In the DC Metro area, there are two types of houses: those that have termites, and those that will get termites at some future date. So it's no surprise that, at least for single family homes, most lenders require a certificate from a licenced pest control company saying that the is no evidence of wood destroying incects or damage from these little pests.
But sometimes, the bank doesn't ask for a clear termite report.
Whether or not the bank wants this certificate, there is a section in our boiler-plate contract language that requires either buyer or seller to pay for an inspection and to have a clean bug report by settlement. It there are wood eating bugs, they have to be dead. If there is any damage, it needs to be repaired.
Once in a while, if the lender doesn't ask for a pest inspection, the buyers will just not bother with it, especially if the home inspector didn't note any obvious evidence - termites leave behind tracks, and other insects may leave little mounds of sawdust.
It's important to have the house inspected by a company that offers a one-year warranty - if they show up during the year after the inspection, the pest control company will treat the house at no charge. And after the year is up, it's not a bad idea to keep up a service contract that allows for annual inspections.
And we're talking termites, carpenter bees and other insects that destroy wood. If you've got ants or roaches, they're gross, but they won't eat your house!