Home Buying in Palmdale>Question Details

inna ivchenko, Real Estate Pro in Calabasas, CA

Termite typo in estimate costs of treatment , who is responsible?!

Asked by inna ivchenko, Calabasas, CA Sun Feb 24, 2013

LA ordered a termite inspection, we got estimate of damages and necessary treatment; Buyer decided to take credit and closed the escrow fast. One week later, the termite company called me( a selling agent) informing me that it was a typo and the real estimate .....ready?....10 times higher, like it was 280, but should be $2080.
Escrow is closed. Who is going to pay for those termite clearance?

Help the community by answering this question:

Answers

5
inna ivchenko’s answer
Update: I called both companies trying to figure out what happened. Days passed. We closed the escrow with a credit according to the smaller estimate. One week later a company called me ......apologizing for a typo on the receipt. Typo? Escrow is closed! we suggested that company to honor their first result that we used......Long story short, the seller issued additional check( yes, after close of the escrow ) for the difference b/w the actual amount and the one with 'typo'. Since due a contract 'the seller is responsible for the existing damages', the seller issued the refund.
No lawsuits, no drama this time.....
0 votes Thank Flag Link Fri Mar 22, 2013
Good question.... please let us know the outcome. ... I would say, the buyer had a chance to investigate and to satisfy themselves. Me, seeing the report, and I have seen many....knowing how much damage there must be for 2,000 dollars worth of damage, I would of questioned the amount being charged. Since a termite company charges $80.00 for just an inspection. I think the lowest I have ever seen a termite company charge was $300.00 and I was surprised.

Let us know the outcome, and yes, me the way I am, I would offer some money just to settle everything.

James
0 votes Thank Flag Link Sun Feb 24, 2013
I think that an "estimate" is just that, an estimate and not a contract. People are allowed to make mistakes and unfortunately this is not a small one. Your question is "Who is going to pay for those termite clearance?" and my question is why do you need a clearance now that the escrow has closed? The lender is the one that requires the clear termite and they have funded the loan. My suggestion is to investigate the damage and the work to be done and shop around. Since there is no urgency at this point and you know what the report calls out, you have plenty of time to get the best deal. If it requires wood repairs, you could do the work yourself then have you know you are good and when you go to sell you will need to do another inspection. If the work involves treating the soil or the wood for insects you will need a licensed company to do that and again, you don't need that done right away. Termites are extremely slow moving and takes years to do damage so treatment can wait. There are a lot of companies that do inspections for free, in hope of getting the repair work,
0 votes Thank Flag Link Sun Feb 24, 2013
Your question is a classic problem of ethical and legal solutions and I must agree with Maria Racelis's answer that what's going to be most important is working to achieve an amicable solution.

Legally once a property is closed, the buyer has accepted it and the Seller no longer has any legal responsibility. I can easily imagine the Seller simply saying, "You asked for a credit and we gave it to you, sorry the termite company made a typo, you need to speak with them" Ethically this isn't the right thing to do.

There's a number of things that I feel need to be considered. One you as the buyer's agent should have assumed responsibility for the termite inspection, this was to the benefit of your client and the seller should not have been involved at all. You probably should also have questioned an estimate of $280 which strikes me as ridiculously low unless they were only going to spot treat a small area.

Now the fact is the Termite company did supply a written proposal and you may want to review the language on it carefully. Many times the language of the "proposals" is actually that of a contract and it's possible you might get the Termite company to meet you somewhere in the middle as they should accept some responsibility for their typo.

It would be nice if the Sellers would contribute a little more and I'd certainly pressure the listing agent to pursue this and mention that there's always the possibility of the buyer filing a formal complaint against you and them with the real estate commission which would be a problem for both of you. You as their agent should also be prepared to make a contribution. I'd also suggest getting a couple of more estimates as based on what's transpired so far I wouldn't extend much trust to the termite company that prepared the quote.

I would suggest speaking with your BIC to see what their thoughts are. Were it me I would be prepared to do whatever was necessary to satisfy my buyer and would in the future would remember that it's my responsibility to order inspections and gather quotes for my clients and would not permit anyone else to do my job.

I hope things work out and that it doesn't end up costing you too much.
0 votes Thank Flag Link Sun Feb 24, 2013
The report revelead wood-boring or termite infestation.
The buyer asked the seller to remediate the problem.

The seller got an estimate and the wrong estimate was presented to the buyer. The buyer accepted the resolution to the problem in the form of a credit in lieu of getting it treated.

If the both parties had known the actual amount involved, would they still come into an agreement?

The problem here is not who should be responsible but how to settle this AMICABLY outside of closing.
0 votes Thank Flag Link Sun Feb 24, 2013
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer