Whether buying or selling a home the inspection period and the Residential Buyer’s Inspection Notice and Seller’s Response (“Buyer’s Inspection Notice” or BNSR) often creates lots of confusion.
The “Buyer’s Inspection Notice” is a 1 to 3 Step Process both buyers and sellers really need to think through before responding.
It is important to understand the inspection period process especially as the seller so you don’t slip on the banana and kill a deal over small stuff.
A questions often asked by both the buyer or the seller is…
Q: Can the buyer cancel the contract during the inspection period?
A: The quick answer is YES, but there are more options for both the buyer and seller.
The Inspection Period Per the Purchase Contract Protects Home Buyers
The Inspection Period gives the Arizona home buyer the opportunity to inspect a home thoroughly.
On the other hand, the Inspection Period is one of the most complex parts of buying a home in Arizona. Mismanaging the inspection period can be disastrous. Meeting all the deadlines in the contract is critical.
Per the Arizona Residential Resale Real Estate Purchase Contract the buyer has a certain amount of days to inspect the home agreed upon per the purchase contract. The standard is a 10 day inspection per the contract but can be negotiated to meet the buyers needs.
Line 191 below of the Arizona Residential Resale Real Estate Purchase Contract is where the number of days for the inspection period is specified.
Step 1: Buyer’s Inspection Notice
During inspection period per the Arizona BNSR the buyer can:
- Accept the home “AS IS” with no corrections
- Reject the premises and cancel the contract
- Give the seller the opportunity to correct
- Do nothing, which means you, the buyer, accepts the home “AS IS”. Don’t do this!
If the buyer wants to cancel the contract or request repairs the buyer will submit the Residential Buyer’s Inspection Notice and Seller’s Response (“Buyer’s Inspection Notice” or BNSR) form to notify the seller of the buyer’s requested for the seller to do repairs.
Below is an example of the section of what options the buyer has when submitting the “Buyer’s Inspection Notice” to the seller.
The “Buyer’s Inspection Notice” must be delivered to the seller within the Inspection Period which is usually ten (10) days from the time the final counter offer was signed by the buyer and seller.
Once the seller receives the “Buyer’s Inspection Notice” with the sellers requested repairs, the seller then has five (5) days to respond.
DON’T DO THIS
Keep in mind, if you are the buyer and you do nothing and DO NOT submit the “Buyer’s Inspection Notice” back to the seller within the specified time frame you are agreeing to buy the home in “AS IS” condition with NO repairs by the seller.
Step 2: Seller’s Response
The seller can:
- Agree to make all requested repairs.
- Agree to make some requested repairs.
- Refuse to make any repairs at all.
Below is an example of the section of what options the seller has when submitting the “Buyer’s Inspection Notice” back to the buyer.
If the seller DOES NOT agree to make ALL repairs requested by the buyer, the buyer can cancel the contract.
SELLER GETS ONE BITE OF THE APPLE
Many sellers think the repairs the buyer is asking for is a back and forth negotiation until things are agreed upon. As the seller, you only get One Bite Of The Apple!
As the seller, if you don’t agree to the repairs, the buyer can walk from the deal.
I have seen sellers not think rationally and not agree to repairs that are minimal in cost only to have the buyer walk away from the deal.
As the seller, you have to think rationally and ask yourself…
Is not doing the repairs worth killing the deal?
Step 3: Buyer’s Election
The buyer can:
- Agree to move forward with the purchase of the home with only the repairs the seller agreed to make.
- Cancel the contract altogether. This must be done within five (5) days of you receiving the “Seller’s Response”.
Below is an example of the section of what options the buyer has when submitting the “Buyer’s Inspection Notice” back to the seller.
As you can see the process of the “Buyer’s Inspection Notice” can be tricky and one both the buyer and seller really need to think about so a deal is not killed over small stuff.
The biggest points to take from the “Buyer’s Inspection Notice” are:
- BUYER CAN CANCEL THE CONTRACT DURING THE INSPECTION PERIOD.
- IF THE SELLER DOES NOT AGREE TO ALL THE REPAIRS REQUESTED BY THE BUYER, THE BUYER CAN WALK FROM THE DEAL!.
Tags: home inspection