BINSR – Buyer Inspection Notice

BINSR … referred to as the “bin-zer”

Buyer Inspection Notice and Seller Response  … these simple-appearing three pages are the basis for the most complex process involved in an Arizona residential real estate transaction, and are nearly as important as the purchase contract.

You should click the link and print the document, or have the PDF open in another window, so you have it to refer to as you read the following discussion.

The BINSR is a form … the design of which is very carefully tailored to follow the notice process outlined in Purchase Contract sections 6i and 6j that is used:

  1. by the buyer to give written notice to the seller of the buyer’s decision regarding the physical condition of the property;
  2. then by the seller to respond to the buyer’s notice;
  3. and finally by the buyer to accept the seller’s response, or cancel the transaction.

Inspection – Basis for Decisions

A professional inspection is not mandatory but of great benefit and peace of mind for the buyer and well worth the typical expense. Specialized inspection is likely also a good idea for some property aspects – like septic systems. The inspection report is also a very objective basis for repair/replace demands the buyer may make. Some great info regarding inspections … Arizona Home Buying Inspections … Home Purchase Inspections – Vital – Tricky

No “Overs”

Note on page 1 of the BINSR in the section … Buyer Acknowledges that:  the following item  … (d) Buyer is not entitled to change or modify Buyer’s election after this notice is delivered to Seller. Section 6i of the Purchase Contract includes “…  all Inspection Period items disapproved shall be provided in a single notice. In other words … “no-overs” … for both buyer and seller.

Step 1 – Buyer notice to Seller

With the day of “Acceptance”, which is the date of the last signature on the last-signed document in the Purchase Agreement documents, being day-zero, the buyer has ten days within which to deliver the BINSR to the seller, or possibly some other number of days as written into Section 6a of the Purchase Contract.

Buyer Notice – Accept, Cancel, Fix-it

The decision of the buyer regarding the condition of the property is contained in the BINSR section “Buyer elects as follows:“.

If  “Premises Accepted” is checked, all physical inspection provisions of the contract are done.

If  “Premises Rejected” is checked, the transaction is done … cancelled … caput. In the open section below, the buyer lists the “Items Disapproved:” … which need NOT be truly significant, except to the buyer … BUT … there must be a list of items disapproved, else the buyer could lose his/her earnest money deposit.

If  “Buyer elects to provide Seller an opportunity to correct …” is check, which occurs by far the most, this is where the complications begin.

In the open section of the BINSR just below this option, the buyer lists the items to be repaired, replaced, or otherwise changed from the current condition … this is the “fix-it” list.

Buyer signs for these demands on page 2 of the of the BINSR just above the “Waiver” section.

If the open space on pages 1 and 2 of the BINSR is not big enough for the fix-it list, a “BINSR Addendum” can be referenced to here for which there would be no limit to the length of the list.

Licensed Contractor Specification – NOT Valid

Very commonly, buyer agents include words similar to the following for disapproved items … “… work to be preformed by a licensed contractor.” The Purchase Contract specifies otherwise. Section 6j(2)(b) specifies ” … complete any repairs in a workmanlike manner …”. AZ law requires the work be perform by a licensed contractor only if cost of repair of the item is more than $1,000. For such items, the seller’s agent can respond … “Repairs will be completed consistent with PC section 6j(2)(b) and Arizona law.” If the buyer subsequently cancels citing only this as the exception, he/she is likely to lose the earnest deposit.

Step 2 – Seller Response – OK to All, No to All, Yes and No

The seller has five days to respond if the buyer checks the third box and provides the seller …  an opportunity to correct, as provided by Section 6j(2)a of the Purchase Contract, with the date of delivery of the buyer’s BINSR notice being day-zero.

As also provided in this Purchase Contract section, no response by the seller is effectively a refusal to correct any of the disapproved items … same as checking the box for “Seller is Unwilling …” that is discussed just below.

If “Seller agrees to correct …” is checked, all inspection issues are over, except only for the Buyer-Pre-Closing-Walkthrough where the buyer confirms that the corrections were all satisfactorily completed.

If “Seller is unwilling …” is checked, the buyer has a decision to make … to either cancel the transaction or to accept the property as-is … or … see Converting “Cancel” to “Accept” below.

If “Seller’s response to Buyer’s notice is as follows:” is checked, there will be a list and/or explanation in the open space on the form. For example, the seller may say that an item is working and no fix is required, i.e., the inspector made a mistake; or specify items the seller is going to fix verses items not to be fixed; or not fix one or more items in the way specified by the buyer. The response possibilities are limitless.

Step 3 – Buyer Response to Seller Response – Accept or Cancel

The buyer has the contractual right to Accept or Cancel based on each “fix-it” item the seller took exception to.

