About to close first house - inspection report revealed TERMITES!

Greensboro, North Carolina
First-Time Home Buyer
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About to close first house - inspection report revealed TERMITES!

Murtuza Bengali
Member since 2022 · 16 posts · 5 votes

Hello dear BP members,

We are rookie investors who have been studying the markets, talking to agents, property managers and fellow investors diligently since the past few months. After going through multiple deals and failing to acquire any properties we finally secured a conditional approval on our bid for a 1950 SFR in Winston-Salem, NC two weeks ago.

Our due diligence period ends on February 28th. We new when we bid that the house needs about $8K to $9K worth of refurbishment. However, the inspector recommended a termite inspection which has revealed infestation from the under the crawl space all the way up to the attic. By the looks of it only random wood members in the foundation have any evidence of treatment but the rest of it, including window frames, interior foundation walls and attic show no sign of treatment. This possibly points to years worth of neglect from the owner and no annual termite checks. (I'm attaching the copy of the report for your reference below)

My question to BP members is this. Would you recommend proceeding with this deal or back out? In your experiences are termite infestations of this nature (from the foundation up to the attic) solvable. If yes how much approximately can one account for such a repair. Any words of advice on how to proceed will be greatly appreciated, especially since NC has a due diligence component on top of earnest money which we now stand to lose if we back out.

Thanks in advance for your guidance!

Murtuza

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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
4y
Quote from @Murtuza Bengali:

Hello dear BP members,

We are rookie investors who have been studying the markets, talking to agents, property managers and fellow investors diligently since the past few months. After going through multiple deals and failing to acquire any properties we finally secured a conditional approval on our bid for a 1950 SFR in Winston-Salem, NC two weeks ago.

Our due diligence period ends on February 28th. We new when we bid that the house needs about $8K to $9K worth of refurbishment. However, the inspector recommended a termite inspection which has revealed infestation from the under the crawl space all the way up to the attic. By the looks of it only random wood members in the foundation have any evidence of treatment but the rest of it, including window frames, interior foundation walls and attic show no sign of treatment. This possibly points to years worth of neglect from the owner and no annual termite checks. (I'm attaching the copy of the report for your reference below)

My question to BP members is this. Would you recommend proceeding with this deal or back out? In your experiences are termite infestations of this nature (from the foundation up to the attic) solvable. If yes how much approximately can one account for such a repair. Any words of advice on how to proceed will be greatly appreciated, especially since NC has a due diligence component on top of earnest money which we now stand to lose if we back out.

Thanks in advance for your guidance!

Murtuza


 Every house with a yard in the Mid-Atlantic has termite damage. The question always is how much. Words on paper dont reveal anything. Only visuals can help here.

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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    4y
    Quote from @Murtuza Bengali:

    Hello dear BP members,

    We are rookie investors who have been studying the markets, talking to agents, property managers and fellow investors diligently since the past few months. After going through multiple deals and failing to acquire any properties we finally secured a conditional approval on our bid for a 1950 SFR in Winston-Salem, NC two weeks ago.

    Our due diligence period ends on February 28th. We new when we bid that the house needs about $8K to $9K worth of refurbishment. However, the inspector recommended a termite inspection which has revealed infestation from the under the crawl space all the way up to the attic. By the looks of it only random wood members in the foundation have any evidence of treatment but the rest of it, including window frames, interior foundation walls and attic show no sign of treatment. This possibly points to years worth of neglect from the owner and no annual termite checks. (I'm attaching the copy of the report for your reference below)

    My question to BP members is this. Would you recommend proceeding with this deal or back out? In your experiences are termite infestations of this nature (from the foundation up to the attic) solvable. If yes how much approximately can one account for such a repair. Any words of advice on how to proceed will be greatly appreciated, especially since NC has a due diligence component on top of earnest money which we now stand to lose if we back out.

    Thanks in advance for your guidance!

    Murtuza


     Every house with a yard in the Mid-Atlantic has termite damage. The question always is how much. Words on paper dont reveal anything. Only visuals can help here.

