DEAR TIM: I know nothing about termites or the damage that they cause. My husband and I have been looking for a home to buy for almost a year. We found the house about a month ago. We were told by the Realtor that there were termites but the owner had treated the house. We have already paid for the appraisal and the home inspection. We were going to close this week.

But the Realtor called my husband on Thursday and told us that the seller was not going to have another termite inspection. We would not agree to this. So the Realtor agreed to pay for the termite inspection out of his pocket. So Friday we had our final walk through and my husband and a friend went under the house and found that approximately 24 feet of the face plate, the floor joist, and something else were just dust.

We do not have the money to invest in the repair. We have already paid almost a $1,000.00 that we may lose. Is this something that the seller should fix? And if they fix it will the home be just as good as before the damage, or should we just call it a bad experience and go on looking for another home to buy? And should our home inspector have seen this damage? Misty Dunfee

DEAR MISTY: Your home inspector blew it. I would call him and ask for the name of his insurance carrier. Or did you get this information before you hired him? If he has a good policy, the insurance policy may pay for the repair and all will be well and good.

If you don't mind I would like to take a moment and sort of say I Told You So; if you would have read a column at my website about the home buying process and who the *best* inspectors are, you might not be in this predicament.

But that aside, you may have some negotiating power. Aside from being a home builder, I am also a licensed real estate broker. If you are lucky, your state laws may be such that you now have a leverage tool. Most states have property disclosure laws.

Now that the damage has been brought to the attention of the owner, he MUST disclose it to all future potential buyers. If he doesn't and a buyer finds out after a sale that the owner knew of the defect, the owner is subject to painful legal expenses, plus the cost of repairing the property.

To get the wheels in motion with respect to making this new termite damage work in your favor, write the owner a letter as well as any listing real estate broker. Send the letters certified mail and note in the letters that a paper trail of the defect has now been created. That letter, once received, will get some attention.

So now that he knows of the defect, this means he is going to have to fix it or lower the price of the house by the cost of the repair. Any savvy real estate agent who is working on behalf of the buyer's interest knows this and should be working this angle to get the house for the lowest price possible.

But the problem is more complex. Is there even more damage than what you have discovered? If so, then this may not be a great buy and you might want to think of the $1,000 as a tuition payment to the College of Hard Knocks. It may be smarter in the long run to move on and find a house that is in better condition.