What Is a WDO Inspection?

A WDO inspection is California’s standard report on wood-destroying organisms — termites, dry rot, fungus, and similar damage — required by most real estate transactions in the state. If you’re buying or selling a home in the Bay Area, you’ll almost certainly encounter one. Here’s what it is, when you need it, and how to read it.

What WDO stands for

WDO is short for Wood-Destroying Organisms. The inspection — sometimes called a “termite inspection” or “Section 1 report” in conversation — actually covers more than termites. It looks for:

• Subterranean and drywood termite activity and damage
• Wood-destroying fungi and dry rot
• Wood-boring beetles
• Carpenter ants and carpenter bees
• Conditions that could lead to future infestation (leaks, earth-to-wood contact, poor ventilation)

The inspector is licensed by the California Structural Pest Control Board — a separate license from a general pest control operator. The report they produce is an official, signed document.

When do you need a WDO inspection?

You’ll typically need one in these situations:

Buying a home in California

Many California lenders, and especially VA and FHA loans, require a current WDO report before closing. Even when not strictly required, buyers usually request one as part of due diligence.

Selling a home in California

Sellers often order a preemptive WDO report before listing — it gives them transparency on what’s there, lets them fix issues on their own timeline (rather than under buyer pressure), and prevents nasty surprises during escrow.

Refinancing

Some refinances, particularly with government-backed loans, will require a current WDO report.

Out of escrow

Homeowners with no transaction pending also order WDO inspections for peace of mind — particularly older Bay Area homes where decades of moisture exposure and subterranean termite pressure can accumulate quietly.

Section 1 vs Section 2 — the most important distinction

California WDO reports split findings into two categories:

Section 1 — active or current damage

These are findings that exist right now and require correction:

• Live termite colonies (subterranean or drywood)
• Existing termite damage
• Active wood-destroying fungus or dry rot
• Other current infestations or damage

In most real estate deals, Section 1 items must be corrected before close of escrow. Lenders often won’t fund a loan with open Section 1 items.

Section 2 — conditions likely to lead to infestation

These are conditions that haven’t caused damage yet but probably will if left alone:

• Earth-to-wood contact (soil touching siding, framing, or fence posts)
• Plumbing leaks under the house
• Poor crawl-space ventilation
• Faulty drainage or grading
• Cellulose debris (wood scraps, cardboard) under the structure

Section 2 items are typically negotiated between buyer and seller — they’re flagged for awareness but not always required to be fixed before close.

What happens during the inspection?

A WDO inspection typically takes 1–2 hours for an average single-family home. The inspector walks the exterior, interior, crawl space, attic, and any accessible structural areas, looking for visible signs of WDO activity and the conditions that lead to it. They document findings with a written report and a property diagram showing where each item was found.

You don’t need to do anything to prepare except make sure the inspector has full access — to the attic, crawl space, garage, water heater closet, under sinks, and anywhere wood framing is exposed. Items stored against walls or blocking crawl-space hatches can prevent a complete inspection.

How much does a WDO inspection cost?

Bay Area WDO inspections typically run $150–$400 depending on home size, accessibility, and complexity. The cost of fixing items found is separate and varies hugely — from a few hundred dollars for minor Section 2 corrections to several thousand for active termite treatment plus damaged-wood repair.

Banner’s WDO inspection includes a free re-inspection if you complete the recommended corrections — many companies charge separately for that.

Reading your report

Every California WDO report includes a property diagram (a sketch of the home with numbered findings), an itemized list of Section 1 and Section 2 findings, and recommended corrections for each. Bring it to the inspector if you have questions — most are happy to walk you through it.

If you’re buying, your real estate agent should also review it with you. Items in the report aren’t deal-breakers by themselves — they’re a negotiating tool.