Termite due diligence for Michigan self-directed IRA property

Small wings near a basement window, a mud-like line on a foundation, or soft wood at a sill can change the questions a buyer needs to ask. None of those observations proves the extent of an infestation or the cost of repair. They do show why a quick look at exposed framing is not the same as a property-specific termite and wood-destroying insect review.

A self-directed IRA buyer has another issue to settle before closing: how the account will authorize and pay for inspections, treatment, opening concealed areas, structural repair, and follow-up work. The plan should not depend on the IRA owner applying pesticide, removing damaged wood, supplying materials, or paying a vendor personally while waiting for the custodian.

Start with the building history

Ask for prior wood-destroying insect reports, treatment proposals, service agreements, warranties, pesticide application records, invoices, photographs, repair documents, insurance records available to the buyer, and permits or final approvals for related construction. Put the records in date order and match each item to a location. A receipt for treatment does not say whether damaged framing was opened, repaired, or inspected afterward.

Look for gaps in the file. The seller may remember a treatment without having the product label or application diagram. A warranty may belong to the prior owner, exclude part of the building, require periodic inspections, or have already expired. Ask the issuing company what can transfer and what it will inspect before making the warranty part of the purchase decision.

• Dates, locations, and reported pest type for each inspection or treatment
• Company and applicator names, credentials, application diagrams, product labels, and reentry instructions
• Areas drilled, trenched, baited, sprayed, opened, replaced, reinforced, or left inaccessible
• Moisture, drainage, plumbing, roof, siding, crawlspace, or ventilation work connected to the finding
• Warranty coverage, exclusions, transfer steps, renewal dates, and required follow-up visits

Use a focused inspection scope

A general property inspection may identify visible insect evidence or damaged wood, but its agreement may exclude pest identification, concealed damage, invasive probing, treatment design, and engineering conclusions. Ask what the inspector will examine, which outbuildings are included, how inaccessible areas will be reported, and when a pest-management professional or structural professional should join the review.

The inspection should connect exterior and interior conditions. Review the foundation perimeter, sill areas, crawlspaces, accessible floor framing, porches, decks, steps, attached garages, utility penetrations, wood stored near the building, and additions where old and new construction meet. Inside, note damaged trim, hollow or soft wood, discarded wings, shelter tubes, frass-like material, staining, and prior patches without deciding the cause from appearance alone.

Record the inspection conditions. Finished walls, insulation, stored belongings, low crawlspaces, snow, landscaping, inaccessible tenant areas, and unsafe framing can hide the parts that matter. A report should identify what was not seen. The buyer can then request access, obtain a specialist review, carry a documented allowance, change the offer, or decline the property rather than treating an excluded area as clear.

Separate active evidence from old damage

The useful question is not simply whether a building has ever had insects. Ask the qualified professional to distinguish evidence of current activity, evidence of prior activity, damaged wood with an uncertain cause, and conditions that make future activity easier. That distinction affects the next step. Treatment, monitoring, moisture correction, structural repair, or further opening may be appropriate in different combinations.

EPA notes that people often do not know termites are present until they see a swarm or encounter damage during construction. It also recommends periodic inspection and reducing conditions that attract termites, including excess moisture, leaks, blocked vents, wood debris beside the building, and poor drainage near the foundation. Those are general prevention points. They do not determine whether one Michigan building has an active infestation.

Do not cover evidence before the investigation is complete. New trim, paint, insulation, sealant, or framing can make the area harder to evaluate and can erase the relationship between the insect evidence, moisture source, and damaged member. When opening is justified and permitted, agree in advance on the location, method, documentation, temporary protection, and restoration responsibility.

Follow moisture and wood contact

Termite and wood-damage review overlaps with roof, plumbing, exterior-wall, drainage, and crawlspace due diligence. Follow water from gutters and downspouts to grade. Check leaks around plumbing, windows, doors, decks, and mechanical penetrations. Note wood or siding close to soil, buried trim, damp crawlspace conditions, blocked ventilation, and firewood or construction debris beside the structure.

West Michigan rain, snow, freeze-thaw cycles, and seasonal humidity can change what is visible from one visit to the next. A dry basement on inspection day does not establish year-round conditions. Ask for prior leak and drainage records, compare them with staining and repairs, and have the appropriate professionals decide whether the moisture source has been corrected.

Keep cause and consequence separate. A pest-management professional can identify insect evidence and propose treatment. A carpenter or contractor can define removal and repair. A structural engineer may need to evaluate capacity when damaged members, connections, bearing points, or altered framing are involved. One contractor's treatment estimate should not be used as a structural opinion unless that contractor is qualified and engaged for that work.

Compare treatment proposals line by line

EPA describes several termite-control approaches, including soil-applied products, bait systems, wood treatments, and physical barriers used in construction. The correct method depends on the pest, building, site, label, and professional assessment. Ask each bidder to identify the evidence being addressed, treatment area, product and active ingredient, application method, preparation, occupant restrictions, monitoring schedule, warranty, exclusions, and response if activity returns.

