Misuse of Arizona Buyer’s Inspection Notice

MORTGAGE11As a licensed Realtor in Arizona I have come across many real estate agents who to not understand the use of the “Buyer’s Inspection Notice & Seller’s Response”.  This is not an Addendum or a Disclosure but a notice that allow the buyer who is under contract to purchase a home to list items that are not working, that need repair or show disapproval of those items to the Seller.  In turn this is the notice that the Seller will respond back to the Buyer on also.

Buyer’s Inspection Notice and Seller’s Response

In essence after the buyer inspects the premises fully or has a qualified and license home inspector perform an inspection the Buyer uses this notice to inform the Seller of Non-Working items, Disapproved Items, or Repairs that need to be addressed by the Seller.  Much of these items will be noted on the home inspectors official report to the Buyer and a copy should be forwarded to the Seller by the Home Inspector.

The Seller is given opportunity to state whether he or she will remedy any of the items identified on the BINSR – “Buyer’s Inspection Notice and Seller’s Response”.  The Seller may elect to replace, repair, and/or adjust all of the identified deficiency items shown on the notice, or only will address certain items and not others, or to refuse to address any of the items shown.   After this event or response to the BINSR the Buyer may elect to purchase the property with the items being replaced, repaired, and/or adjusted or accept only the items identified to be replaced, repaired, and/or adjusted, or to accept the property with “No” replacements, repairs, and/or adjustments of the items shown by the Buyer.  The Buyer can elect to cancel the contract and receive his earnest money from the Title Company and the contract at that time will be voided by the terms and conditions of the contract unless other terms and conditions have been agreed upon in the purchase contract.

The is the normal procedure in the Arizona Purchase Contract that is widely used in the Real Estate Community in Arizona.  The fact that this only a notice to the Buyer and Seller of what items that are not working or items that have been disapproved or items that will need to be adjusted by the Buyer.  This is the same notice where the Seller can respond to his or her intent to replace, repair, and/or adjust those items to the satisfaction of the Buyer or that he or she will not be replacing, repairing, and/or adjusting any of the item or only a few of the items.

The BINSR “Buyer’s Inspection Notice and Seller’s Response” is not an instrument for altering or changing the terms and conditions of a contract once it is agreed to by both parties.  The instrument for that is an addendum signed by both parties to alter and/or change the terms and conditions of the contract.

Misuse of the BINSR in the Purchase Contract

Often I see Real Estate agents using the BINSR to make agreements to attempt to change the terms and conditions of the contract which is very problematic in the eyes of the Brokers and possibly Attorneys.  The Buyer’s agent will suggest in the BINSR that the Buyer will accept the deficient items if the Seller will reduce the price of the property by a set amount instead of making such replacements, repairs, and/or adjustments.  This is an invalid agreement and a misuse of the BINSR notice as the BINSR can not change the terms and conditions of a contract and that is where the Addendum is the proper instrument to change the term and conditions of the contract.  Their is specific language in the contract that states this implicitly to both parties of the contract.

iStock_000004266807XSmallIt is the agents and subsequently the Brokers who should remind the Buyers and Seller of the proper use of each of these documents in the contract.  If you are a Buyer or Seller and your agent suggest this can be accomplished in the BINSR notice remind him that this is improper contract procedure to change the terms and conditions without the use of an Addendum to the Contract.  Hopefully the agents and their Brokers can remind the clients that a BINSR is only a notice and is not an Addendum to the Contract.

If you have any questions or comments on this post please forward your comments to me in the form provided below.

If you have any Real Estate needs or would like to discuss representation of a real estate transaction Call me at 623 428 9490 or Email DSeargent@Cox.net

Drew Seargent, Realtor

RE/MAX Professionals – Arrowhead South Office

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