Final answer:
The buyer is usually responsible for termite damage discovered after escrow closes unless the seller failed to disclose known issues, with specifics depending on local laws and the contract. Pre-closing home inspections help avoid such situations.
Step-by-step explanation:
Discovering termite damage after the close of escrow is a challenging situation. Generally, the responsibility for repairs or issues that are discovered after the close of escrow falls on the buyer unless otherwise specified in the purchase agreement or unless the seller failed to disclose known issues as required by law. It is crucial to have a thorough home inspection conducted prior to closing to prevent such surprises. In the event that the damage was truly unknown to all parties, and there was no intentional nondisclosure, the buyer typically bears the cost of repair. However, the specifics can vary based on local laws and the contract terms agreed upon by the buyer and seller. As part of the escrow process, insurance and tax payments are managed through monthly payments, but this does not cover post-sale discoveries such as termite damage, which are separate from ongoing homeowner's expenses.