In North Carolina, the due diligence fee is money a buyer pays straight to the seller in exchange for time to check out the home. If you back out, the seller usually keeps it. If you close, it’s credited toward what you owe at closing.
It’s one of the parts of buying a home here that surprises people, especially buyers moving from another state. Here’s how it works, in plain English.
What Is the Due Diligence Fee in North Carolina?
When you make an offer on a home in North Carolina, you and the seller agree on a due diligence period. That’s a set number of days, starting when the contract is signed, for you to inspect the home, get an appraisal, line up your loan and look into anything else that matters to you.
The due diligence fee is what you pay the seller for that time. The NC Real Estate Commission’s due diligence Q&A describes it as a fee negotiated and paid by the buyer to the seller, if the two sides agree to one. Some contracts have no fee at all.
Who Gets the Fee, and When Is It Paid?
The fee goes directly to the seller. It does not sit in an escrow account the way earnest money does. Your contract says exactly when it’s due, so read that date carefully and plan for it.
If you go on to buy the home, the fee is credited back to you at closing. It isn’t an extra cost on top of your price.
Can You Get the Due Diligence Fee Back?
Usually, no. If you decide not to buy, the seller typically keeps the fee, unless you negotiated something different in the contract. There are a few exceptions, such as when the seller breaks the contract. If that happens, talk to a real estate attorney about your situation.
That’s why the fee works the way it does. The seller takes their home off the market for you, and the fee pays them for that.
How Much Is a Due Diligence Fee in Eastern NC?
There’s no set amount. It’s negotiated on every deal. The NC Real Estate Commission lists a few things that affect it:
- How busy the market is for that kind of home
- How long the home has been for sale
- How long a due diligence period you’re asking for
- What each side needs, such as a seller who wants a quick, sure sale
In our small towns and rural areas, homes and land can sell at very different speeds, so the right fee in Rocky Mount may not be the right fee in Bailey. Before you write an offer, I’ll look at how quickly similar homes nearby have been selling so we can pick a fee that makes your offer strong without putting too much money at risk.
What to Do During the Due Diligence Period
This is your time to find out everything you need to know about the home. The Commission suggests buyers use it for things like:
- A home inspection, plus any specialty inspections (roof, HVAC, termites)
- A survey, so you know where the property lines are
- An appraisal and final loan approval
- A title search
- On rural property: testing the well and checking the septic system
If the inspection turns up problems, you can ask the seller to make repairs. The seller doesn’t have to agree. If you can’t come to terms, you can end the contract before the period is over. You can end it for any reason, or no reason at all, but it has to be in writing and on time.
Schedule inspections early. Things like well tests and repair estimates can take longer than you’d think out here, and the deadline doesn’t move unless the seller agrees to it in writing.
Due Diligence Fee vs. Earnest Money
Buyers often mix these two up. The due diligence fee goes to the seller and usually stays with them. Earnest money is held in a trust or escrow account. If you end the contract during the due diligence period, you generally get your earnest money back. After the period ends, you lose the right to back out for any reason, and your earnest money is at risk.
You can read more about both on my page for Eastern NC home buyers, or see the full home-buying process step by step in my free Ultimate Buyer Guide.
Questions About the Due Diligence Fee
Usually not. If the buyer ends the contract, the seller typically keeps the due diligence fee unless the contract says otherwise. Exceptions, such as a seller breaching the contract, are rare. Ask an attorney about your situation.
Yes. If you close on the home, the due diligence fee is credited to you at closing.
Nobody holds it. It’s paid directly to the seller.
The due diligence fee goes to the seller and is usually kept if you back out. Earnest money is held in escrow and is generally returned if you end the contract before the due diligence period ends.
Not for any reason you like. After the period ends, you lose that right, and backing out can cost you your earnest money.
No. It’s negotiated. Some offers include no fee, but in a busy market a fee can make your offer more appealing to the seller.
There’s no standard length. You and the seller agree on the end date in the contract. Ask for enough time to finish inspections, the appraisal and your loan approval.
Talk It Through Before You Make an Offer
Every offer is different. If you’re getting ready to buy in Nash, Wilson, Edgecombe or the counties around them, call or text me and we’ll talk about what fee and timeline make sense for the home you want. You can also start your home search here.
Michelle Stewart, REALTOR®, Broker-in-Charge
Heart To Homes Realty LLC
(252) 406-4479