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On October 1st, the Arizona REALTORS® will release a revised Residential Resale Real Estate Purchase Contract (Purchase Contract) and Residential Buyer’s Inspection Notice and Seller’s Response (BINSR).


Last year the BINSR Workgroup[1], chaired by Tahona Epperson, prepared a revised draft of the BINSR to be considered for future release.  Upon receipt of the Loop comments, the Workgroup determined that limited changes to the Purchase Contract would need to occur to effectuate changes to the BINSR.

The workgroup ultimately decided to minimally change the Purchase Contract and the BINSR by making the verbiage in the forms broader so that the parties can choose how they would like to take care of disapproved items. 

Purchase Contract revisions:

Sections 5a and 6j of the Purchase Contract now include the words “or address” in those portions of the Purchase Contract that discuss whether seller is given the opportunity, is willing, or not willing to correct items disapproved.   In other words, the parties may now “correct or address” disapproved items in whatever manner they choose. 

See redlined Purchase Contract here.

BINSR revisions:

In addition to the broader verbiage inserted into the Purchase Contract which allows for the parties to “correct or address” disapproved items, the BINSR now instructs the parties to utilize an addendum to address disapproved items, if applicable.  The revised BINSR also contains a new Buyer and Seller acknowledgment which cites Arizona law and states the requirement to utilize a licensed contractor to perform any agreed upon corrections when (i) the aggregate contract price, including labor and materials, is $1,000 or greater; (ii) the work to be performed is not of a casual or minor nature; or (iii) the work to be performed requires a local building permit. Finally, the revised BINSR advises the buyer that “if the Seller agrees to address the items disapproved by monetary credit or change in Purchase Price, an addendum must be submitted to Buyer’s lender, who may limit or restrict total contractual credits.”

See redlined BINSR here.

To better comprehend the revised forms and understand why changes were made, please see the frequently asked questions.


Q1.  Why is the word “address” used?

A1. The word “address” was chosen by the Workgroup because it gives the broadest scope for buyers and sellers to agree on how to deal with disapproved items.

Q2. How does this broader scope affect the contract?

A2. With the addition of the new broader verbiage, the parties are not contractually limited to solely negotiating repairs and/or corrections to the disapproved items. 

Q3. Does the new broader Purchase Contract verbiage and BINSR revisions change the way buyers and sellers currently use the BINSR?

A3. No. The new broader verbiage contractually provides the parties with more options to negotiate how to “correct or address” disapproved items. To ensure you are properly using the BINSR, see the Back to BINSR Basics article.

Q4. How else can the parties “address” disapproved items?

A4. If neither party wishes to enter into negotiations for repairs and/or correct disapproved items, the parties could opt to negotiate a credit or price reduction via an addendum.  If the parties negotiate via an addendum, the parties should be mindful of the contractual deadlines provided for in section 6j of the Purchase Contract.

Q5. What if the parties wish to negotiate for repairs and/or corrections and a credit or price reduction?

A5. The buyer should still identify and list those items the buyer disapproves of along with the request for repairs and/or corrections on the BINSR and attach an addendum requesting a credit or price reduction.

Q6. What if the buyer only wishes to negotiate a credit or price reduction?

A6. The buyer should still list in the BINSR any items the buyer disapproves of and attach an addendum requesting a credit or price reduction. 

Q7. Why must an addendum be used?

A7. The BINSR is a notice document which the buyer may use to give the seller notice regarding those items the buyer disapproves of.  The BINSR is not an addendum and should not be used to modify the terms of the Purchase Contract. As such, the revised BINSR now includes verbiage reminding the parties to utilize an addendum, if applicable.

Q8. When using an addendum to request a credit or price reduction, should the addendum say “in lieu of repairs, buyer requests $5,000?

A8. No.  The addendum should simply state “Seller to credit Buyer $5,000 in closing costs” or “Purchase Price is $X.”

Q9. Are there other ways the parties might choose to “address” the disapproved items rather than a repair or credit or price reduction?

A9. Yes. For example, the parties could extend close of escrow, offer to pay additional months of HOA fees, or pay down points on the buyer’s interest rate. 

Q10. Why is the new acknowledgement for buyer and seller included in the BINSR?

A10. The workgroup felt it was important to include this language so that buyers and sellers are aware that if the parties negotiate and agree to repairs, Arizona law requires the use of a licensed contractor when (i) the aggregate contract price, including labor and materials, is $1,000 or greater; (ii) the work to be performed is not of a casual or minor nature; or (iii) the work to be performed requires a local building permit.

Q11. There are other exemptions for when a homeowner can perform work on their property, why aren’t these included?

A11. The Arizona law that was inserted into the buyer and seller acknowledgement is specific to the part of the transaction in which the buyer is requesting repairs and the seller is deciding whether or not to complete the buyer’s requested repairs.  Therefore, the only statutory information included in the BINSR is the information applicable to the transaction at that time.

Q12. Does including the licensed contractor statute replace “workmanlike manner”?

A12. No. The acknowledgement specifically identifies that work must be performed in a workmanlike manner.  However, should the agreed upon corrections/repairs meet any of the statutory requirements, Arizona law requires that the work must be performed by a licensed contractor.

Q13. Are agents supposed to explain the licensed contractor statutes to the buyer and seller?

A13. No. Agents should not attempt to practice law.  The law is cited for the buyer and seller to reference, if necessary.

Q14. Do agents have to enforce whether a licensed contractor is used to perform repairs and/or corrections?

A14. No. Agents duties do not include enforcing the law.

Q15. Why was new verbiage in the buyer’s acknowledgement added above the buyer’s signature on page 2?

A15. The new verbiage was added because if the parties negotiate a monetary credit or change in Purchase Price, the buyer should be aware that their lender may limit or restrict the total contractual credits.  In other words, even if a seller agrees to give the buyer a credit, if the buyer is financing their purchase of the property, the buyer may want to contact their lender to confirm the buyer can receive the negotiated credit because a lending program may only allow for a buyer to receive a certain amount of credit.  Additionally, any time contractual terms are modified, the lender must be notified, along with the escrow company.

Q16. Why does the Seller’s Response allow for a seller to attach an addendum?

A16. Suppose the buyer requests repairs and does not request a credit or price reduction but the seller does not want to perform any repairs. Instead of declining to perform any repairs, the seller could respond with an addendum offering the buyer something else instead of performing repairs.  Alternatively, the seller may decline to sign an addendum submitted by the buyer and may instead wish to offer different terms.

Q17. What if the Purchase Contract dated February 2020 has been used in the transaction?

A17. The BINSR dated June 2020 will be left in the Arizona REALTORS library for 30 days for members to use for transactions which were initiated using the Purchase Contract dated February 2020. A notice will be attached to the “old BINSR” instructing the member to only use it if the Purchase Contracted dated February 2020 was used.

[1] Special thanks to the workgroup members who spent a significant amount of time working on the revisions to these forms. The workgroup members assisting Tahona were Martha Appel, John Mijac, James Adams, Diana Bingham, Hydie Edwards, Wednesday Enriquez, Tiffany Jones, Cathy Swann, Deborah Yost, and Annie Barmore, along with the Arizona REALTORS® staff members Michelle Lind, Nikki Salgat, Jan Steward and Jamilla Brandt.