Who Pays for Termite Repairs in California?

Who pays for termite repairs in California — the buyer or the seller?

California law doesn't assign termite repairs to either side. It's a negotiated term of your contract. What custom says is that the seller clears Section 1 items — active termite infestations, fungus, and dry rot — while the buyer accepts Section 2 items, the conditions that could cause a problem later. But in Placer County and the greater Sacramento market, the real deciding factor usually isn't custom at all. It's the buyer's loan type, because a VA loan cannot fund in California until Section 1 is cleared.

By Rich & Kat Farless | September 15, 2026

You're twelve days into escrow on a Roseville home. The pest report lands in your inbox, and it's four pages of numbered findings you've never seen before. Some are labeled Section 1. Some are Section 2. There's a repair estimate at the bottom for $3,400, and nobody has told you whose bill that is.

This is one of the most searched mid-escrow questions in California real estate, and one of the most misunderstood. Half the articles you'll find were written for Los Angeles and Orange County, where "the seller pays Section 1" is treated as close to gospel. Up here, it's a genuine negotiation — and knowing how it actually works is worth real money on both sides of the deal.

Here's how we walk our clients through it.

Section 1 vs. Section 2 — and the Section 3 nobody explains

California is unusual. Most states hand you a one-page termite letter. California requires a licensed Branch 3 pest control operator to file a standardized Wood Destroying Organisms (WDO) report with the state, and that report sorts every finding into categories.

Section 1 — active problems. Live termites, existing termite damage, fungus infection, and dry rot. Something is eating or rotting the wood right now. These are the items lenders care about and the ones that stall escrows.

Section 2 — conditions likely to cause Section 1 later. Wood-to-earth contact where a fence post meets a stud, a crawlspace with poor ventilation, a slow shower pan leak, earth-filled porch steps, cellulose debris under the house. Nothing is actively damaged yet. These are almost always the buyer's to handle after closing.

Section 3 — further inspection recommended. This is the category that gets skipped in most explanations, and it's the one that should get your attention. Section 3 means the inspector couldn't see an area — a sealed subarea, a shower stall that couldn't be tested, insulation blocking a crawlspace — and is telling you there could be anything behind it. A report with several Section 3 items is not a clean report. It's an incomplete one, and you should ask for the access to be opened up before your contingency expires.

One more thing worth knowing: the WDO report is separate from your general home inspection. Different license, different professional, different document, different timeline. Your home inspector is not allowed to issue a Section 1 clearance. If you're negotiating both at once, you're really running two parallel repair conversations under the CAR Request for Repairs, and they should be handled as one strategy, not two.

What Section 1 work actually costs around here

Roseville sits in an unusual spot. Much of the Sacramento Valley deals with one termite pressure or the other. Roseville, Rocklin, and the Dry Creek corridor deal with both — subterranean colonies in the heavier clay soils, staying active essentially year-round in our climate, plus drywood activity in older wood-frame construction closer to the historic core.

That means the range on Section 1 work is wide, and the number depends entirely on which pest you've got:

• WDO inspection itself: $85–$185. Many local companies quote around $145 for a full escrow inspection, and some offer it free hoping to win the treatment work.
• Subterranean liquid barrier (Termidor, or an imidacloprid product) on a typical 1,800–2,400 square foot home: $1,400–$3,800, with an 8–12 year effective life.
• Baiting systems (Sentricon, Trelona): $1,500–$3,200 to install, plus $300–$450 per year in monitoring — an ongoing cost that transfers to you as the new owner.
• Localized drywood treatment (spot foam, borate, orange oil): $1,175 on the low end for a contained finding.
• Whole-house fumigation — the tent: $4,000–$9,000 in California, and add $800–$1,500 if the home has a tile roof that has to be stripped and reset.
• Dry rot and damaged-wood repair: priced as carpentry, not pest control. A rotted patio cover post might be $400. A rotted subfloor section under a second-floor shower can run several thousand.

Most Placer County resales we see land somewhere between $800 and $4,000 in total Section 1 work. Fumigation cases are the outlier that turns a routine negotiation into a real one.

Your loan type decides this more than custom does

This is the part almost nobody explains, and it's the part that determines who has leverage.

VA loans. California is classified as a heavy termite-activity state, so a full WDO inspection is required on every VA purchase here, the lender orders it, and Section 1 must be cleared before the loan funds. Not credited. Not negotiated away. Cleared, with a completion notice from a licensed operator on file. If you're a VA buyer, the seller either pays for that work or the deal doesn't close — which is a genuinely strong position, and one worth knowing before you write your offer.

FHA loans. No automatic requirement. But if the appraiser notes visible evidence of infestation, prior treatment, or conducive conditions, the appraisal comes back conditioned on a clear report and you're in the same place as a VA buyer.

Conventional loans. Not required by default. This is where the negotiation is genuinely open, and where a seller has the most room to say "as-is" and mean it.

So before you decide what to ask for, look at the loan. A conventional buyer asking a seller to spend $6,000 on a tent is making a request. A VA buyer asking for the same thing is describing a condition of closing.

What this means if you're selling

If you're listing a Roseville, Granite Bay, or Loomis home — especially one built before the mid-1990s, or one with a wood deck, patio cover, or fence tied into the structure — order your own WDO report before you list.