    [email protected]301-893-4635Podcast Guest on Show #192
    District Invest Group546 Reviews
    WebsiteView Page
    1Reply
  • Andrew SyriosPro Member
    Moderator
    Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
    4y

    Proceeding with the deal and backing out aren't the only two options. You can ask for a credit or ask them to fix the damage and maybe treatment. But it really depends on the extent of the damage. The market is so hot that many sellers aren't willing to negotiate at all.

    Podcast Guest on Show #121
    0Reply
  • Murtuza Bengali
    OP
    Member since 2022 · 16 posts · 5 votes
    4y
    Quote from @Russell Brazil:
    Quote from @Murtuza Bengali:

    Hello dear BP members,

    We are rookie investors who have been studying the markets, talking to agents, property managers and fellow investors diligently since the past few months. After going through multiple deals and failing to acquire any properties we finally secured a conditional approval on our bid for a 1950 SFR in Winston-Salem, NC two weeks ago.

    Our due diligence period ends on February 28th. We new when we bid that the house needs about $8K to $9K worth of refurbishment. However, the inspector recommended a termite inspection which has revealed infestation from the under the crawl space all the way up to the attic. By the looks of it only random wood members in the foundation have any evidence of treatment but the rest of it, including window frames, interior foundation walls and attic show no sign of treatment. This possibly points to years worth of neglect from the owner and no annual termite checks. (I'm attaching the copy of the report for your reference below)

    My question to BP members is this. Would you recommend proceeding with this deal or back out? In your experiences are termite infestations of this nature (from the foundation up to the attic) solvable. If yes how much approximately can one account for such a repair. Any words of advice on how to proceed will be greatly appreciated, especially since NC has a due diligence component on top of earnest money which we now stand to lose if we back out.

    Thanks in advance for your guidance!

    Murtuza


     Every house with a yard in the Mid-Atlantic has termite damage. The question always is how much. Words on paper dont reveal anything. Only visuals can help here.

     Hi @Russell Brazil fair enough - here are some images for everyone's reference. Any thoughts?

    0Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    4y
    Quote from @Murtuza Bengali:
    Quote from @Russell Brazil:
    Quote from @Murtuza Bengali:

    Hello dear BP members,

    We are rookie investors who have been studying the markets, talking to agents, property managers and fellow investors diligently since the past few months. After going through multiple deals and failing to acquire any properties we finally secured a conditional approval on our bid for a 1950 SFR in Winston-Salem, NC two weeks ago.

    Our due diligence period ends on February 28th. We new when we bid that the house needs about $8K to $9K worth of refurbishment. However, the inspector recommended a termite inspection which has revealed infestation from the under the crawl space all the way up to the attic. By the looks of it only random wood members in the foundation have any evidence of treatment but the rest of it, including window frames, interior foundation walls and attic show no sign of treatment. This possibly points to years worth of neglect from the owner and no annual termite checks. (I'm attaching the copy of the report for your reference below)

    My question to BP members is this. Would you recommend proceeding with this deal or back out? In your experiences are termite infestations of this nature (from the foundation up to the attic) solvable. If yes how much approximately can one account for such a repair. Any words of advice on how to proceed will be greatly appreciated, especially since NC has a due diligence component on top of earnest money which we now stand to lose if we back out.

    Thanks in advance for your guidance!

    Murtuza


     Every house with a yard in the Mid-Atlantic has termite damage. The question always is how much. Words on paper dont reveal anything. Only visuals can help here.

     Hi @Russell Brazil fair enough - here are some images for everyone's reference. Any thoughts?


     1st and 3rd pictures dont look like termite damage to me. The 2nd picture shows a ton of damage to that sil which is concerning.  4th picture looks like maybe it should be sistered to another joist to shore it up. 5th picture I dont see anything really.

    That one heavily damaged 3rd picture does give me something to think about. Thats more than just a normal amount of damage. 

