts: 222
Default Termite Contract Effect on Value

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?
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Old 10-13-2010, 10:19 PM
Walter Kirk Walter Kirk is offline
Join Date: Jun 2003
Location: Audubon, N.J.
State: New Jersey
Professional Status: Licensed Appraiser
Posts: 4,418

Do buyers in the market area normally expect a termite contract? Do they pay a premium for a termite contract?
Old 10-14-2010, 05:03 PM
William Rightsell's Avatar
William Rightsell William Rightsell is offline
Join Date: Oct 2004
Location: Greensboro, NC
State: North Carolina
Professional Status: Certified Residential Appraiser
Posts: 842


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....

Old 10-14-2010, 05:09 PM
Tom Woolford Tom Woolford is offline
Join Date: Nov 2005
Location: Nature Coast
State: Florida
Professional Status: Certified Residential Appraiser
Posts: 5,448

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.
Some mornings, its just not worth chewing through the restraints.
Old 10-14-2010, 05:13 PM
Mountain Man Mountain Man is offline
Join Date: Jan 2002
Location: GA
State: Georgia
Professional Status: Certified General Appraiser
Posts: 15,446

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.
Old 10-15-2010, 10:31 PM
JAgnello JAgnello is offline
Join Date: Oct 2010
State: New Jersey
Professional Status: Real Estate Agent or Broker
Posts: 16

I agree with William. In my area itís 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 youíre dealing with something beyond the ordinary and totally out of the norm, I doubt it would have any impact on value.
Realtor specializing in the sale and purchase of Residential Real Estate in Southern NJ.
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