4. May 2011 02:40
Termites can cause major problems!
As a SC Real Estate Broker, home owners and home buyers frequently ask me, what is a CL-100 letter? It is a termite inspection of the home. In South Carolina, we refer to this termite inspection as a CL-100 letter. Other states may have different names or likely just call it a termite inspection. CL refers to a "clear letter", which means there are no current termite infestation. The contract of sale used around the midlands of South Carolina, allows the buyer to have this inspection if they choose to have one at the home buyers expense. Although the inspection is optional to the buyer, it is important to find out from the loan underwriter if they require the inspection. Many lenders (underwriters) will require the home buyer receive a clear CL-100 Letter before they will provide financing for the purchase.
Several points need to be made about the CL-100 Letter. In South Carolina, we live in a hot and humid area of the country. Hot and moist conditions are ideal for termites. The question in South Carolina should not be, are there termites in the property, rather, when will the property have termites? As long as we have wood in the home, termites will eventually make their way to the home. Termites can be treated and serious damage can be avoided if the home is under a termite bond. This bond typically consist of a one time payment with periodic treatments throughout the year. If termites should appear and cause damage to the property. The company you purchased the termite bond from is liable for all damages and repairs. Be very careful about who you choose to purchase a termite bond from. Not all companies provide the same warranties with their termite bond. One person you can talk to and be certain of what you are getting is Bobby Baine with Pest Management Systems. I have used and depended on Bobby Baine many times over the years with excellent results and total client satisfaction. Bobby will tell you the whole story without misleading the consumer.
Another point to make is that there is no such thing as a "Clear" CL-100 letter. Without tearing out the walls in the home, there is no way to make a definite statement that there are no termites. When the termite company issues the CL-100 letter, they are stating that there are no current signs of present infestation based on the extent of their inspection. As we stated above, the home buyer has the option to pay for a termite inspection or not. Having a termite inspection (CL-100 Letter) is absolutely necessary and should be required in my opinion. Many buyers that choose not to have a termite inspection find out when they get to closing that the lender (underwriter) requires the letter before they will fund the transaction. This causes the closing to be postponed until a contractor can complete the inspection and provide a CL-100 letter. If the inspector finds termite infestation and/or significant damage, the home buyer will likely have other problems because the lender will not fund the loan unless the damages are corrected. By this time in the transaction, the buyer will have lost their financing contingency leaving the buyer in default if they cannot get the financing due to termites.
This Saturday on Success in Real Estate, we will have Bobby Baine with Pest Management Systems to explain the issues with the CL-100 letter and how to protect yourself as the home seller or home buyer against liability. Also, we will have a special guest in studio, Courtney Turner, Miss South Carolina. Courtney is a graduate of the Real Estate School for Success and a licensed Real Estate Agent with EXIT Realty. You can listen to Success in Real Estate every Saturday morning from 8:30am till 9:30am on WIS Radio, 1320AM or listen live via the internet by clicking the link "Listen Live" to the right of this blog page. If you have any questions or comments about this weeks topic, please give us a call on Saturday morning at 803-739-8730.