ask george & chuck
Oct. 9, 2006

Termite inspections, bidding on foreclosures ...
Answers to real estate questions as appearing
in the Houston Chronicle

Dear George: My husband and I purchased our first home in February 2004. We worked with a REALTOR® and received financing through a well-known lender. We were ignorant about a lot of crucial elements of the process and relied heavily on our lender and agent for guidance. Unfortunately, we were not aware nor were we informed of the need to get a termite inspection; our lender apparently didn't require one.

Sixteen months after buying our home, we found termite damage in the floors of one bedroom and treated it ourselves. Last week, we found active termites and damage in the bathroom that was covered with wallpaper. A thorough inspection of the home by a pest-control service found extensive damage to the home and the representative said that the damage had been occurring for quite some time. The seller's disclosure notice from our transaction does not indicate any termites. Are sellers required to disclose previous termite damage? Since our lender didn't require the inspection and we didn't know to have one done, do we have any grounds for legal recourse?

Answer: The first thing that you should do, and it appears that you are already doing this, is to repair the damage. If a seller is aware of active termite infestation or previous termite infestation, the seller should disclose it. However, what sellers should disclose and actually disclose sometimes are not the same thing. Proving what sellers knew or didn't know in court can be costly, time consuming, and emotionally draining. Your REALTOR® probably had no knowledge that the seller's disclosure contained a falsehood, but he's supposed to act in your best interest and should have recommended a termite inspection for your home. The lender does not represent you, and it's normal for some lenders to not require termite inspections. From what you've said, you likely don't have a justifiable complaint against the lender.

Dear George: We purchased a newly built home and had to install a $4,000 water-treatment unit. Should a builder have to disclose problems with the water during the sales process?

Answer: Registered builders of new homes in Texas are not required to complete a seller's disclosure. However, a builder is required to provide access to potable water and is prohibited from making any false or misleading representations in order to induce you to enter into a purchase agreement. Have other homeowners in your area installed water-treatment units?

Dear George: My partner and I bid on a foreclosed house. Two days after our offer, we were told we needed to have our best and final offer in by close of business that same day; our REALTOR® informed us that the sellers had several offers. After the supposed deadline for offers, people were seen showing the house. Ten days after we made our last offer, we finally heard that our offer wasn't accepted. Does this seem ethical to you? Does this sound like the sellers were waiting for a better offer after our best offer?

Answer: It's not unusual or unethical to be asked to make your best and final offer. After all, the agent who listed the house for sale has a duty to represent the interests of the owner while treating you fairly. It's also not unusual to have showing traffic continue while the owner is making up his mind, considering the merits and drawbacks of different offers. There does not appear to be anything unethical or even questionable regarding how you were treated.