Termite inspection scam?

by John Wake on May 25, 2008

An inspection report came back Saturday with “Visible evidence of wood-destroying insects were observed.”

The visible evidence was, “subterranean termite shelter tube stains.”

Stains! They didn’t even see any of those dried mud shelter tubes? Just stains?

As is very often the case when evidence of termites is found, the inspection also said that, “Visible evidence of previous treatment was observed.”

That means the inspector could see where holes were drilled into the foundation to pump insecticide under the slab during the previous treatment.

There is no way of knowing how old the shelter tube “stains” are. I’m guessing they are pretty dang old if there were no visible shelter tubes, just “stains.” I’m guessing there is a dang good possibility that those “stains” were there BEFORE the previous treatment and there are no active termites currently.

I don’t really mind. I represent the buyers and we’ve requested that the seller treat for termites. I’m not a termite expert. We have to go with the opinion of the experts.

Termites are common in Arizona. They say if you don’t have termites, you will. Fortunately, they are not very aggressive.

Unnecessary use of insecticides

Nevertheless, I think there are way too many homes being treated for termites that don’t have a termite problem. They HAD a termite problem. It was treated. The problem was solved.

But now every time those homes are inspected the old “visible evidence” from years ago triggers the termite inspector to check “Yes” to “Visible evidence of wood-destroying insects were observed.”

Termite Scam?

I first got hip to this scam a few years ago when a termite inspector showed me the termite mud shelter tube on an exterior block wall. That home too had been previously treated only 2 years earlier.

I asked that termite inspector how he knew that tube was not already there before the termite treatment 2 years earlier. He didn’t know. He couldn’t know. He thought the tube looked like it could be old but he didn’t know. Since he saw it, he had to mark it down as “Visible evidence.”

Fine. Be on the safe side.

So I asked the termite guy if he would remove that single shelter tube after the home was treated. That way the old tube wouldn’t cause a termite inspector in the future to mistakenly believe the tube was caused by currently active termites.

He said, “No.” He would not remove the termite shelter tube after treatment.

{ 20 comments… read them below or add one }

1

Philip 05.25.08 at 10:52 pm

John,

Wow! I feel stupid. This has happened to me several if not many times. I never thought of the “scam” aspect, but you are right. Now, what to do….

On Tuesday, let’s both call the Termite Bug People at the State Termite Control Center… someone else reading this blog will call it what it really is, I forget.

Let’s talk on Tuesday.

Philip

2

John Wake - Real Estate 05.26.08 at 12:37 am

Structural Pest Control Commission
http://www.sb.state.az.us/

3

Joe 05.26.08 at 6:52 pm

Just wondering if the inspection company also performs treatments. Many of my listings have always been tagged as having “evidence” of past tubes and the treatment.

4

John Wake - Real Estate 05.26.08 at 10:17 pm

I don’t know.

The Buyer selects the inspection company.

The Seller usually selects the treatment company.

I don’t know how often a Seller will choose the company that did the inspection.

I suppose they have the inside track but I don’t know.

5

Bill 05.27.08 at 12:06 pm

I am in the process of selling my Ahwatukee home. I had it treated last summer, which included drilling the foundation. The buyer recently had their termite inspection and the inspector noted stains from old mud tubes. The inpector, who of course works for a pest control company, offered to treat the “problem” for $420 with a quote attached to the inspection report. Since I am still under waranty I was able to have the company that treated it last summer reinspect, apply a small amount of pesticide at the areas with mud tube stains, and forward a report to the lender. It certainly seems like a conflict of interest to have pest control companies performing the inspections and attaching quotes to the inspections. It’s comparable to having a handyman perform the home inspection with a quote attached to fix the “problems” encountered during the inspection.

6

John Wake - Real Estate 05.27.08 at 12:18 pm

Bill,

Good point!

Home inspectors don’t make any referrals or recommendations of companies to make repairs.

7

Philip 05.27.08 at 2:00 pm

Bill talks with a lot of common sense. Although I turn down warranties at the electronics stores routinely, there are certain things the homeowner can warrant especially after a repair or a treatment. Here, it’s worth IMHO the few extra dollars.

