Who Pays for the Termite Inspection on a VA Loan?

Getting a VA loan to buy a home is an excellent option for many veterans and active-duty military members. VA loans offer great benefits like no down payment, no private mortgage insurance, and competitive interest rates. However, VA loans do come with certain requirements, like the termite inspection.

Termites cause over $5 billion in home damage each year. Because of this, the VA requires properties in termite-prone states to undergo an inspection before loan approval. This ensures veterans aren’t buying a home plagued with these destructive pests.

When it comes to termite inspections for VA loans, one common question is: who pays for it? In this article, we’ll breakdown who is responsible for covering the costs of a VA loan termite inspection.

An Overview of VA Loan Termite Inspection Requirements

Before jumping into who pays, let’s do a quick rundown of the termite inspection requirement for VA loans

The VA has specific guidelines, referred to as Minimum Property Requirements (MPRs), that a home must meet before being eligible for a VA-backed loan One of these requirements aims to ensure the property is free of wood-destroying organisms, a.ka termites.

Whether an inspection is required depends on if the home is in a state with a moderate to high probability of termites. The VA uses this termite distribution map to dictate inspection requirements in each state.

• In states with heavy termite populations like Florida, Georgia, South Carolina, etc., an inspection will be required.

• In places with low or no termite populations like Alaska, an inspection is discretionary.

• Some states it depends on the specific county.

VA appraisers decide if an inspection is necessary during their property assessment. If so, a professional pest control inspector must thoroughly check the home and provide a detailed report on their findings.

Any termite damage or infestation must be remedied before the VA will back the loan.

The Buyer, Seller, or Lender Can Cover the Cost

When it comes to who pays for the termite inspection on a VA loan, the options include the buyer, seller, or mortgage lender.

Previously, VA guidelines prevented the buyer from paying for their own inspection. This often led sellers to refuse offers with VA loans to avoid the pest inspection costs.

However, in June 2022, an update to VA regulations now allows buyers to pay for the inspection in certain states. This change aims to make VA loan offers more appealing to sellers.

Here’s a breakdown of who can pay for the VA loan termite inspection:

• The Buyer – The buyer can now pay for the inspection in 9 states including Alabama, Arkansas, Arizona, California, Florida, Louisiana, Mississippi, Oklahoma, and Texas. In other states, it’s still prohibited unless the seller agrees to let the buyer pay.

• The Seller – The purchase agreement may stipulate that the seller covers the inspection costs. This is common practice in many real estate transactions.

• The Lender – The lender or mortgage company may cover the inspection fee or offer discounts. This can be negotiated when applying and choosing a lender.

• Split Payment – The buyer and seller can also split the fee if they prefer.

No matter who pays, the inspection must be conducted by a licensed pest control professional and follow VA guidelines.

How Much Does a VA Loan Termite Inspection Cost?

We’ve covered the who, now let’s look at the how much.

According to HomeAdvisor, pest inspections range from $50 to $280 per inspection.

Several factors determine the exact rate:

• Home Size – Larger properties take more time and access to fully inspect. The fee is usually based on square footage.

• Inspection Scope – A basic visual inspection is cheapest. Fungal samples, moisture readings, and wood probes cost more.

• Location – Urban and suburban areas are more affordable than rural areas which have fewer inspectors.

• Time of Year – Rates often increase during busy spring and summer home shopping seasons.

• Extra Services – Any repairs, treatments, or multi-point inspections add to the final price.

• Company – Each pest control provider sets their own rates based on overhead costs and profit margins.

Whether the buyer, seller, or lender pays, it’s wise to shop around for the best deal on an inspection.

Should I Pay for the Termite Inspection on My VA Loan?

If you have the option in your state, should you pay for the VA loan termite inspection? Here are some pros and cons to consider:

Pros of the Buyer Paying

• May motivate sellers to accept your VA loan offer if they don’t have to cover the costs
• Allows you to shop around for the best inspector you’re comfortable with
• Added control over scheduling the inspection for a time that works for you
• Paying shows you’re a serious buyer willing to cover necessary closing fees

Cons of the Buyer Paying

• An added closing cost you have to pay out of pocket
• Risk the inspection finds damage you ask the seller to repair or have to repair yourself
• In states where it’s prohibited, you’d need the seller’s agreement

Overall, paying for the inspection yourself gives you more flexibility and convenience. But in a sellers market, offering to cover the inspection cost upfront could give your VA loan offer an advantage.

Key Takeaways on VA Loan Termite Inspections

Termite inspections help protect VA loan borrowers from purchasing a home plagued with these harmful pests. When needed, the inspection must be completed by a professional pest inspector and any issues found repaired.

While previously off limits, VA guidelines now allow buyers to pay the inspection fees in certain states. The change aims to make VA loan offers more attractive to sellers.

Inspection costs range from $50 to $280 depending on the home, scope, and provider. The buyer, seller, or lender can cover the fee depending on the purchase contract and state regulations.

As a buyer, paying for the inspection yourself can add convenience and strengthen your offer. But also consider your budget, closing costs, and whether the seller will permit it before deciding.