Are Termite Bonds Worth the Money?

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Education & Training with Sell with Soul

termite

In 2005 and 2006 I bought three homes in Alabama. Coming from the Denver Desert, I'd had no experience with termites (or fleas, for that matter, but today we're talking about termites) - so when one of the homes I bought featured a "termite bond" I was unimpressed. The other two homes did not have that particular feature, so I didn't think much about it.

The following year I got a bill to renew my termite bond, and I did. Ditto every year after that, although every year I debated whether it was a good use of my $220. I asked a few local real estate agents for their opinions, and from their vague responses I got the impression they really didn't know either whether or not the Bond was worth the ongoing investment.

So, I'm asking my Active Rain friends... is a Termite Bond something I should be proud of, excited about and happy to pay for every year? Or is it just a bit of a scam designed to scare me out of $220 every March?

Thanks for your thoughts!

 

 

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Show All Comments
Ambassador
665,862
Ann Allen Hoover
RE/MAX Advantage South - Hoover, AL
CDPE SRES ASP e-PRO Realtor - Homes for Sale - AL

Hi Jennifer!  I'd be scared not to have a termite bond in Alabama.  Those are some hungry little suckers!

March 17, 2011 10:34 AM #1
Rainmaker
432,324
Jennifer Allan-Hagedorn
Sell with Soul - Pensacola Beach, FL
Author of Sell with Soul

Thanks Ann. So, they have value when you go to sell the house? My other two places don't have bonds - do you find it's an issue with buyers?

March 17, 2011 10:39 AM #2
Ambassador
665,862
Ann Allen Hoover
RE/MAX Advantage South - Hoover, AL
CDPE SRES ASP e-PRO Realtor - Homes for Sale - AL

I've heard it put this way.....there are 2 types of homes in Alabama, those that have termites and those that will get them.  I recommend getting a bond that covers Formosan Termites (not all do).  They are particularly voracious eaters that have been a problem recently and can cause lots of destruction before being detected.  Yes, definitely an issue with buyers......and lenders.

March 17, 2011 10:57 AM #3
Ambassador
1,531,996
Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

I had not heard of this, so it is like insurance against termites? Like people buying flood insurance for 100 year flood events?

March 17, 2011 11:04 AM #4
Rainer
164,285
Sally Lawrence
Country Real Estate - Tehachapi, CA
CHS, e-Pro, SFR, REALTOR

I've never heard of termite bonds either.  Here, we do a termite inspection and the inspector guarantees his work for a certain period of time.  Generally, once you have treated a termite problem, it's pretty much done unless something else changes in the environment of the house.

March 17, 2011 03:28 PM #5
Ambassador
754,052
Brenda Mullen
RE/MAX Access - Schertz, TX
Your San Antonio TX Real Estate Agent!!

Same thing here in Texas.  Seems kind of like an expensive thing to do every year.  Do they come out and treat and then bond, or do you have to renew every year and they will treat for free "if" there is an infestation? 

March 17, 2011 03:39 PM #6
Rainmaker
268,895
Mike Mitchell
Real Living Kee Realty - Saint Clair Shores, MI
REALTOR (R)

Very interesting, we don't have a big termite problem in Michigan that I'm aware of. The only time we used to get termite inspections here was when there was an FHA loan, but now FHA hasn't required them for several years now. What exactly does the bond do? Might be worth the money.

March 17, 2011 08:59 PM #7
Rainer
30,712
Bob Sooy
Realty World Northeast LLC - Sugarloaf, PA

Wow... never heard of it! I pay for year round pest protection on my house (in PA), but covers all pests including Termites.

 

March 17, 2011 10:39 PM #8
Rainmaker
432,324
Jennifer Allan-Hagedorn
Sell with Soul - Pensacola Beach, FL
Author of Sell with Soul

Maybe it's just a southern thing? I'd never heard of it either and don't really know what it's all about. My understanding is that you pay around $200 every year which includes an inspection (not a treatment), and if you ever get termites, the treatment is covered. I've never read the fine print - maybe I should - it sure sounds like something that sets you up for disappointment if you don't have exactly the right coverage or follow the "rules" perfectly.