One would be roof repairs backed up by a new 1 year warranty. The other would be to have major appliance warranted and repaired through a reputable Home Warranty Company.

By the way, for those about to list their homes out there, John Wake or any reputable Realtor can get you a FREE Home Warranty during the listing period of your home. This means that most repairs if you choose to use the Home Warranty Company can be repaired for approximately $45.00.

LAST: Ask your listing Realtor or call John Wake for the details.

I am an independent Broker/Owner and have no affiliation with John Wake. What I do have is utmost respect for him and his several blogs that are helpful to consumer and Realtor alike.

Good work, John!

8

AZBUGGUY 05.28.08 at 1:24 pm

That is why you shoulduse a reputable company. Many of those who are complaining probably went with the cheapest bid when doing work. You get what you pay for. Also, if you are under a warranty, then you should have the company holding the warranty do the inspection. Or if there has been treatment in the past, have the company who did the treaments inspect the home. Would you have your breaks done by Ford, and inspected by Chevy? Like ALL businesses there are reputable ones as well as those who are not. It is the consumers job to do research on who they are going to use and choose the best company for the job based on their standards, if the cheapest is the standard they choose, it is the standard of the work and service they can expect.

9

AZBUGGUY 05.28.08 at 1:34 pm

Just to be proactive to some responses I’m sure to get, because your home is inspected by a company you have no affiliation with (the buyers choice), you can have a company of your choice do the treatment. The reason why even stains are called out is because if a company inspects the home, and doesn’t mention them, then a buyer can make them teat that area at no charge after they purchase the home because they will insist that they are new, etc. A reputable company should remove tubes after treatment, and that way they will be able to tell they are old. Also if they say there is eveidence of a treatment performed in these areas, then they should not be calling for a retreatment, just saying that they can not insure they were treated properly since they did not do the treatment, and the seller should provide their records showing when they were treated and by whom. That is between them and their company. Again, if their compnay is reputable, then they can supply the paperwork needed to get them through escrow. Moral to the story - Use a reputable company that has backing, and has history, and has been around for a while. If they work out of their home, or have less than 10 employees, you are taking a risk. I liked the pont above about warranties that are worth it. Remeber a warranty is only as good as the company is still around. NuTreat Termite just went out of business, and tehy were top 10 in the state. What does that say about the smaller outfits? May not be the best people to buy a waranty from huh? Again, just food for thought. Be a SMART consumer, and you wont leave yourself open for “scams”.

10

John Wake - Real Estate 05.28.08 at 1:36 pm

AZBUGGUY,

Thanks for your comment.

Is there an approved practice (if there is such a thing) about what to do with “visible signs” after treatment? Is the approved practice to remove them, leave them or it’s not covered in approved practices.

11

AZBUGGUY 05.28.08 at 1:38 pm

Also, check with the state to see how many complaints they companies have. Look at a TARF report. It shows how many jobs that the company did the past year. All are available on the web site that was given by John Wake. They are very good, and their website is excellent. You have all the tool there that you need to choose a company. Sorry for my many typos, I am a fast typer, just not very accurate:)

12

David 06.22.08 at 9:44 pm

Here is an idea. Have the owner of the home scrape the old stains off of the stem wall since it is their house to begin with. I cannot believe what I am reading from a bunch of money hungry bottom feeding real estate agents. Another good idea might be checking the state law that these companies must abide by when performing WDIIR inspections. If they dont list the evidence they are held liable (just doing their jobs you morons). Lastly, if I felt comfortable enough to pick a handy man that is qualified to inspect my house then I would probably feel pretty confident that he could fix the damages he reports, so I would not have a problem with him submitting a quote. You people are letting your paychecks get in the way of better judgement. Give me a break.

13

Jen 09.02.09 at 12:28 pm

Help! Okay, so I had a tree in my yard removed 3 years ago because it was dying (due to poor pruning) & found that it had termites. I admit I freaked out a bit & then subsequently had a reputable pest control company treat my home (drilling holes in concrete around the home, treatment around plumbing, etc). No sign of termites in the home were found. Each year following this, they’ve inspected with no sign of infestation. Am I wasting $250 per year having them inspect if there never was a sign of infestation in the home? Thanks.

