If you are buying or selling a home in Southern California, a termite report is almost certainly part of the transaction, and at some point you will encounter the terms “Section 1” and “Section 2.”
For most people, these phrases arrive with no explanation and considerable anxiety, usually attached to a repair bill and an escrow deadline. Understanding what they actually mean turns a confusing document into a manageable one.
At 1st Stryke Pest and Termite Control, we perform termite inspections and clearances for real estate transactions across Long Beach and the surrounding area, and here is what Section 1 and Section 2 really mean for your escrow.
The Report Behind the Terms
The document generating these terms is officially called a Wood Destroying Pests and Organisms Inspection Report, produced by a licensed inspector after examining the property for termites, wood-boring beetles, fungus, dry rot, and the conditions that lead to them.
In California, this report and the licensing of the companies that produce it are overseen by the Structural Pest Control Board.
According to the California Structural Pest Control Board, these reports must categorize findings, and that categorization is where Section 1 and Section 2 come from.
What Section 1 Means
Section 1 covers active infestations and existing damage. These are conditions where wood-destroying organisms are currently present or have already caused damage. Live termite colonies, active fungus or dry rot, and the structural damage these organisms have already done all fall under Section 1.
In plain terms, Section 1 items are the actual problems: the things eating or already deteriorating the wood in the structure.
Section 1 items are the ones lenders and buyers care about most, because they represent real, present harm to the home. In many transactions, particularly those involving certain loan types, Section 1 items must be corrected before the sale can close.
This is what people mean when they talk about getting a “clear” termite report or “termite clearance” for escrow: resolving the Section 1 items and having the work certified.
What Section 2 Means
Section 2 covers conditions that are likely to lead to infestation or damage but where no active problem exists yet. These are the risk factors: earth-to-wood contact, excessive moisture, faulty grade levels, leaking plumbing near wood members, or cellulose debris under the structure.
Nothing is currently infesting or rotting the wood, but the conditions are favorable for it to happen, and left alone they often will.
Section 2 items are generally recommendations rather than mandatory corrections. They may or may not need to be addressed for the transaction to close, depending on the lender, the loan type, and what the buyer and seller negotiate.
A cautious buyer often wants Section 2 items corrected too, because addressing the conditions now prevents them from becoming Section 1 problems later.
Why the Distinction Drives Your Escrow
The Section 1 and Section 2 split matters because it determines what has to happen before your transaction can close. Section 1 items are typically the ones a lender requires cleared. That means the corrective work, whether it is treatment for an active infestation or repair of damaged wood, has to be completed and certified within the escrow timeline.
When escrow is on a tight schedule, coordinating that inspection, treatment, and certification quickly becomes essential, and delays in termite work are a common cause of delayed closings.
Getting to a Clear Report
The path to clearance is straightforward once you understand it. The inspection identifies the Section 1 and Section 2 items.
The Section 1 items get corrected, which may involve localized or whole-structure treatment for active termites and repair of any damaged wood. The company then issues certification that the Section 1 work is complete, which is the document escrow needs.
Our termite and pest control services include the inspection, the corrective treatment, and the certification, so the process moves without the handoffs and delays that come from using separate companies for each step.
Who Pays for What
Responsibility for termite work is negotiable and varies by transaction. In many Southern California sales, the seller pays for Section 1 clearance because it is often a condition of the buyer’s financing, while Section 2 items are negotiated between the parties.
There is no fixed rule, and your agent will guide the negotiation, but understanding which items are Section 1 and which are Section 2 helps you understand what is likely mandatory versus what is discretionary.
Do Not Let Termite Work Delay Your Close
The most common mistake we see is treating the termite report as an afterthought late in escrow, then scrambling when Section 1 items turn out to require real work on a compressed timeline.
Getting the inspection done early gives you room to handle whatever comes back without threatening your closing date.
Whether you are a buyer, a seller, or an agent coordinating a transaction, our Southern California pest control team can move quickly to inspect, treat, and certify.
Contact 1st Stryke to schedule a termite inspection and keep your escrow on track.
