Buyers Inspection Period

The inspection period is a negotiated time frame in which buyers have the opportunity to conduct their due-diligence on the property. The purpose is to give the buyers a “free look,” so to speak. If the buyers don’t like what they see, they can re-negotiate the terms of the contract, or cancel the contract altogether and have their earnest money returned without penalty.

Length of the Inspection Period

First, it should be emphasized that not all real estate contracts call for an inspection period. As a buyer you have to ask for it in your offer. In Arizona, the Arizona Association of Realtors’ (AAR) standard residential contract calls for a ten day inspection unless otherwise specified.

To Inspect or Not

Home buyers are often conflicted about whether or not to spend the money to hire a home inspector. The responsible answer to this question is… yes, absolutely. Let me say this about cost; the price of an inspection is generally $250.00 – $400.00. Compare that to the price of the house and I would suggest that it becomes fairly insignificant.

A good home inspector will bring to your attention everything that is wrong with the house so you can handle it accordingly.

There are many protections for buyers in the “Residential Resale Purchase Contract” of the Arizona Association of Realtors, referred to here as the contract. The goal is to give buyers the opportunity to thoroughly inspect and investigate the property before being “locked in” to the purchase.

The Arizona Association of Realtors has a comprehensive list of items you may want to inspect or investigate during the inspection period.


It is very easy for you, the Buyer, to cancel a contract during the inspection period and receive a full refund of your earnest money, if you find anything at all that you don’t like about the house – its condition, the neighborhood, the roads, the schools or just about anything related to the home and the surrounding area.

The inspection period is by far the most likely time a contract will be canceled or “fall out of escrow.”

Home Inspectors

I recommend as strongly as I can that you hire a licensed home inspector (typically $300 to $400) to inspect the physical condition of the home. The inspector will give you a report, with pictures, that will detail just about every little thing wrong with the home.

I recommend that you try to meet the inspector at the end of the inspection so the you can go over his findings with him in person. It is much easier to understand a problem after the home inspector has personally shown it to you.

Scheduling Home Inspection

I also recommend that you call the home inspection company within 24 hours of having reached agreement with the seller. The home inspection company may not be able to schedule your home inspection right away.

You want the inspection done as early as possible in case the home inspector recommends further inspections. For example, if the home inspector recommends a full roof inspection, you want to be able to schedule a roofer before the end of the 10-day inspection period.

Inspection Report

Okay, you just received the detailed report from the home inspector, now what?

If you don’t like what the inspector found or what you found in your own investigations of the house and the surrounding area, you can simply cancel the contract and receive a full refund of your earnest money. You will be out, of course, the cost of the home inspection.

Buyer’s Inspection Notice

It’s more likely that you will ask the seller to make some repairs.

First, you will have to decide what, if anything, from the inspection report you will ask the seller to repair. Your Realtor will prepare the “Buyer’s Inspection Notice” which buyers often call the “request for repairs.” This request for repairs has to occur within the 10-day inspection period and can only occur once.

If you don’t ask for any repairs within the 10-day inspection period, you have agreed to buy the home as is.

Seller’s Response

After your Realtor sends your request for repairs to the seller, the seller has 5 days to respond to you.

If the Seller agrees to make all the repairs you requested, the inspection period is over and you are locked into the contract, subject to any outstanding contingencies.

If the Seller agrees to make some of the repairs but not all of the repairs you requested, you will have 5 days to decide whether you want to take it or leave it.

If you decide to “leave it,” you can cancel the contract and receive back your full earnest money deposit.

If you decide to “take it,” the seller is obligated to make the agreed upon repairs by at least 3 days before close of escrow.

End of Inspection Period

After you and the Seller come to an agreement on repairs, the inspection process is over and you are now locked into the contract, subject to any remaining contingencies in the contract.

Seller Property Disclosure Statement

The AAR Purchase Contract includes a provision that says the seller will give the buyer, within 5 days of contract acceptance, a “Seller Property Disclosure Statement.”

The SPDS (“spuds”) can give you a lot of extra information to consider during the inspection period. Sellers sometimes only fill out part of the form if that don’t have all the information requested.

If you don’t like something in the SPDS, you can cancel the contract (within 5 days of your receipt of the SPDS) and receive a full refund of your earnest money.

Insurance Claims History

The Seller will also give the Buyer within 5 days of contract acceptance, a 5-year insurance claims history on the home.

Here’s how seeing the insurance claims history helps you.

Let’s say a Seller “accidentally” forgets to mention in the Seller Property Disclosure Statement that he had a roof leak in 2005. You will still find out about the roof leak from the insurance claims history report, if the Seller made an insurance claim for the damages from the roof leak.

If you don’t like something in the Insurance Claims History, you can cancel the contract (within 5 days of your receipt of the Insurance Claims History) and receive a full refund of your earnest money.

By the way, as always your Realtor is your representative and the 5 day clock starts ticking when your Realtor receives the Insurance Claims History. When a document is delivered to your Realtor, it is considered to by delivered to you.

Few other States include the insurance claims history requirement on their purchase contracts.


After the inspection period, the odds of a transaction closing successfully are very high. If you are borrowing money to purchase the home and using the AAR contract, your offer is contingent upon the home appraising for at least the sales price. After the inspection period if ended, your lender will order an appraisal and charge you it in advance (typically $300 to $400). This fee is in addition to any other fees you pay your lender.


Your Realtor will arrange for you to “walk though” the home a day or two before closing so you can verify that the agreed upon repairs have been completed and that no damage has occurred to the home since the date the contract was accepted.