14

John Wake 09.02.09 at 12:53 pm

You’re paying $250 per year for an inspection?! I probably misunderstand.

When my clients order a termite inspection when they’re buying a home, they pay around $60-$70. I haven’t had my personal home inspected since I bought it.

15

Jen 09.02.09 at 8:46 pm

First of all, thank you for your reply John. And, nope, you read correctly; I paid for the initial treatment of the home (some ungodly amount in the neighborhood of $1K) after finding termites in a dead tree on my property 3 years ago. And, each year I pay $250 just for an inspection & their warranty that if the termites do “come back” (which they never were in the house to begin with) they will treat for no additional cost. Of course, I’m already out the $250 per year for the last 3 years! I guess my question is this: are the termites found in the dead tree 3 years ago the same kind that would invade a house? Am I taking a risk if I don’t have the house inspected each year? This is an expense I’d like to eliminate from my bills if at all possible. I’ve tried to locate reports online for areas of the Valley where infestations have been high, but to no avail. I live in Gilbert. Thanks again for your prompt reply!

16

John Wake 09.02.09 at 9:33 pm

Jen, I’m certainly not an expert but it’s common that one house will have termites but the house next door doesn’t. So I can imagine that a tree could have termites and a nearby home didn’t.

If you don’t inspect it every year, you might get termites and not discover them or treat them as soon. But that’s not the end of the world.

Termites are very common in Arizona. They say if you don’t have them, you will. Fortunately, they aren’t the super aggressive type like in Florida.

I’ve run across a lot of homes that had termites but none in my personal experience where the home inspector said the termites had caused any structural damage. That’s why I don’t worry about termites in my personal home. If we find them, we’ll treat for them, otherwise, we won’t worry about them. It’s my impression that you would have to have termites for many, many years before they caused structural damage.

Most people I know in Arizona only inspect for termites when they buy a home or when they suspect they might have termites.

17

Jen 09.03.09 at 9:00 pm

Again John, I appreciate your feeback!

18

AZBUGGUY 09.11.09 at 2:36 pm

Jen, as far as the tree goes, if termites were eating something that close to your home, they could very well be eating way at your home too. They go unseen so often, that a treatment without seeing anything isnt that bad an idea. John was actually incorrect in that they dont cause that much damage. They are VERY destructive. The termites we commonly see here are smaller than many of the other species out there, but they have HUGE colonies, so what they lack in size they make up in numbers. Home repairs are expensive, and our homes are generally our largest investment. It just makes sense to take care of them. This is not to say that everyone should treat their home every year. But if you ever see signs of termites, you should be on top of it, as well as thorough. As far as the $1000 you paid for your treatment, that isn’t that bad a price depending on the size of your home. We treat many homes, and they can be as low as $550 (a small two story) to $1600 on up for large one story homes. It is based on the lineal footage around your home, which is the area that is treated. The $250 a year is the puzzling part. For what you paid you should have more than likely (unless you home is a very large one story home) had a 5 year warranty given, which would cover any treatments that may be necessary during the warranty period. You also should have been given a free inspection at any point that you felt you may have had termites. After a 5 year warranty is up, you can often extend that treament warranty year to year, and that should be around $150 yearly for the average size home. This would include a yearly inspection, but that is not what you are paying for, it is the warranty that would cover treating any problems that occur during the warranty period. As I have said before, you always want to make sure you are using a reputable company. You can call the Office of Pest Management and see if there are any complaints against those you are getting quotes from. You want to look at longevity, as well as price. The cheapest is usually just that, “cheap”. You need to be looking for value. Many companies are going out of business these days, so make sure that they will be around the entire warranty period. Check the OPM website and see how many employees they have. If they have 2 or 3, then can they get to you in a timely matter if you have an issue? What if the little “cheap” one man operator gets sick, you don’t get work done! Be a smart consumer. Don’t set yourself up to be victimized. There are many good companies out there, make sure to choose one of them!
Jon in answer to your question before, which I somehow missed, the state requires any evidence of termites to be called out on the WDIIR reports. There is, however a spot that is to show that they were treated, so if it was treated, and is still under warranty with a company, that can be noted, and the company has no way to make you feel as though you need to buy a treatment from them. As far as just knocking a tube down, that doesn’t get rid of the termites. They just move to another area. You do need to have some sort of evidence of treatment, and it would still need to be under warranty so that if an issue does coem back, the new owner would have some sort of recourse to get t treated at no cost. If there isn’t, and the company doesn’t mark that there was evidence, then they are on the hook for the treatment at no cost to the new owner. This is just the law, and companies have to follow it. The Office of Pest Management has a great staff that is very informative, and is always a good resource for homeowners as well as realtors that may have issues or questions with a report or a company.

