When someone buys a home, if the buyer is financing the purchase the lender will require a termite clearance for the home. If a home needs to have work done to obtain the clearance then the market conditions generally will dictate who pays for that. It is all spelled out in the purchase agreement. It is not a bad idea for people selling their home to obtain a clean bill of health from a pest control agency prior to listing the house on the market. In general it is only one of many contingencies so I do not see it closing sales any quicker. The long pull (more often then not) is the loan contingency.
The only difference w/ respect to REO is that pretty much any lender states out front that they are not going to pay for any remediation or treatment due to termites. So in order to obtain the clearance, the buyer has to pay for it.
