Your agent mentions a WDI inspection. Your escrow officer follows up to confirm it’s required before funding. Suddenly you’re wondering whether this is the same as the general home inspection you already scheduled, how long it takes, and whether a bad result can push your close date back or kill the deal entirely. That uncertainty is common, and it’s worth clearing up before you’re mid-escrow with no time to spare.
A WDI inspection (short for wood-destroying insect inspection) covers termites and other organisms that structurally damage wood, including fungus decay. It’s a separate inspection from the general home inspection, performed by a licensed structural pest control operator and documented on a standardized state form. At Top Termite Co. Inc., we’ve been doing this work in Los Angeles since 1993, focusing exclusively on termite inspections rather than general pest control. The escrow-specific side of this process is something we work through with buyers, sellers, and real estate professionals every day.
Here’s what the process actually looks like from the moment an inspection is requested to the document escrow needs to close.
Why Your Escrow Company Is Asking for a WDI Inspection
California doesn’t automatically require a WDI inspection on every home sale. What makes it required in a specific transaction is either the purchase contract (which may include pest inspection as a condition) or the buyer’s lender, which may impose it as a financing condition before funding the loan.
Loan type matters here. FHA removed its blanket mandatory pest inspection requirement in 2005 and now requires one only when there’s evidence of active infestation, a local ordinance mandates it, it’s customary to the area, or the lender exercises discretion. VA loans in California, by contrast, require a wood-destroying organism inspection before the loan can fund, and any active infestation or structural damage must be resolved before closing. Conventional loan requirements vary by lender. If you’re not sure which category applies to your transaction, your loan officer can tell you in a few minutes.
Once inspection has been ordered as a condition of the contract or financing, California Civil Code Section 1099 requires the seller to deliver a copy of the completed report to the buyer before title transfers. That delivery obligation is why the escrow officer tracks the report, and why it can’t simply be skipped once it’s been requested.
What Happens During the Inspection
The inspection itself is less disruptive than most buyers and sellers expect. A licensed inspector visits the property and examines all accessible areas: attic, crawlspace, foundation, garage, and visible wood framing. The visit typically runs 45 minutes to an hour and a half, depending on property size and how much of the structure is accessible.
Two things are worth knowing about what the inspector can and can’t see. First, the report must explicitly identify any inaccessible areas and explain why, so a seller who has sealed off the crawlspace or a buyer who can’t get into a locked garage should resolve access before the inspection, or accept that those areas will be noted as uninspected. Second, only a licensed Branch 3 field representative or operator employed by a registered company is authorized under California law to issue the official Wood Destroying Pests and Organisms Inspection Report. That’s the specific form regulated by the Structural Pest Control Board; a general home inspector’s observations about pest activity don’t substitute for it.
After the inspection, the inspector posts a dated tag with the company name in the attic, subarea, or garage as required under the Structural Pest Control Act. A copy of the report is filed with the Structural Pest Control Board no later than 10 business days after the inspection date.
Reading Your Report: Section 1, Section 2, & Section 3
The standardized report divides findings into three categories. The difference between them matters because they carry different consequences for your escrow.
Section 1 Findings
Section 1 identifies active infestation or existing damage that requires corrective work now. This includes live termites, evidence of drywood termite activity (frass, galleries, damaged wood), subterranean termite shelter tubes, or active wood fungus decay. Section 1 findings are the ones that can hold up a loan: most lenders, and VA lenders in California specifically, require active infestation and structural damage to be resolved before funding. Los Angeles’s older housing stock, combined with documented coastal and inland drywood termite pressure, produces Section 1 findings at a higher rate than newer construction markets, so finding them doesn’t mean the property is unusual.
Section 2 Findings
Section 2 identifies conditions that aren’t currently infested but are likely to lead to infestation or damage if left unaddressed. Common examples include earth-to-wood contact at the foundation, excessive moisture under the house, or wood debris in the crawlspace. Section 2 items don’t block loan funding or prevent issuance of a clearance, but they’re frequently used as negotiating points between buyer and seller.
Section 3 Findings
Section 3 notes areas the inspector couldn’t access and recommends further inspection once access becomes available. For example, behind stucco cladding or beneath flooring. These aren’t findings of damage; they’re flags that the condition of those areas is unknown. Buyers should take Section 3 notations seriously, because what’s behind inaccessible surfaces can become Section 1 findings once opened.
Timing the Inspection Within Your Escrow
The California Residential Purchase Agreement gives buyers a default 17-day contingency period to complete inspections and decide whether to proceed, renegotiate, or cancel. That window shrinks quickly once you account for scheduling lag, report turnaround, and the time needed to complete corrective work if Section 1 items surface.
In Los Angeles escrows, the biggest delays happen when inspection is scheduled after the appraisal rather than alongside it. The appraisal and pest inspection can run concurrently. There’s no sequencing requirement. Ordering the pest inspection the day escrow opens, rather than waiting for the appraisal appointment, can add a week or more of working room if remediation turns out to be needed.
The 10-business-day filing requirement with the Structural Pest Control Board is also worth understanding from a timing perspective. It’s not just an administrative formality. Delays in scheduling push the entire chain (including filing, delivery to the buyer under Civil Code Section 1099, and lender review) toward the outer edge of your contingency window.
What Happens If Section 1 Items Are Found
California law doesn’t dictate who pays for Section 1 corrective work. Responsibility is entirely a matter of contract negotiation between buyer and seller. In practice, sellers most often cover Section 1 treatment because lenders won’t fund without clearance, and the alternative is renegotiating price or losing the buyer entirely.
Once an agreement is reached, the required treatment is performed. Whether that’s localized wood treatment, tenting and fumigation, or subterranean termite treatment depends on what was found. A homeowner can technically complete minor repairs independently, but the pest control company must re-inspect that work before issuing the Notice of Work Completed (sometimes called the Section 1 Clearance), which is what the escrow officer and lender are waiting for before proceeding to funding. The document chain runs: inspection report, corrective work, re-inspection, Notice of Work Completed. Escrow doesn’t close until that chain is complete.
How to Keep Your Escrow on Track
The fastest path through a Section 1 finding isn’t hunting for the cheapest treatment company after the report comes back. It’s having the inspection, treatment coordination, and clearance handled without gaps between handoffs. When the inspector already has relationships with licensed fumigation and repair subcontractors, work can be scheduled within the same week rather than restarting a vendor search mid-escrow.
That’s how we approach it at Top Termite Co. Inc.. Our inspections feed directly into our subcontractor network for repairs and fumigation when Section 1 work is needed, so the document chain from report to clearance stays on a single timeline. If you’re in escrow in the Los Angeles area and a WDI inspection has been requested, reach out to us at (805) 228-4845.