19

Bill 01.21.10 at 11:07 pm

I stumbled across this thread while researching another matter. After I left..the mis-information continued to haunt me…so I have returned to offer my 2 cents.
Just a little background I own a termite company in the Metro Valley…we are one of the larger family owned inspection companies in the Valley…I have been in the industry for over 30 years. In that time I have performed 10’s of thousands of termite inspections. I have been used as an expert witness across the state in civil litigation involving termites and termite reports etc…etc
IMHO I would not have recommended a termite treatment to the entire home if termites were merely found in or around a tree in the yard. That is very common in the valley.
My recommendation would have been to continue regular inspections until a problem was noted. We have 25 different types of termites reported in Arizona. Many species can be found in most yards (i.e. Desert termites) and will not normally invade/infest a home.
Additionally…it was incorrectly stated our colonies (Arizona) are large…they in fact are not.
The average colony (native species) can number 200,000 to 400,000 termites…that may sound large until you compare colonies in the eastern half of the country that run 2-4 million. More mouths equate to more damage.
Where we make up the difference is that out east…typically only one colony will infest a home…colonies will fight to protect their food source.
In Arizona…our “laid back” colonies are “social” and will co-exist with other colonies nearby. It is not uncommon to find several (different) colonies attacking the same home.
This is important to know as you will understand why “spot treatments” are not recommended…and treating the entire structure is essential.
Severe damage usually takes years in most cases I have seen around the Valley.
I monitor a wood frame test structure…that has had our native species (active) for over 10 years…there is mostly “cosmetic damage” and very little structural damage. The test site is 10 by 12 with a pitched roof. Last check we recorded 16 tubes and 6 tube stains.
It was correctly pointed out that “tube stains” are required to be reported pursuant to State Law and our rules/regulations.
A good termite technician will “knock down” existing shelter tubes (leaving the stains) during his/her treatment. These areas serve as “markers” for future inspections.
Through the years I have found most (the majority) Pest Control Companies in Phoenix are honest…trying to do right. Often their inexperience and/or bad decisions are mistaken for attempts at fraud.
Litigation experience leads to advise realtors…let your client pick the termite company…you might suggest 2 or 3 to choose from…suggesting they check out your recommendations.
Realtors are charged to protect the interest of the client…as such…if you suggest a termite inspector (or home inspector) and a problem arises…you will share in the liability.
After you and your broker pay the “deductible” the matter falls in the hands of the insurance company and man times they (insurance company) will pay off the claimant (to go away). You end up with a tarnished reputation…out your deductible with a premium raise down the road.
To Realtors and home buyers…while I recommend a termite and home inspection…do not use the same person for both. Very few home inspectors have the knowledge and experience of a good termite inspector and vice versa. Two sets of eyes focused on one matter are better than one set focused on two matters. Besides…very few home inspectors (in Arizona) have been doing termite inspections for more than three years. Currently I am involved in three separate litigations involving Home Inspectors failing to properly complete a termite inspection and/or report. FWIW

20

John Wake 01.22.10 at 12:41 am

Bill, You sound very knowledgeable. If you don’t mind, what company are you with? (Or just email me the information if you don’t want to put it here.)

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