Do you have a contingency clause in your contract, based on the results of a termite inspection and/or home inspection? If so, then you can either 1) Ask the seller to have the repairs performed (after which you can have it reinspected to ensure the repairs were satisfactory); 2) Offer a lower price for the house, based on you accepting the house as-is and contracting for the repairs to be done; or 3) Walk away from the deal and find another house. To answer some of your questions; A professional should be able to differentiate between different types of damage - termite or ant, fungus, mold, dry rot, etc. If you're not experienced, I wouldn't even attempt the repair yourself. Use the BBB or Angie's List to find someone reputable to repair it if you decide to go ahead with the closing. There is a real possibility that the damage could go deeper; that will only be known once the contractor opens up the wall to make repairs. It's PROBABLY not a scam, because the person who inspected probably doesn't perform repairs - only inspection. They just don't sound like experts. I agree with neal - you can't even get most repairmen to drive over to your house and unload their tools for $150, much less actually perform a repair for that. If you're in love with the house or it is a "steal" price-wise, then you should renegotiate the offer (your real estate agent should be very experienced and helpful in doing this). If you're having second thoughts, then this may be your "out" to walk away from the deal and find a better house. It's very much a buyer's market right now, so unless you've locked yourself into something, don't spend your hard earned money on something that's giving you second thoughts.