DUE DILIGENCE - INSECT INSPECTIONS

This is an attempt to clarify the Company's position on what is commonly referred to as "the termite report". Clients First Realty, LLC does not place the wood infestation report as a mandatory item for our Agents, but we HIGHLY recommend that it is done on each and every transaction. According to AAR's Resale Purchase Contract 5/05, page 5, paragraph 6c, lines 198-202 the following will be found.

"Wood-Destroying Organism or Insect Inspection: IF CURRENT OR PAST WOOD-DESTROYING ORGANISMS OR INSECTS (SUCH AS TERMITES) ARE A MATERIAL MATTER TO THE BUYER, THESE ISSUES MUST BE INVESTIGATED DURING THE INSPECTION PERIOD. The Buyer shall order and pay for all wood-destroying organism or insect inspections performed during the Inspection Period. If the lender requires an updated Wood-Destroying Organism or Insect Inspection Report prior to COE, it will be performed at Buyer's expense."

I have found a simple clause placed on each contract where I represented the Buyer clarifies what your Buyer expects to happen if termites are found in the prospective property being purchased. Making this clear up front, should help insure a smoother transaction through the Due Diligence phase of the transaction. The clause reads as follows and is normally placed on page 8 (Additional Terms Section) AAR RPC 5/05 Form:

Seller agrees that, based on termite report, seller will correct all issues and procure a clear termite report acceptable to lender and treat the entire home for termites or treat as per warranty, if any.

I hope this answers the questions that several Agents had concerning this item.

Have A Great Day, WMS/DB