Oro Valley First Time Home Buyers - Choosing a Real Estate Agent - Contracts Made Easy : the Weasel Clause (and why you want it)

Oro Valley First Time Home Buyers - What’s a Weasel Clause and why do you want it?

Back in the day, let’s go back to the 70s, contingencies written into a property contract were called a “weasel clause.”

What does this mean?

Simply that prospective homeowners could cancel a contract (weasel out) -- without penalty paid to the seller and there was no risk to the buyer.

While not great for seller, buyers can use them to their advantage in AZ.

Here are types of contingencies you can expect in Arizona:

Common Purchase Contract Contingencies for Home Buyers


Loan Contingency.


Even with a pre-approval letter, sometimes the loan is denied and the buyer cannot complete the purchase.

Some loan contingencies have buyers and seller biting their nails about whether approval will come through (all the way up to the closing), and other types might exist for a few weeks.

Most real estate sales contracts contain a contingency clause that permits the buyer to cancel the purchase if the loan is not approved by the lender.

Be aware that the lender could reject the loan for a number of reasons, including uncovering a title defect or receiving a low appraisal.


Loan Appraisal.


Your lender will generally hire an independent appraiser to inspect and determine the value of the home.

If, however, the appraiser comes up with an appraisal value that is below the sale price of the house, then the mortgage lender could refuse to give the loan.

Including a specific appraisal contingency provision which would allow the buyer and seller to adjust the purchase price to match the appraisal so that the purchase can be completed would help ensure the transaction is completed.


Home Inspection.


This one is the usual suspect when finalizing the deal.

A key (and highly recommended) contingency clauses involves the right to perform an inspection by a professional.

Upon inspection by an inspection professional, defects could be found. These could include minor things like broken switches or blinds that don’t function properly. Easy fixes. However, they can also include pricey problems like roofing repairs or replacements and plumbing issues.

This is where the buyer and seller can re-enter the bargaining process determining who will fix such issues and if any money will be given. Sometimes this where a breakdown in the deal can occur, but usually a compromise can be met.

In complex terms: If the inspection reveals defects, the Buyer uses the Buyer’s Inspection Notice and Seller’s Response (BINSR) to request and negotiate repairs to the property. 

The BINSR is an addendum to the Arizona Association of Realtors Residential Purchase Contract that allows, in an organized manner, the buyer to request repairs and the seller to respond.

If the inspection reveals defects, buyers may walk away – or elect to ask the seller for repair work, closing credits, or a reduction in the sale price due to flaws that were uncovered.

Sellers have a set period (5 days is common) to respond one of three ways: 1) agree to all of the buyer’s requests, 2) offer a modified solution back to the buyer, or 3) decline to make any amends. In response, the buyer can continue to negotiate, accept the seller’s position, or end the transaction within a set number of days (also 5 days, commonly).

If the buyer declines the seller’s solution within the time period, they are free to end the transaction and recoup their earnest money. Of course, all communications back and forth between buyer and seller regarding inspections and negotiations around them must be done in writing.


This is where a professional Realtor (like me) can take over and guide the negotiations. Whether it’s an inspection issue, working with loan professionals or just getting all parties on the same page, I excel at contract negotiations.

See my testimonials http://www.garnergroupproperties.com

Rodger P. Garner



Buyers should also take note of the following:


Lead-based Paint. If the home was built prior to 1978, the seller must provide the buyer with a lead-based paint disclosure form. Buyer should use certified contractors to perform renovation, repair or painting projects that disturb lead-based paint in residential properties built before 1978 and to follow specific work practices to prevent lead contamination.


Wood Destroying Pest Inspection. Termites are commonly found in some parts of Arizona. The Office of Pest Management (OPM) regulates pest inspectors and can provide the buyer with information regarding past termite treatments on a property. If pests or dry rot conditions are noted, there could be an additional expense to negotiate.


Roof Inspection. If the roof is 10 years old or older, a roof inspection by a licensed roofing contractor is highly recommended.


Sewer Inspection. Even if the listing or SPDS indicates that the property is connected to the city sewer, a plumber, home inspector, or other professional should verify.  If a home is not connected to a public sewer, it is probably served by an on-site wastewater treatment facility (conventional septic or alternative system). A qualified inspector must inspect any such facility within six months prior to transfer of ownership. Sewers can also get clogged from tree roots or deteriorate over time. Plumbing companies can insert a camera into the sewer line to check for damage during a sewer inspection. This is an expensive repair.


Private Well Inspections. If the home is not connected to city water but rather has a private well, buyers may want assurance that the water is potable and meets acceptable health standards. A well inspection can also deliver stats on how fast the water can be brought to the surface.


Swimming Pools and Spas. If the property has a pool or a spa, the home inspector may exclude the pool or spa from the general inspection so an inspection by a pool or spa company may be necessary.


Radon, Imported Drywall, Mold or Asbestos Inspections. Sometimes home inspectors will call for additional inspections by licensed entities to check for special situations such as radon gas, imported drywall, mold or asbestos; however, mold and airborne health hazards are most often not detectable by a visual inspection. To determine if the premises you are purchasing contain mold or airborne health hazards, you may retain an environmental experiment to perform an indoor air quality test.


Soil Problems. The soil in some areas of Arizona has “clay-like” tendencies, sometimes referred to as “expansive soil.” Other areas are subject to fissure, subsidence and other soil conditions. Properties built on such soils may experience significant movement causing a major problem. If disclosed or if the buyer has any concerns about the soil condition or observes evidence of cracking, the buyer should secure an independent assessment of the property and its structural integrity by a licensed, bonded and insured professional engineer.


Previous Fire/Flood. If it is disclosed there has been a fire or flood on the property, a qualified inspector should be hired to advise you regarding any possible future problems as a result of the fire or flood damage.


Preliminary Title Report. Title investigations will disclose easements, monetary liens of record, including the ability of the seller to transfer clean title to the buyer, and Covenants, Conditions & Restrictions (CC&R) information. If you can, always order a title policy. You might discover an easement falls on the property line right where you want to build a fence or put in a pool, and that could be grounds for cancellation of a contract.


Homeowner Association Documents. Buyers should obtain a copy of all homeowner association documents, including meeting minutes, if applicable. Pay special attention to the Home Owners Association (HOA) reserves. A deficiency in the reserves could be a red flag that the HOA is in financial trouble or the HOA dues might be in line for a steep increase.