Termites cause over $2 billion in damage every year in the United States. Although they are a natural part of the forest, where they are helpful in breaking down dead wood, they become a hazard to wood structures, especially homes. Termites are most common in the southeast of the country, but they can be found in almost every state. In termite-heavy areas, regular inspection and treatment is common. If termite infestation is not prevented and treated regularly, it can seriously affect the value of a home. (For related reading, also see 10 Hurdles To Closing On A New Home.)

TUTORIAL: How To Buy Your First Home

Tent Fumigation
Once a termite infestation begins to invade the wood in the walls of a house, spot treating no longer fixes the problem and a full tent fumigation of the house is often required. This involves putting a plastic tent over the entire house and fumigating it with chemicals that kill the termites. The residents of the house have to move out for three to five days until the chemicals dissipate. Depending on the size of the house, the procedure itself can cost between $1,500 and $4,000. This treatment does not correct any of the structural damage the insects have already done, so there may be further repair costs. Room and board costs also have to be figured into this treatment.

Structural Collapse
Termites eat wood, rather than just burrow through it. Over time, they can chew through so much of a structural beam that it gives way. This can not only cause massive damage to a home, but it can be difficult to replace the structural beams without ripping out walls and ceilings. There is no financial cap on having to repair this kind of damage, and it is not covered under most homeowner policies. If a house becomes structurally unstable, the municipality can deem it unsafe and force the homeowners to move until it is professionally repaired.

Inability to Sell Your House
No one wants to live in a house full of termites. Some states require a disclosure from a seller about any known termite infestations. In other states, the buyer's lender requires one of these "termite letters." If you have had a serious infestation because you did not do regular treatment and maintenance, you may find it impossible to sell your house until you have the problem eradicated and the damage fixed.

TUTORIAL: Buying a Home

How to Tell If You Have Termites
The best way to determine if you have termites in the structure of your home is to call a professional. However, there are some signs that you can look for ahead of time. One of the most distinctive traits of termites is that they build mud tunnels to travel on their frequent routes. These tunnels will snake across foundation walls or around wooden posts and look almost like brown vines from a distance.

Once they have burrowed to the outside of a wooden structure, you may see elongated holes along the grain of the wood with some sawdust in or below the hole. In the spring, you may see termite swarmers with long narrow wings for a short time. These termites are seeking to create a new colony and will eventually shed their wings and mate. The presence of swarmers usually denotes a large, extensive colony.

Recommended Treatment
Different parts of the country have various species of termites. Some respond better to certain treatments than others. In the Southeast, a monthly spraying of a pesticide, such as Termidor, around exterior foundation walls is often enough to provide a barrier to stop termites from entering the house. Some companies also use termite baits, which cause the termites to eat treated paper that kills them. No matter what method is used for extermination and prevention, regular monitoring in termite-prone areas is critical.

The Bottom Line
Termites can cause serious damage to wooden structures and are a threat that should be insured against through regular maintenance and treatment. In some areas of the country, they pose the largest financial threat to a home. (For additional reading, also see 5 Mistakes Real Estate Investors Should Avoid.)

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