Got Questions? Due Diligence and Inspections in Arizona Real Estate

AvatarI tried in vain to come up with a punchier title and failed. Due diligence and inspection periods aren’t juicy material but they’re vitally important when purchasing real estate in Phoenix or elsewhere.

Arizona’s residential real estate contract allows buyers 10 days, beginning the day after the final signature had been added to the contract, to complete all of their due diligence. This nearly always includes a home inspection and termite inspection but also can include other inspections: mold, sewer, roof, stucco, pool … just to name a few.

Not all are necessary. Mold inspections, for example, rarely are needed unless there is some evidence of past moisture. Mold needs moisture and that’s one thing the Phoenix area generally lacks. Sewer inspections also only are needed if there’s a concern that a home may not really be connected to a city sewer system.

Concerned the square footage may be different than what’s listed in the tax records or on the MLS printout? Hire an expert to come walk the property and see. Have questions about the schools in the area? If you haven’t already done the research, the inspection period is the time to do so.

In many ways, the 10-day inspection period provides buyers a free look at the home while simultaneously taking it off the market. It’s almost akin to an extended test drive with a car dealership … no one’s buying that car while you’re testing it out.

At the end of the 10-day inspection period, the buyer has three options – to accept the home as is, to cancel the contract or to request repairs. The buyer needs to submit their choice, usually on the Buyer Inspection Notice Seller Response form, to the seller by the end of the 10th day.

This isn’t to say the buyer has to wait the full 10 days. The buyer can submit a BINSR form to the seller whenever they choose. But there’s a catch – once the form has been submitted, the inspection period has ended and the buyer loses the ability to cancel based on items uncovered during further due diligence.

For example, if the BINSR is submitted to the seller four days after contract acceptance and on day six the buyer discovers the school district moved its boundaries and their kids would be attending a different school – too late. The one-time free pass to cancel was given away on day four.

How long to wait before submitting a BINSR to a seller depends on circumstances – it may be worth submitting sooner on a shorter close, for example. But as a rule of thumb, make sure you’ve completed ALL of your due diligence before submitting the form lest you find yourself unable to escape an escrow with your earnest deposit intact.

[tags]real estate negotiating, real estate inspections, Arizona residential real estate contract[/tags]

Jonathan Dalton

Jonathan Dalton is a 40-plus-year resident of the Valley and has been helping folks buy and sell homes since 2004. He can be reached at 602-502-9693 or info at