Read the product label and proposed service agreement before authorizing work. EPA says the label explains how the product is used and provides risk information, and that reentry timing varies by product and appears on the label. The applicator should explain preparation, access, ventilation, pets, water sources, wells, drains, occupied areas, and the exact point when people may return. Questions about one product belong with the licensed company and the responsible regulator, not a generic treatment checklist.

Price the work beyond the first application. Include inspection, drilling or trenching, access, monitoring, renewal fees, opening concealed areas, structural and finish repair, cleanup, tenant coordination, and correction of moisture or wood-contact conditions. Do not erase a known cost by assuming the property will appreciate, remain occupied, produce a certain rent, qualify for insurance coverage, or need no further treatment. Those outcomes are not guaranteed.

Verify Michigan credentials before treatment

Michigan's Department of Agriculture and Rural Development says commercial certification is required for people who apply pesticides for commercial purposes and that commercial applicators must pass a core exam plus a category exam that matches the work. MDARD also says commercial and registered applicators hired to apply pesticides must follow business-licensing requirements. Use MDARD's current license and credential search, and ask the company which business license, applicator credential, category, and supervision arrangement apply to the proposed service.

Verify the information close to the work date. The person who inspected the building, the person who signs the proposal, and the person who applies a product may not be the same. Keep the company license information, applicator details, insurance certificate, proposal, label, application record, warranty, and paid invoice in the property file. If structural repairs require permits, ask the enforcing agency which permits and final inspections apply to the exact address and repair scope.

Plan occupied work without steering or shortcuts

For an occupied property, coordinate lawful notice, entry, preparation, temporary restrictions, reentry, ventilation, repair access, and communication with the property manager and Michigan attorney. Give occupants clear written instructions from the product label and service provider. Do not ask a tenant to apply pesticide, move unsafe materials, or decide whether a treated area is ready to occupy.

HUD states that the Fair Housing Act prohibits housing discrimination because of race, color, national origin, religion, sex, familial status, or disability. Use written and consistent procedures for inspection scheduling, treatment, repairs, communication, and accommodation requests. Base decisions on documented property conditions, lease rights, qualified recommendations, and applicable law rather than protected characteristics. Michigan and local protections may also apply.

Keep labor and payment inside the IRA process

Ask the self-directed IRA custodian how inspections, treatment deposits, repair invoices, monitoring fees, warranty renewals, refunds, and insurance proceeds must be approved and paid. Confirm the purchaser name, authorized signer, invoice wording, funding lead time, and change-order procedure. If the seller will treat or repair before closing, the purchase agreement should define the scope, company qualifications, documentation, inspection rights, and response if concealed damage expands the work.

The IRS prohibited-transaction guidance, reviewed June 27, 2026, lists furnishing goods or services between a plan and a disqualified person among prohibited transactions. It also identifies buying property for present or future personal use with IRA funds as a possible IRA prohibited transaction. Do not assume the IRA owner can inspect as a pest professional, apply pesticide, remove wood, perform repairs, supervise personal labor, buy supplies, or pay a vendor and seek reimbursement. Have the custodian, CPA, and attorney review the people, work, contracts, signatures, and money flow before anyone acts.

This article is educational, not legal, tax, financial, pest-management, pesticide-safety, structural, construction, environmental, insurance, fair-housing, retirement-plan, or investment advice. No property, inspection, pesticide, treatment, contractor, ownership structure, or strategy is approved or endorsed by the IRS. Have your own self-directed IRA custodian, CPA, Michigan attorney, qualified pest-management professional, property inspector, structural engineer when needed, licensed contractors, insurer, property manager, enforcing agency, and other advisors review the account, building, occupants, records, proposed work, and payment process before taking action.

Leave closing with a usable pest file

Keep all reports, photographs, diagrams, treatment and repair proposals, licenses and credentials, labels, application records, warranties, invoices, permits, final approvals, custodian instructions, and closing documents together. Mark every inaccessible or concealed area and assign a follow-up date. The next property manager should be able to see what was found, what was done, who performed it, and what monitoring or renewal is due without reconstructing the history from an unlabeled receipt.

Primary sources for the public-rule portions of this review include EPA's Termites: How to Identify and Control Them page, MDARD's Pesticide Applicator Certification and Pesticide Licensing and Certification pages, HUD's Fair Housing Act overview, and the IRS retirement-plan prohibited-transaction guidance. They provide general frameworks. The answer for one building, treatment, repair, occupied property, or IRA transaction comes from current records and the buyer's own qualified professionals.

Rennie can help identify West Michigan property and coordinate the real estate records, specialist access, offer terms, and inspection deadlines needed for this review. Pest identification, treatment design, structural conclusions, pesticide requirements, legal duties, and retirement-account decisions stay with the buyer's own professionals and public authorities.