Your closing process is going great, the buyer and seller agreed on home inspection repairs, the mortgage lender is thumbs up and all is right with the world, until…
A CL-100, aka a Wood Infestation Report, can really put a wrinkle in your day. A little wood rot, elevated moisture levels, mold, fungi, termites, you name it - a wood infestation report with even minor defects can set the whole closing process down a dead end road. But why? After seeing thousands of home inspections and wood infestation reports and helping realtors and their clients navigate the murky water, we have a few bits of knowledge to share.
The first is the misunderstanding that a CL-100 must have a “clear” letter. It turns out that this myth was developed by real estate agents as a slang term that the lender is asking for someone to resolve the issues on the wood infestation report. All the lender is asking is for proof that the issues have been resolved. Furthermore, all that is required by a lender or attorney is an invoice from a licensed contractor stating the items that were repaired - not a letter.
The second and biggest one we hear from agents is “we need a letter stating the house is structurally sound”. Think about this one for a minute. What contractor in their right mind would state that the whole house is structurally sound? In fact, all that most lenders require is an invoice of what repairs were completed to eliminate items found on the wood infestation report.
The last issue we see quite often is waiting too long to order the wood infestation inspection and report. This one comes from the fact that the reports are valid for only 30 days. Perhaps your local realtor board should lobby to the state to get this changed but until then, here is a tip. Order the report at the same time as the home inspection. By getting the report early, you can have your contractor review the deficiencies at the same time as the home inspection items. If items need repairing, your contractor can hop on it and provide an invoice to satisfy your lender. The lender cares about the problems being resolved, not the letter stating that some problems existed.
But don’t take my word for it, read the facts for yourself - Understanding Your Wood Infestation Report. You will be glad you did and you might just save a closing that you would have otherwise lost over a technicality.