Peninsula Real Estate Guide
What a Pest and Termite Report Actually Covers in a Peninsula Transaction
Section 1 vs. Section 2, who typically pays for what, and why the 90-day window matters
|
Section 1 Active Infestation, Must Clear |
Section 2 Future Risk, Negotiable |
90 Days Report Validity Period |
Negotiable Who Pays, Not Set by Law |
Almost every Peninsula transaction includes a pest report, commonly called a termite report, and understanding its two-part structure is genuinely important, since it directly affects what can delay your closing and what’s simply a negotiating point.
What the Inspection Actually Covers
A California pest report, formally a Structural Pest Control Inspection Report or Wood Destroying Organism report, is prepared by an inspector licensed through the state’s Structural Pest Control Board. Despite the common “termite report” nickname, it covers far more than termites alone, including dry rot, wood-decay fungus, wood-boring beetles, and the moisture and soil-contact conditions that invite them. The inspector examines accessible areas, including the foundation, crawl space, attic, and exterior, then files the report with the state, where it becomes part of the property’s permanent record.
Section 1 vs. Section 2: The Distinction That Actually Matters
| Section | What It Means | Typical Impact on Escrow |
| Section 1 | Active infestation or existing damage, currently present | Often required for loan funding, especially FHA and VA |
| Section 2 | Conditions likely to lead to future infestation, not yet active | A negotiation item, not typically required to close |
A Real Conflict of Interest Worth Knowing About
Many pest control companies perform both the inspection and the repair work, which creates a genuine incentive for some inspectors to classify minor cosmetic issues as significant Section 1 damage to generate repair business. Choosing an inspection-only company, and hiring a separate contractor for any needed repair work, is a reasonable way to avoid that conflict.
Who Actually Pays
There’s no law dictating who covers Section 1 or Section 2 work in a resale; it’s entirely negotiated as part of your purchase contract. A common local pattern has sellers covering Section 1 clearance, with Section 2 items becoming a negotiation point or a buyer’s responsibility going forward, but every deal genuinely varies, and the specifics should be written explicitly into your contract or an addendum, not assumed.
The 90-Day Clock
A pest report is generally considered valid for 90 days from its inspection date. After that window, lenders and escrow companies typically require a fresh inspection, which matters if your transaction timeline stretches longer than expected or if a sale falls through and later gets relisted.
Why Sellers Should Consider Ordering Their Own Report
| Avoids a surprise Section 1 finding once a buyer’s own inspector arrives |
| Gives you time to schedule treatment without escrow deadline pressure |
| Lets you choose your own inspector rather than a company the buyer selects |
| Signals a well-maintained property, genuine credibility that can help during negotiations |
Key Takeaway
Section 1 findings can genuinely delay a closing, while Section 2 findings are almost always a negotiation point rather than a hard requirement. Knowing the difference lets both buyers and sellers respond to a pest report calmly rather than reactively.
Frequently Asked Questions
Does Section 1 have to be fixed before closing?
Often yes, particularly for FHA and VA loans, though it’s still a negotiated term of the purchase agreement.
Is Section 2 work required to close escrow?
Generally no, it’s typically a negotiation item rather than a hard requirement.
Who pays for pest treatment in a typical Peninsula transaction?
It’s negotiable, though sellers commonly cover Section 1 clearance in many local deals.
How long is a pest report valid?
Generally 90 days from the inspection date before most lenders require a fresh one.
| Related Reading | |
| How Long Do Homes Take to Sell in San Carlos, CA? | See where pest inspection fits into the escrow timeline. |
| South San Francisco Home Inspection Red Flags | Related concerns for older homes beyond wood-destroying organisms. |
| Understanding Your Preliminary Title Report Before You Buy | Another key disclosure document to review during escrow. |
| The Real Closing Costs to Sell a House in San Carlos | Factor potential pest work into your net proceeds estimate. |
Have Questions About a Pest Report You’ve Received?
I can help you understand what’s a real gate on closing and what’s simply negotiable.
Let’s Talk About Your Transaction
Holly Noto | Coldwell Banker Realty | DRE#01244498, DRE#01908304
580 El Camino Real, San Carlos, CA 94070
650.544.6185 | [email protected]
This content reflects general California Structural Pest Control Board practices as of 2026 and is not legal or pest control advice. Consult a licensed inspector and your agent for guidance specific to your transaction.
