Overview
In California, the sale of real property almost always triggers a Wood Destroying Organism (WDO) inspection — commonly called a "termite inspection." But the inspection applies to much more than just termites. It covers all wood-destroying organisms and conditions: subterranean termites, drywood termites, wood-boring beetles, fungus/dry rot, excessive moisture, and earth-to-wood contact. Understanding what a WDO report means — and what Section 1 vs. Section 2 findings require — is essential for both buyers and sellers.
Why This Matters
Misunderstanding a WDO report can cost sellers significant money (treating conditions that don't require treatment) or leave buyers purchasing a home with undisclosed structural issues. Knowing the difference between Section 1 (active, requires treatment) and Section 2 (conditions likely to lead to infestation) empowers you to negotiate effectively and prioritize repairs correctly.
1What Is a WDO Inspection?
A Wood Destroying Organism inspection is performed by a licensed Structural Pest Control (SPC) inspector — in California, licensed by the Structural Pest Control Board (SPCB). The inspector examines all accessible areas of the structure: foundation, subarea (crawl space), attic, exterior, and interior wood components visible from ground level. The report documents every finding of current infestation, damage, or condition that could lead to damage.
California requires SPC inspectors to report all conditions — even when no treatment is needed. Receiving a report with findings is normal; it does not mean a property is severely damaged or untreatable.
2Section 1: Active Conditions Requiring Treatment
Section 1 items are infestations or conditions that currently exist and must be treated or repaired. In a real estate transaction, escrow often requires all Section 1 items to be cleared before the sale can close. Section 1 includes:
- Active subterranean termite infestation (mud tubes, live termites, active damage)
- Active drywood termite infestation (frass pellets, live colony in wood)
- Wood-boring beetle activity (exit holes with powdery frass)
- Active fungus/wood decay where the wood is compromised structurally
- Earth-to-wood contact (wood siding or framing in direct contact with soil)
- Faulty grade (soil level too high relative to wood framing)
Section 1 clearance does not mean all underlying damage is repaired — it means the active infestation has been treated. Structural repairs to damaged wood are typically quoted separately and may require a contractor.
3Section 2: Conditions Likely to Lead to Infestation
Section 2 items are not currently active infestations — they are conditions that, if left unaddressed, are likely to develop into Section 1 conditions. Section 2 treatment is often negotiable in real estate transactions. Section 2 includes:
- Wood-to-soil proximity (not yet contact, but close)
- Moisture accumulation from plumbing leaks, condensation, or poor ventilation
- Cellulose debris (wood scraps, form boards) in the subarea
- Old or inactive fungal staining that has not yet caused structural compromise
- Debris accumulation that could harbor moisture or provide food for termites
Addressing Section 2 conditions proactively — even when not required by the transaction — is significantly less expensive than treating a Section 1 infestation that develops from the same condition.
4The Inspection Process: What to Expect
A standard WDO inspection takes 1–2 hours for an average home. The inspector will:
- Examine the entire accessible subarea (crawl space) with a flashlight and probe
- Inspect the attic for drywood termites, moisture, and wood-boring beetles
- Walk the exterior perimeter examining wood-to-soil contacts, foundation, and stucco
- Inspect all accessible interior rooms for evidence of water damage, wood decay, and infestation
- Probe suspect wood to test for hollow galleries or decay softening
- Document all findings with written descriptions and, in our reports, photos
California inspectors are required to note all inaccessible areas they could not inspect (locked crawl spaces, finished subfloors, sealed attics). These areas may require re-inspection before final clearance.
5After the Inspection: Understanding the Report
The written report identifies each finding by number, describes its location, and categorizes it as Section 1, Section 2, or further inspection needed. Each finding includes a recommended treatment or repair. Our reports also include written photos of all active conditions.
- Read each finding description carefully — some require treatment, some only monitoring
- Compare the inspection findings to the inspector's notes on inaccessible areas
- Get a written treatment proposal with line-item pricing for all Section 1 items
- Ask whether structural repair quotes are included or separate
- In a real estate transaction, negotiate who pays for Section 1 clearance before signing
6Clearance and Completion Reports
After treatment, the inspector returns to verify that all treated Section 1 conditions have been addressed and issues a Completion Notice. This document is required by escrow to close a real estate transaction. Annual inspections — not tied to a sale — help homeowners catch new infestations before they cause significant structural damage.
Key Takeaways
- 1Section 1 = active infestation requiring immediate treatment; Section 2 = risk condition, often negotiable
- 2WDO inspections cover more than termites: beetles, fungus, moisture, and earth-to-wood contact
- 3Section 1 clearance treats the infestation — structural repairs may be quoted separately
- 4Inaccessible areas noted in reports may require follow-up inspection for complete clearance
- 5Annual inspections catch new infestations early, before costly structural damage occurs
- 6Address Section 2 conditions proactively — they become Section 1 over time
Frequently Asked Questions
Do I need a termite inspection if I'm not selling my home?
It's not required, but it's strongly recommended. Annual WDO inspections catch infestations when they are small and treatment is simpler. Termites can cause tens of thousands of dollars in structural damage before becoming obvious. The cost of an annual inspection is minimal compared to the cost of treating an advanced infestation.
Who pays for Section 1 treatment in a real estate transaction?
This is negotiable and varies by transaction. California has no law requiring either party to pay — it's a contract issue. Common arrangements: seller pays all Section 1, buyer accepts the report and gets a credit, or costs are split. Section 2 treatment is typically negotiated separately, or left to the buyer after closing.
Can a home fail a termite inspection?
There is no "pass" or "fail" — the inspection reports findings. Every home has some findings; the question is how significant they are and what treatment is required. Even severe Section 1 infestations can be treated and cleared. The report documents current conditions; it doesn't place a permanent value judgment on the property.
How long is a WDO completion notice valid?
California does not specify an expiration, but real estate agents and lenders typically require an inspection dated within 60–90 days of close of escrow. If significant time passes between inspection and close, a re-inspection may be requested to confirm no new activity has developed.
Have questions about your specific situation?
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