Which bring us to the BUYER’S ELECTION at the bottom of page 3 of the BINSR. With the day of delivery of the seller’s response to the buyer being day-zero, the Buyer has five days to decide which of the two options to take …

Accept or Cancel.
There is no middle-ground here.

Until the BINSR process is successfully completed, the transaction is very much “out on a limb”.

Converting “Cancel” to “Accept”

All of the “conversion” activities discussed following
must be completed within the five-day buyer response window.

For the majority of transactions, neither the buyer nor the seller want the transaction cancelled over “fixable” condition issues. Even so, commonly, the buyer will list many, oftentimes all (very irritating where several very minor issues are included) of the inspection report items to be corrected, fully expecting the seller to say “No!” to some.

The seller may not be able to correct the item(s) for some reason, or may not want to take the time for the correction(s) prior to the scheduled closing, or may feel that “as-is” the property is worth the contract price and no “fix-it” is justified.

Solution A:  When the seller is concerned about “Will the buyer cancel if I say no to some/all of the issues?”, the best approach is to have a verbal negotiation of the list commenced by the seller’s agent prior to doing anything with the BINSR. For many transactions, this will result in the seller’s BINSR response being acceptable to the buyer.

Solution B:  When one or more of the submitted seller’s responses is not acceptable to the buyer, the only solution, other than to cancel the transaction, is a price reduction. The buyer’s agent would commence this negotiation.

Remember … there are no “overs”
… the buyer can’t change the fix-it list
… the seller can’t change his/her response once delivered to the buyer.

When he seller’s response is not acceptable, if buyer and seller can arrive at an agreeable price reduction as an alternative to cancellation, the next step is to execute an addendum to adjust the price. After the addendum reducing the price has been fully executed, the buyer can then “Accept” the seller’s BINSR response.

That Addendum is submitted to escrow prior to closing, most commonly by the agent for the buyer.


Of course, some “fix-it” issues may not be fixable as far as the buyer is concerned, or the seller’s BINSR response is not acceptable and agreement can’t be reached for a price adjustment. In either case, the buyer checks the cancel box at the bottom of page 3, then sends the BINSR to the seller and to escrow.

This immediately cancels the transaction. If done timely, the buyer gets full refund of his/her earnest money.

Cancel notice to seller by buyer must be done within the five-day window else the Purchase Contract specifies no notice or untimely notice is equivalent to “Accept” by the buyer.

Buyer Waiver of Inspections – Extremely Rare

Very rarely, a buyer may choose to not perform any inspections or submit any sort of “fix-it” list by signing under “BUYER’S WAIVER OF INSPECTIONS” at the bottom of page 2 of the BINSR, leaving all items on page 1 blank, and delivering that BINSR to the seller. This entirely circumvents the inspection process.

Lender Disapproval

The mortgage lender may disapprove the loan based on inspection items, or the fix-it agreed-to by buyer and seller. The buyer should review any serious inspection item with his/her lender prior to preparation of the initial BINSR notice.

SPDS (“spuds”) Connection to BINSR & Inspection

The SPDS has, by far, the most long-term liability for the seller … more so even than the Purchase Contract. A buyer can sue the seller years after the purchase if there was misrepresentation of a material issue on the SPDS … intentional or unintentional. The seller should fill out the SPDS carefully.

SPDS – Seller Property Disclosure Statement  This is the form the seller uses to give written disclosure to the buyer of what the seller knows about all aspects of the property. The Purchase Contract requires that this document be delivered to the buyer within three (3) days of “Acceptance”, defined above.

Very important:  The buyer should provide a copy of the SPDS to the physical inspector prior to the inspection to identify any items that should be given special attention.

Click here for a full discussion of the SPDS

Buyer Advisory

Buyer Advisory … if you are considering buying or selling AZ real estate, whether you’ve done 27 transactions or none, this is a document you need to study … not just read … study. The guidance and  information in this succinct-but-comprehensive, well-written document is essential to fully successful real estate results.


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Other Arizona Home Buying Issues

* Buyer Advisory - Priceless - FREE
* TNT Home Buyer Services
* AZ Rentals Buying
* Your Home as an Investment
* Buyer Inspections
* BINSR - Buyer Inspection Notice
* Crafting Your Offer
* Down Pay - FREE MONEY
* AZ Home Loans 101
* How Loan-type Impacts Your Offer
* Home Buying Secrets
* Secrets - New Homes
* Buying Myths
* Top 10 Costly Buyer Mistakes

* First-time Buyer - Guide
* Overall Buying Process
* Buying Step-by-Step
* Buying - Major "Do!"
* --- Major "Do Not!"
* Buying a REO/Short-Sale

* Contents

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