The BINSR (Buyer's Inspection Notice and Seller's Response) is not supposed to be used to request a price reduction. If the seller offers to reduce the price in lieu of repairs, that's one thing, but the BINSR should only be used to request repairs.
The Arizona Association of Realtors Purchase Contract says the seller has five days after receipt of the BINSR to agree to do all, some or none of the requested repairs. If the seller doesn't respond in five days, or the seller does not agree to do all the requested repairs, the buyer has five days after receipt of the seller's response (or expiration of the seller's five day response time) to decide whether to accept as is or cancel the contract.
The Purchase Contract does not provide an opportunity for the buyer to cancel the contract before the seller either responds within the five day response period or allows five day response period to pass with no response. If the seller agrees to do all requested repairs, the BINSR does not provide the buyer an opportunity to cancel the Purchase Contract.
When you say you accepted the offer as is, I am assuming the AAR As Is Addendum was used. Oddly enough, the As Is Addendum says the buyer retains the rights in Section 6j of the Purchase Contract, i.e., the buyer can ask for repairs. The As Is Addendum only says that the seller is not *obligated* to make any repairs, including repairs to "warranted items": heating, cooling, mechanical, plumbing and electrical systems, pool, spa, free-standing oven/range and built in appliances. Without the As Is Addendum, the seller is obligated to fix the warranted items per Section 5a of the Purchase Contract.
I hope you have a real estate agent representing you. At this point, your agent and the buyer's agent will discuss the options, including release of the buyer's earnest money. If the agents can't resolve this, typically their sales managers get involved.
Best of luck
Tierra Antigua Realty
It would appear that you have three questions.
1. Can the buyer still submit a BINSR and ask for repairs? Answer: Yes. As-is only means you intend to do no repairs. Buyer has not waived their right to ask for repairs.
2. Can buyer demand price reduction? Answer: Emphatic NO!!!!!!!!!!!! BINSR is the form to allow the buyer to either accept house as-is, cancel and get earnest money refunded, or provide the seller an opportunity to correct items. Correcting items is not reducing the price.
This is also not negotiating in good faith.
3. Can buyer turn in a BINSR and then cancel later on? Answer: maybe. As I discuss below, I feel this is a completely invalid BINSR and thus should be treated as if it does not exist. That said, did the cancelation come within the Due Diligence period? If so, they might be eligible to get earnest money refunded. If past the Due Diligence period, then their earnest money might be subject to forfeiture (depending on if there were other contingencies used to cancel) You might have responded to BINSR, thus validating it in which case they would also have a right to cancel if you did not agree to all their terms.
Buyer does not have the right to re-negotiate terms during the Due Diligence period, only to accept, cancel, or ask seller to correct items.
It would appear that this is an invalid BINSR. I had this arise a few years back when I was representing a seller. After receiving the BINSR, I confirmed with my broker and my seller, then contacted the other agent and informed them that the BINSR was invalid. I informed the other agent that after discussions with my seller (who could have accepted and thus validated it), my seller had informed me that they had no intention of responding to an invalid BINSR, but that they were going to allow the buyer and their agent to re-submit a valid BINSR (buyer was still within Due Diligence period).
Buyer's agent refused and insisted it was valid. Seller ignored it. After 5 days, buyers delivered a cancelation due to seller lack of response on BINSR. We argued that their BINSR was invalid, their Due Diligence period expired without them requesting anything, and thus if they canceled at that point, their earnest money would be subject to forfeiture.
Buyer's agent went nuts. It took two weeks for the lawyers at the escrow company to review everything but in the end, they awarded the earnest money to my seller.
Oh, and we put the house back on the market and sold it for more than the other offer.
Bottom line recommendation? Talk to your agent, your agent's broker, and if you still have questions, talk to your attorney.
Matthew Tennyson, CRS, GRI
Certified Residential Specialist
Graduate Realtor Institute
Keller Williams Southern Arizona
(520) 631-0032 (cell phone)
(520) 318-5393 (fax)
The stage for this outcome is set when the buyer submits an offer without seeing the property. Here in FL there are no less than THREE investor groups buying as many 3/2/2 SFH as they can. These folks have multi-BILLION dollar budgets. These three are offering Fair Market VALUE.....without seeing the home. In my personal expereince, the subsequent inspection revealed 'cosmetics' and the sale was SUCCESSFUL! With these groups I have completed multiple sales. No buyer will commit to a purchase without building or exercising an exit strategy.
When the name on the purchase agreement is unknown to me, I assume they will behave in the same manner as the buyer you describe. When encountering such a buyer the seller will present the option of using the inspection report available or waiving the inspection requirement, or completing their due dliegence before submitting a purchase offer.
As the owner and seller, you soon realize the table is tilted to protect and benefit the buyer. The cost to you of removing your home from the market can be significant and have longer term remifications.
This is where the expericince, knowledge and network of the professional you hired become invaluable. However, you do need recongnize the professional you hired knows what they are talking about and choose to follow their directions.
Best of success to you,
Annette Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor, Fl
Another way you can protect yourself is to have a clear idea of what the property is actually worth. Sell to the best buyer, not necessarily the one who runs the price up. Once you accept an offer, you have essentially taken the home off the market and lost your momentum.
Finally, checking out each offer and posting that offers will not be reviewed for 5 days will get several offers and allow them to be compared and evaluated, then put out for best and final offer.
Homes of The Old Pueblo, LLC
A Gift from Sheila
Cell (520) 245-4002
Fax (520) 318-5391
Kat Tyree, Associate Broker
In this case, a BINSR is not intended to adjust the purchase price but rather used as an instrument to advise the seller of the buyers intentions after the inspection period. There are multiple outcomes: the buyer can accept the property and move forward with out requesting repairs or he or she can request repairs and the seller has an opportunity to respond once to this request.
After this, the buyer then decides whether or not to proceed with the transaction based upon the seller response or to can cancel the deal and move forward. On the other hand, the buyer can ATTEMPT to renegotiate the purchase price based upon their discoveries during the inspection period. Often, this is done in leu of repairs. Even though the deal might have been negotiated originally as an AS-IS transaction, it does not mean the buyer can not try to push the sellers hand depending upon the situation.
As a practical matter, though, in many parts of the country the inspection is used to open the door to price reductions. That's especially true for "as is" houses--in which the buyer figures the seller won't correct the problems, can't afford to correct the problems, or simply doesn't want the seller to do so.
Still, it sounds--from Donna's answer--that proper procedures weren't followed.
Check with your Realtor for possible steps you can take.