March 18, 2011 07:11 AM #9
Ambassador
665,862
Ann Allen Hoover
RE/MAX Advantage South - Hoover, AL
CDPE SRES ASP e-PRO Realtor - Homes for Sale - AL

I searched around and found a post that Anita Clark from Warner Robins GA wrote on this subject.....Do I Need A Termite Bond?  Pretty good explanation.

March 18, 2011 08:45 AM #10
Anonymous
Anonymous
Julie Baswell

I'm not sure what a "termine bond" is but, in the midwest, as far as I know, it's required to have a termite inspsection and treatment, if necessary.  You then have  a warranty for an annual fee which doesn't necessarily even include an inspection.  However, read the fine print carefully.  Some of the older policies are worth their weight in gold; most of the new, not so.  Many of the policies sold today have an annual renewal fee, but ALL it does if you get a terminate (re)infestation is guarantee that they will retreat for free.  Generally, there is no provision or coverage for the damage the little buggers have done before you catch them.  I have friends with both kinds of policies -- one has had extensive work done for free; the other needs extensive work done but can't afford it. 

March 18, 2011 06:38 PM #11
Anonymous
Anonymous
H Taylor

Well, I my first knowledge of a termite bond/insurance was when I had my track home built in 2003 in South Carolina. The bond was established with the company that applied original treatment before I closed on home. Then the annual renewal notices/payments came! I have been paying $185 per year to keep the bond and they just do a walk-around inspection only to say that nothing has been detected. Then on the fifth year in 2008, they charge $350 for a "real" treatment around foundation. My annual renewal is coming up this week and wanted to investigate further whether this whole thing is just another consumer ripoff joke and not worth my money. Shouldn't homeowner's insurance cover this anyway? I will be calling my insurance company on Monday, but wanted to see if any expert opinion or advice is out there in meantime! Thanks!

April 03, 2011 12:46 AM #12
Anonymous
Anonymous
Brock

I'm contimplating the "termite bond" question as well.  I live in NW Florida.  I have a current pest contract but the chemical sprayed don't include termite protection.  A termite bond is a seperate agreement.  There is an initial cost based on the linear footage($3 - $5/LF, $800 in my case) of your home and then a yearly inspection/treatment ($140) each year after that.  The bond can be purchased for $100K of coverage or $50K of coverage.  I am considering the $50K bond which is what equates to the $140/year for my home.  This type of policy insures you in case of a "live" infestation.    The sticking points for me are that if you purchased a bond and maintained a current policy and "preexisiting" termite damage is discovered; your basically out of luck.  However, I guess that's fair considering the initial treatment kills everything so after that...anything that is found would have been from before the coverage was initiated.  My pest contract is an additional $225 so basically I would be paying $265/year to keep creepy crawlies away.  My initial thought is to just have an WDO(pest) inspection every year but I'm not aware of the protection that comes with that in case something does happen.  Being that a WDO inspection is just visual, it is my understanding that you only catch about 30-40% of what might be possible.  It just seems like a lot of money?!?!!??!

October 18, 2011 06:51 PM #13
Anonymous
Anonymous
Jim

Hi everyone,

I live in Florida and bought a two story home that was 9 years old at the time and have owned it for about 11 years now.  I had a termite inspection performed when I bought the home and bought a termite bond at that time, which I have maintained since then.  Well about a year and a half ago I had a pipe break upstairs, which promptly flooded two rooms; we had inspectors come out to assess the damage as well as our insurance company representative. We have a different company for termite damages.  During the water damage inspection, they discovered that most of a wall had been eaten by termites; we called our termite company and here is what they said: “Because the damage looked OLD and they couldn’t tell when the damage occurred they wouldn’t cover the cost.  They would only cover the cost if they found LIVE termites.”  This is because I couldn’t prove that the damage wasn’t done when the previous owner owned the house.  The moral to this is that if you get a termite bond make sure that the company you get will cover ANY termite damage.

 

Good luck,

 

Jim

 

March 24, 2012 05:36 AM #14
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Rainmaker
432,324

Jennifer Allan-Hagedorn

Author of Sell with Soul
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