In real estate trading, if a deal seems unbelievably good, then it probably isn’t to be believed. A house with an unknown level of termite damage poses and unknown financial risk.

A house that has been attacked by termites has lost some value.  It the attack has been severe or ongoing, then the value of the house is way down. A big problem is that the inspector has no way to assess the extent of past damage without ripping open a few walls and other surfaces. Remember that buildings weakened by termites are more likely to fail during severe storms or earthquakes.

Termites hide.  The damage they do is nearly all concealed and can only be seen by ripping things apart.  We can guess the extent of the damage, but we have to really mess things up to be certain and that means a lot of costly repairs even if nothing much is found Vendors don’t like that and only allow an inspector to perform a visual inspection, usually without even being able to move furniture to look behind. Some vendors will try hard to conceal defects that might make the house look bad.

To determine likely repair costs, you would need what is called an invasive inspection by both the termite inspector and a building professional. This gets tricky. If the vendor will agree (in writing) to let your inspectors conduct an invasive inspection without either them or you having to make good any surfaces they choose to open, then it may be worth considering the purchase. Normally you would make an offer subject to the inspection works providing a repair cost estimate below an agreed figure (which you don’t tell the inspector!). That gives you room to get out if the place really isn’t worth it. You would want a good lawyer to draw up the contracts. Mostly the vendor will say no.

Chances are that a few more things needing fixing will be found during the partial demolition before repairs begin.  You could also be up for works to prevent immediate reinfestation.  All this adds up.

Bottom line is that it would have to be an extremely desirable house and a very appealing sale price.  Is this particular house really worth the risk?

Pest managers seem to be good at buying discounted termite-damaged houses and fixing them up to live in. If you can get a good estimate of the damage, are willing to take the chance, you can ask the vendor to drop the price by a sum that’s larger than the expected control, repair and risk-reduction costs. Most people will keep looking.