    [email protected]301-893-4635Podcast Guest on Show #192
    District Invest Group546 Reviews
    WebsiteView Page
    0Reply
  • Michael BlumBusiness Member
    NC · Member since 2018 · 55 posts · 49 votes
    4y

    @Murtuza Bengali

    I would recommend seeing you can negotiate with the seller. If they are not willing to budge, stick with your gut. There will be other deals. Nothing says you have to take this one

    0Reply
  • Oren Kachel
    Member since 2019 · 140 posts · 24 votes
    4y
    Quote from @Murtuza Bengali:

    Hello dear BP members,

    We are rookie investors who have been studying the markets, talking to agents, property managers and fellow investors diligently since the past few months. After going through multiple deals and failing to acquire any properties we finally secured a conditional approval on our bid for a 1950 SFR in Winston-Salem, NC two weeks ago.

    Our due diligence period ends on February 28th. We new when we bid that the house needs about $8K to $9K worth of refurbishment. However, the inspector recommended a termite inspection which has revealed infestation from the under the crawl space all the way up to the attic. By the looks of it only random wood members in the foundation have any evidence of treatment but the rest of it, including window frames, interior foundation walls and attic show no sign of treatment. This possibly points to years worth of neglect from the owner and no annual termite checks. (I'm attaching the copy of the report for your reference below)

    My question to BP members is this. Would you recommend proceeding with this deal or back out? In your experiences are termite infestations of this nature (from the foundation up to the attic) solvable. If yes how much approximately can one account for such a repair. Any words of advice on how to proceed will be greatly appreciated, especially since NC has a due diligence component on top of earnest money which we now stand to lose if we back out.

    Thanks in advance for your guidance!

    Murtuza


     hey Murtuza, do u recommend this inspector? im looking for one in the area

    0Reply
  • Eric Chiang
    New to Real Estate · Riverside, CA · Member since 2021 · 54 posts · 28 votes
    4y

    Hi Murtuza, 

    I haven't dealt with a house with this caliber of termite damage, but my suggestion is to get a quote for the damages and see what the actual cost will be. As someone had previously mentioned, you can ask for seller credits based on the quote, and see if the numbers still work out.

    Alternatively, don't be afraid to walk away, there will be other deals. You could use the amount spent on this property as a lesson learned.

    Happy investing!

    1Reply
  • Michael Gessner
    Pomona, NY · Member since 2016 · 375 posts · 217 votes
    4y

    @Murtuza Bengali I would walk away from this property asap. The damage is severe, you can get estimates from contractors however, the issue with termite and carpenter ant damages is you don't know the severity until you actually start opening the walls. The fact that the damage is present on the surface means the damage and infestation is much worse then you think or will expect. I flipped a property a few years ago, never in a million years did expect carpenter ant damage in the back wall, absolutley no signs of it, well I ended up have to tear just about the whole wall in the kitchen out, the damage went from the sill plate all the way Into the header, theirs was barely any wood left to the studs. Thankfully it didn't cost me much to make the repair plus we had plans for a slider, but unless you have the experience these types of damages can get very costly. Only way I would consider the deal is a substantial reduction in the purchase price.

    1Reply
  • Murtuza Bengali
    OP
    Member since 2022 · 16 posts · 5 votes
    4y
    Quote from @Oren Kachel:
    Quote from @Murtuza Bengali:

    Hello dear BP members,

    We are rookie investors who have been studying the markets, talking to agents, property managers and fellow investors diligently since the past few months. After going through multiple deals and failing to acquire any properties we finally secured a conditional approval on our bid for a 1950 SFR in Winston-Salem, NC two weeks ago.

    Our due diligence period ends on February 28th. We new when we bid that the house needs about $8K to $9K worth of refurbishment. However, the inspector recommended a termite inspection which has revealed infestation from the under the crawl space all the way up to the attic. By the looks of it only random wood members in the foundation have any evidence of treatment but the rest of it, including window frames, interior foundation walls and attic show no sign of treatment. This possibly points to years worth of neglect from the owner and no annual termite checks. (I'm attaching the copy of the report for your reference below)

    My question to BP members is this. Would you recommend proceeding with this deal or back out? In your experiences are termite infestations of this nature (from the foundation up to the attic) solvable. If yes how much approximately can one account for such a repair. Any words of advice on how to proceed will be greatly appreciated, especially since NC has a due diligence component on top of earnest money which we now stand to lose if we back out.

