If you are in the process of getting your real estate license, you’ve probably discovered that there’s a vast amount of information Realtors® need to know, especially to best serve your clients. Insect and fungi damage might not be on the real estate license exam, but it is a topic you should be knowledgeable about early on in your real estate career.

Charlie Rouse, a Certified Home Inspector with Associated Master Inspectors, recently gave ProSchools some excellent tips to pass on to our real estate students.

WOOD DESTROYING INSECT AND FUNGI INSPECTIONS

Wood Destroying Organism (WDO) inspections are not statutorily required to be included in a home inspection in Oregon. Oregon statutes do require the inspection contract to state whether a WDO inspection is included or available. A few things that every Real Estate professional should be aware of:

1. Certified Home Inspectors are required to have a signed contract before they complete a home inspection.
2. Home Inspectors who have been grandfathered in and are not certified are not required to abide by any of the current Home Inspection laws.
3. Oregon statute allows the Realtor to sign a home inspection contract as a representative of their client, but do so may exempt the Realtor from coverage under the Home Inspector’s professional liability insurance.
4. WDO inspections are unregulated by any agency in the State of Oregon.
5. Some Home Inspectors obtain a Pest Control Operator’s license from the Dept. of Agriculture as part of their marketing. This license can be misleading to a consumer since it has very little to do with WDO inspections and more to do with state and federal regulations regarding pesticide application, chemical safety and pesticide labeling.

Choosing a Home Inspector and a WDO inspector should be on the basis of ability and proven track record and not because the inspector holds any specific certification.

Wood Destroying Fungi is sometimes referred to as “Dry Rot”, which is somewhat of a misnomer because the fungi do require moisture. The term “Dry Rot” comes to us from the appearance of the wood after it has been damaged by the fungi. Rot damaged wood often has a rectangular checking that is similar in appearance to wood that has been burned. The rot damage can also appear to be very dry. Wood destroying fungi ingest the moisture from the wood at the cellular level, which is what gives the wood the dry appearance.

Wood Destroying Fungi spores are present on brand new dimensional lumber in a dormant state. As long as the moisture content of the wood stays relatively low, the fungi spores remain dormant. If the moisture content of the wood is raised, and if ambient air temperatures are moderate, and if there is a source of oxygen, then the fungi can become active.

Wood Destroying Fungi exists in a three dimensional state in dimensional lumber, which makes topical surface applications of anti-fungal chemicals ineffective. The first step in correcting fungi damage is to locate the source of moisture and eliminate it. Removing all damaged material is a recommended practice to prevent the spread of damage to avoid future confusion over whether a condition is still active or not.

Most commercial lenders who are making loans with greater than an 80% loan to value ratio, require a WDO report that is clear of any existing rot conditions. Government insured loans usually require the WDO report on a certain form called an NPMA-33. The WDO inspector should provide this form.
West of  the Cascade Mountains there two types of termites, two types of ants and one type of beetle that are classified as wood destroying structural pests. Oregon is what is called a “broad spectrum” state which means pest control operators are allowed to use chemicals that will control a broad spectrum of pests.

Damp wood termites can usually be seen flying under the streetlights after dark in late summer. They infest wood that is damp and rotting and we usually don’t chemically treat for these insects. Removing rot and correcting the moisture intrusion will cause these termites to leave.

Subterranean termites (subs) live underground and cannot tolerate the dry oxygen that humans breathe.  When subs enter our atmosphere they enshroud themselves in a mud breathing tube to survive. Consequently, when we inspect for subs we are looking for evidence of their presence since they are not surface foragers. Termite digestive systems contain a host enzyme that breaks wood and cellulose down into a simple sugar for sustenance. Subs are attracted to wood, any type of cellulose and heat. Eliminating soil /wood contact and sources of heat, such as water heaters and freezers, can go a long way toward preventing infestations since the worker and soldier termites are blind and relying on sensory input during foraging. Chemical treatment into the ground is necessary to repel subs.

Carpenter ants do not actually eat wood. They are omnivorous and eat a wide variety of plant and insect life. The damage that carpenter ants do to wood structures is related to nest building. Carpenter ants usually have a central nest and multiple satellite nests. They are very mobile and can cover 100 yards per day. They are attracted by rot, garbage, moisture and debris that provide nesting protection. Chemical treatment to kill carpenter ants is usually advisable.

Moisture ants are commonly mistaken for subs because they are castle builders and their castles look similar to subterranean termite mud breather tubes. As the name implies, moisture ants are attracted to wood with elevated moisture levels. Removing the source of the moisture in combination with a topical pesticide will usually be enough to end this type of infestation.

Anobiid beetle damage is commonly misidentified as powder post beetle damage. True powder post beetles (Lyctiid) only infest hardwoods. False powder post beetles (Anobiid) only infest softwoods. Since we build with Douglas Fir in this area (a softwood) we have no Lyctiid Beetles. Anobiids are attracted to wood with elevated moisture content, where they lay their eggs. When their eggs hatch, the larvae burrow into the wood where they are extremely destructive. I have personally inspected two homes on the Oregon coast that had anobiid damage that was so extensive that tearing the houses down and starting over was going to be more cost effective than repair. These homes were unrepairable.

Wood destroying insect and fungi damage has the potential to be extremely costly to repair. Structural failure in floors and ceilings can be lethal.

As a home inspector, I usually do not recommend that sellers perform repairs. A safer course of action for the buyers is to have the sellers compensate them in another way. Then the buyers can have the repair work performed after they have taken possession of the property and can exercise more control over the work.

If seller repairs are unavoidable, all parties should consider the following:

1. The process should be transparent and the buyers should have free access to the contractor and all documents between the seller and the contractor.
2. Under Oregon statute the buyer may have no recourse against a contractor who contracts with a seller, unless a prior contractual provision has been made.
3. The buyer’s expectations should be spelled out in the repair addendum. To ask the seller to “fix” something can mean many different things.
4. The buyer’s interests can be protected by third party progress inspections before the job is completed and buttoned up.
5. When the seller tries to perform the work themselves or uses the lowest priced contractor, this is usually a recipe for disaster. (The cheapest “fix” does not look so good when everyone is sitting in a court room or the work has to be redone.)

When writing a repair addendum or counter offer a Realtor should avoid referencing the building code. I read many documents where the buyer asks the seller to repair something “to code”. The problem with this approach is that the code may grandfather things in that the buyer would wish to avoid. The code may also be silent on certain issues of workmanship. If you are looking for a way to express a high quality of work, I recommend you use “the prevailing professional practice”.  A counter offer may read “The seller will have the deck repaired to the prevailing professional standard.”  There will be no higher standard than that of the applicable tradesmen.
Thank you for taking the time to read my article. I would be happy to talk with you if you have questions or comments.

Charlie Rouse
Oregon Certified Home Inspector #2
503-708-3211
charlie_rouse@hotmail.com
Associated Master Inspectors
CCB#146715

This entry was posted on Thursday, June 11th, 2009 at 11:27 am and is filed under Real Estate Business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.