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Termite Bonds and Termite Letters

Termites are tiny yet powerful and destructive creatures. They cause billions of dollars in damages to homes each year. Termite bonds and termite letters are two tools homeowners and homebuyers have to guard against termite infestation and damage.

Termites are microscopic wood-destroying insects. They are members of an intricate caste system in colonies. Termites thrive in warm climates and are prevalent in southern states such as Georgia.

Despite their size, termites can cause significant damage to homes. Their small bites of wood can cause an entire building to collapse over time. A termite bond or termite letter can help homeowners avoid costly catastrophic damage.

Protection Against Termites

A termite bond or letter is more than another element of a real estate transaction. Think of it, like homeowners insurance, as peace of mind as you buy or sell a home. Homeowners insurance protects you financially if there is damage to your home. Termite bonds and letters protect you if these wood-destroying organisms appear in your home.

What Is a Termite Letter?

Many use the terms termite bond and termite letter interchangeably, but they differ. A termite letter or wood infestation inspection reports on the status of termites in, under, and around the house.

First, a licensed home inspector visually inspects the house. They will look for any signs of termites or termite infestation. The termite letter will state if the home has termites or a termite infestation. It also provides recommendations for treatment or termite control.

If there are no signs of termites, the inspector will prepare a letter sharing their findings. If there are signs of termites after treatment, the inspector's letter will note the date and type of treatment involved.

Some home lenders, including the Federal Housing Authority (FHA), require a termite letter. Even if not required, termite letters can help sell a home. It helps demonstrate that your home has no termite problem.

Termite letters are one way to mitigate termite issues. Termite bonds are another way.

What Is a Termite Bond?

A termite bond is a homeowner and pest control service provider contract. Think of it as a warranty against termite problems.

The terms of the contract will vary depending on factors such as location. Most termite contracts include an annual inspection to check for signs of termites or infestation. The company can recommend an appropriate treatment plan if there are signs of either.

Some termite bonds include treatment. Homeowners can also buy a repair bond to cover any damages from an infestation.

Termite companies look for the following when creating a bond:

  • A need for termite retreatment
  • Evidence of past termite control or damage
  • New chemical termite treatments to complete
  • Specific types of termites damaging the home (the bond may not cover all kinds)
  • Evidence of subterranean termites
  • Methods for termite prevention

These companies also consider whether the homeowner needs a termite warranty from a pest control company on the house. The cost of the bond will vary depending on individual circumstances. The bond price may not cover inspections for bed bugs, ants, and other nuisances that can cause damage. A bond also does not cover damage that leads to termite infestations, such as water damage.

Some termite bonds are transferable to a new homeowner. In other words, the bond goes with the house. It is a transferable bond.

Termite Problems

A homeowners insurance policy may not cover termite inspections and subsequent treatment. Regular termite checks can prevent big problems, so finding damage can indicate long-term neglect by the previous homeowner.

A repair bond should cover any damage repairs. Homeowners can also consider legal action if the seller does not disclose the termite problem.

Get Help With Buying a Home

A real estate attorney can help a new home buyer throughout the home-buying process. Speak to a local experienced real estate attorney if you are buying a home.

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