Heard people in the Triangle talking about the North Carolina due diligence fee and wondering if you’ll ever see that money again? You’re not alone. When you’re buying in Durham or Raleigh, the due diligence fee and earnest money can feel confusing, and each plays a different role in your offer. In a few minutes, you’ll understand what each one is, when it’s refundable, how much to plan for, and how to protect yourself on timelines. Let’s dive in.
What the due diligence fee is
The due diligence fee is money you pay the seller for the exclusive right to inspect and decide during the due diligence period. You are essentially buying time to investigate the home and line up financing while the seller takes the property off the market.
If you close, this fee is typically credited to you at closing. If you terminate during the due diligence period, the seller usually keeps the fee.
Where it appears in the contract
North Carolina’s standard Offer to Purchase and Contract has a specific spot for the due diligence fee amount and the due diligence date. This date is the deadline for you to either move forward or give written notice that you’re terminating.
Who holds the money
- Due diligence fee: You usually pay the seller directly, not the brokerage trust account.
- Earnest money: This is separate and typically sits in a broker or attorney trust account until closing.
Due diligence vs. earnest money
It helps to think of these as two different tools in your offer.
- Due diligence fee: Paid to the seller for the right to inspect and walk away. Typically non-refundable, but credited at closing if you proceed.
- Earnest money: A good-faith deposit held in a trust account. Refunded if you terminate on time during due diligence, and applied to your purchase at closing.
Refund rules at a glance
- Due diligence fee: Generally not refundable if you terminate during due diligence. Credited at closing if you continue to settlement. Any special refund terms must be written into your contract.
- Earnest money: Typically refundable if you give written notice to terminate by the due diligence date. If you miss the deadline or breach after due diligence, the seller may claim it under the contract’s remedies.
Timing and notice you cannot miss
Your right to a refund of earnest money depends on giving written notice by the due diligence date. Verbal notice or late notice can cost you. Contracts also commonly require you to deliver earnest money within a short window after the effective date, often within about 3 business days. If you need more time for inspections or lender conditions, ask for an extension before the deadline. The seller may request an additional due diligence fee to agree.
Typical Triangle amounts
Amounts are negotiated and vary with price, property condition, and how competitive the listing is.
- Due diligence fee: In many Raleigh–Durham single-family purchases, you might see roughly 1,000 to 5,000 dollars. In highly competitive or higher-priced situations, the fee can run higher, sometimes 5,000 to 15,000 dollars or more. Lower fees are possible in a softer market or when you offer other concessions.
- Earnest money: Often around 1 to 2 percent of the purchase price. In hot multiple-offer scenarios, some buyers choose more, such as 2 to 5 percent.
Example: On a 350,000 dollar home, a 1 percent earnest money deposit is 3,500 dollars. A due diligence fee could reasonably fall around 1,500 to 4,000 dollars depending on competition and terms.
How to budget your cash
Plan for several early payments once your offer is accepted.
- Due diligence fee to the seller: often 1,000 to 5,000 dollars
- Earnest money to a trust account: often 1 to 2 percent of price
- Home inspection(s): about 300 to 800 dollars, plus any specialty inspections
- Appraisal fee: about 400 to 700 dollars if required by your lender
Illustrative Triangle scenario on a 350,000 dollar purchase:
- Due diligence fee: 2,500 dollars
- Earnest money: 3,500 dollars
- Home inspection: 450 dollars
- Approximate upfront cash: about 6,450 dollars, not including your down payment or closing costs.
Timeline and steps after offer
Follow a clear checklist so you do not miss deadlines.
- Effective date and deposits
- Deliver the due diligence fee and earnest money within the contract’s stated timeframes. Earnest money is commonly due within a few business days.
- Day 1 to 3: Book inspections
- Schedule home, pest, and any specialty inspections right away to leave room for follow-up quotes.
- Order the appraisal and finalize financing
- Work with your lender to lock the rate, submit documents, and get the appraisal moving.
- Negotiate repairs or credits
- If inspections reveal concerns, request repairs or a credit in writing before the due diligence date.
- Decide by the due diligence date
- Move forward or send written termination to protect your earnest money. If you need more time, request an extension before the deadline. Be prepared that the seller may ask for an additional due diligence fee.
- Closing prep
- If you proceed, your due diligence and earnest money amounts are typically credited to you on the settlement statement.
Strategies to strengthen your offer
You can balance risk and competitiveness with smart choices.
- Pick a meaningful but comfortable due diligence fee. It signals seriousness to the seller while keeping your risk in check.
- Keep your due diligence period realistic. Short is strong, but leave enough time for inspections and quotes.
- Get preapproved. A solid lender letter can help you avoid overpaying in due diligence.
- Consider terms, not just dollars. Flexible closing timing or clean contingencies can complement a modest due diligence fee.
- If you are worried about risk, you can negotiate alternatives. Some buyers ask to escrow part or all of the due diligence fee with specific contract terms.
Common pitfalls to avoid
A few preventable mistakes can cost you real money.
- Missing the due diligence date or giving verbal notice instead of written notice
- Delivering earnest money late or to the wrong trust account holder
- Skipping early inspections and discovering major issues after your deadline
- Wiring funds without verifying instructions over a trusted phone number
Taxes and legal questions
The due diligence fee is generally treated as part of the seller’s sales proceeds at closing. For tax treatment, talk with a qualified tax advisor. For contract questions or disputes, consult your real estate attorney.
How a local agent helps
A hands-on agent keeps your deadlines tight, your inspections organized, and your negotiations strategic. You will get clear guidance on fee amounts that fit today’s Triangle conditions, support with repair requests, and help if you need an extension. If you are planning a move in Durham, Raleigh, or nearby, we are here to help you buy with confidence.
Ready to take the next step? Connect with Integrity Realty Group, LLC. Make Every Move With Integrity.
FAQs
What is the NC due diligence fee in home buying?
- It is a negotiated payment to the seller for your exclusive inspection period, typically credited at closing if you proceed and usually not refundable if you terminate during due diligence.
How is earnest money different from due diligence in NC?
- Earnest money is a good-faith deposit held in a trust account, usually refundable if you terminate in writing by the due diligence date and applied to your purchase at closing.
When do I get earnest money back in Raleigh–Durham deals?
- You generally get it back if you give written notice to terminate by the due diligence date as stated in your contract; late or verbal notice can put it at risk.
How much due diligence fee is typical in the Triangle?
- Many single-family offers land around 1,000 to 5,000 dollars, with higher amounts in competitive or higher-priced situations and lower amounts possible in softer markets.
How much earnest money should I expect in Durham County?
- A common range is about 1 to 2 percent of the purchase price, with some buyers offering more in multiple-offer situations.
What if I need more time before the due diligence deadline?
- Ask the seller for an extension before the deadline; be ready that the seller may request an additional due diligence fee or other concessions.
Who holds the money and how do I pay it?
- You typically pay the due diligence fee directly to the seller, while the earnest money goes to a broker or attorney trust account, usually by cashier’s check or verified wire.