Three reasons we tell every seller this:

You control the timeline. Finding $3,000 of dry rot in week two of escrow means fixing it under deal pressure, at whatever price the one available contractor quotes. Finding it in advance means getting three bids on your own schedule.

You control the framing. A finding you disclosed up front is a known condition the buyer priced into their offer. The same finding surfacing mid-escrow is a surprise, and surprises get negotiated at two to three times their repair cost. With Roseville price reductions climbing from 9.45% to 23.38% of listings year over year, you don't want to hand a buyer a fresh reason to renegotiate at day fifteen.

You reduce disclosure risk. Dry rot and prior termite damage are material facts. They belong on your Transfer Disclosure Statement and Seller Property Questionnaire whether they've been repaired or not. Documenting them properly is cheap. Litigating them after closing is not.

The one honest tradeoff: once you have the report, you own the knowledge. You can't unsee it, and you'll be disclosing it. That's a feature, not a bug — but go in aware.

Two checks and two clocks before your contingency expires

The first check takes ninety seconds, and almost no one knows it exists.

Every WDO report filed in California goes to the Structural Pest Control Board, and the Board runs a free public property-address search at wdopestboard.ca.gov. Type in an address and you can see whether a WDO inspection was filed on that property in the last two years — before you write an offer.

Two reports in eighteen months on the same house tells you something. A report filed three months ago with no completion notice behind it tells you something else. You can request the full documents from the Board with a copy request form.

We check this on properties before our buyers tour them. It costs nothing, and occasionally it changes the conversation entirely.

The second check is your own calendar, because two clocks are running and both of them catch people.

The 17-day clock. Under the standard California purchase agreement, your inspection contingency defaults to 17 calendar days from acceptance. The WDO inspection needs to happen in the first week — not the second — because you need the report and the repair bids in hand before you can make an informed Request for Repair. Waiting until day twelve is how buyers end up removing contingencies without knowing what they're accepting.

The 90-day clearance window. A Section 1 completion notice is treated as current for 90 days. On a long escrow — a new-construction closing, a contingent sale, a rate-lock extension — that clearance can expire before you fund, and the lender will order a re-inspection. Build that into your timeline rather than discovering it three days before close.

Here's what it comes down to. There is no correct answer to "who pays." There's only what your contract says, what your loan requires, and what your leverage is on the day the report lands.

What we can tell you is that the sellers and buyers who do well with termite findings are the ones who saw the report early, got real bids instead of arguing over the pest company's estimate, and knew before the conversation started whether the other side actually had a choice. That's usually the difference between a $1,200 outcome and a $4,000 one — and it's the same discipline that keeps your other closing costs from creeping.

Your specific situation depends on the age and construction of the home, your loan, and where you are in the timeline. That's a conversation, not a calculator.

Frequently Asked Questions

Is a termite inspection required by law in California?

No. California does not require a termite inspection on every home sale. But VA loans require one on every California purchase, FHA appraisers routinely trigger one, and most buyers order one anyway. In practice, a WDO report is on the great majority of Placer County transactions.

Can a seller refuse to pay for Section 1 repairs?

Yes. Nothing in California law obligates a seller to make or pay for termite repairs. If the seller declines, the buyer's options are to accept the condition, ask for a price reduction or closing-cost credit instead of the work, or cancel within the inspection contingency. If the buyer is using VA financing, though, the loan won't fund without Section 1 clearance — so a refusal usually ends the deal rather than winning the point.

Should the seller do the repairs or just give the buyer a credit?

A credit is often cleaner, and buyers frequently prefer it because they control the contractor and the quality. The exception is a VA or conditioned-FHA loan, where a credit doesn't satisfy the lender. Those loans need documented completion before funding, so the work has to actually happen.

Who pays for the termite inspection itself?

It's negotiable and typically runs $85–$185. Buyers commonly pay for it as part of due diligence, and sellers commonly pay when they order it before listing. On VA loans, the lender orders the inspection and the cost is usually handled by the seller or built into the transaction.

Does homeowners insurance cover termite damage?

Almost never. Termite and dry rot damage is treated as a maintenance issue rather than a sudden loss, so standard policies exclude it. That's exactly why the WDO report matters — it's the only real diligence you get on a risk your insurance won't cover.

Talk it through before the report lands

Termite findings are one of the few escrow surprises you can get ahead of completely — with a pre-listing report if you're selling, or a $0 state database check and a first-week inspection if you're buying. Either way, the leverage goes to whoever saw it coming.

If you're buying or selling in Roseville, Granite Bay, Folsom, Lincoln, Loomis, or anywhere across Placer, Sacramento, and El Dorado counties, we'll walk you through exactly what to expect and how to handle it. Schedule a free consultation at richandkatsoldthat.com/talktous.

About Rich & Kat Farless

Rich and Kat Farless are a husband-and-wife real estate team with over 30 years of combined experience serving buyers and sellers across the Sacramento region. As the #1 husband-and-wife team in Roseville, CA, they specialize in single family, new construction, and luxury properties across Placer, Sacramento, and El Dorado counties. Connect with them at richandkatsoldthat.com.