    Thanks in advance for your guidance!

    Murtuza


     hey Murtuza, do u recommend this inspector? im looking for one in the area

    Hey Oren - tbh I haven/t worked with them before. I was recommended to use them through my agent who is an investor in multiple properties in that area himself and this company has done all his inspections. 


    He recommended them highly and the charge was $75

    0Reply
  • Murtuza Bengali
    OP
    Member since 2022 · 16 posts · 5 votes
    4y
    Quote from @Eric Chiang:

    Hi Murtuza, 

    I haven't dealt with a house with this caliber of termite damage, but my suggestion is to get a quote for the damages and see what the actual cost will be. As someone had previously mentioned, you can ask for seller credits based on the quote, and see if the numbers still work out.

    Alternatively, don't be afraid to walk away, there will be other deals. You could use the amount spent on this property as a lesson learned.

    Happy investing!

     Thanks for the kind advice @Eric Chiang. We did decide to pull out. Because the damage is so extensive, the estimate on this repair could've ranged from $10K to $40K depending on how much of the wood would need to be replaced. Since we are first time investors we thought pulling out would be the best decision at this point and look for other deals.

    We did send a strongly worded letter to the seller and our agent worked quite hard to get 50% of the due diligence money back. So all in all lesson learnt - part and parcel of getting into REI!

    0Reply
  • Murtuza Bengali
    OP
    Member since 2022 · 16 posts · 5 votes
    4y
    Quote from @Michael Gessner:

    @Murtuza Bengali I would walk away from this property asap. The damage is severe, you can get estimates from contractors however, the issue with termite and carpenter ant damages is you don't know the severity until you actually start opening the walls. The fact that the damage is present on the surface means the damage and infestation is much worse then you think or will expect. I flipped a property a few years ago, never in a million years did expect carpenter ant damage in the back wall, absolutley no signs of it, well I ended up have to tear just about the whole wall in the kitchen out, the damage went from the sill plate all the way Into the header, theirs was barely any wood left to the studs. Thankfully it didn't cost me much to make the repair plus we had plans for a slider, but unless you have the experience these types of damages can get very costly. Only way I would consider the deal is a substantial reduction in the purchase price.

     Exactly right @Michael Gessner - that was what we were being told as well that estimates are hard to provide for an infestation at this scale. Being out of state - this was not a risk worth taking. We would've ended up being under construction for 2 to 3 months and with the current supply chain issues and inflation would've probably regretted getting into this in the first place.

    Thank you for the advice!

    0Reply
  • Terry N.
    Architect · Raleigh, NC and Mid Michigan · Member since 2014 · 106 posts · 16 votes
    4y
    Quote from @Murtuza Bengali:
    Quote from @Eric Chiang:

    Hi Murtuza, 

    I haven't dealt with a house with this caliber of termite damage, but my suggestion is to get a quote for the damages and see what the actual cost will be. As someone had previously mentioned, you can ask for seller credits based on the quote, and see if the numbers still work out.

    Alternatively, don't be afraid to walk away, there will be other deals. You could use the amount spent on this property as a lesson learned.

    Happy investing!

     Thanks for the kind advice @Eric Chiang. We did decide to pull out. Because the damage is so extensive, the estimate on this repair could've ranged from $10K to $40K depending on how much of the wood would need to be replaced. Since we are first time investors we thought pulling out would be the best decision at this point and look for other deals.

    We did send a strongly worded letter to the seller and our agent worked quite hard to get 50% of the due diligence money back. So all in all lesson learnt - part and parcel of getting into REI!


     May I ask what you’re due diligence fee was? 

    0Reply
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