Heard people talk about the “due diligence fee” in North Carolina and wonder how much you should offer in Raleigh? You are not alone. This fee is unique to our state, and it can make or break your offer strategy. In this guide, you will learn what the fee is, how it works with earnest money, typical ranges in Wake County, and a practical checklist to get through the due diligence period with confidence. Let’s dive in.
NC due diligence fee, in plain English
The due diligence fee is money you pay the seller for the exclusive right to inspect the home and, if needed, walk away during the due diligence period. In North Carolina, this fee is typically nonrefundable. If you cancel within the due diligence period, the seller keeps the fee, but you usually get your earnest money back under the contract terms. If you close, the fee is credited to the seller at closing.
Standard North Carolina purchase contracts outline the fee amount, the due diligence period end date, and how and when earnest money is delivered. The seller receives the due diligence fee directly, while earnest money is held in a broker’s trust or escrow account. Always review your specific contract with your agent and confirm any details you are unsure about.
Due diligence vs. earnest money
It is easy to mix these up. Here is how they differ in practice:
- Who holds it:
- Due diligence fee: paid directly to the seller at contract ratification.
- Earnest money: deposited into the listing broker’s trust or escrow account.
- Refundability during due diligence:
- Due diligence fee: generally nonrefundable. If you terminate during the due diligence period, the seller keeps it.
- Earnest money: typically refundable to you if you terminate within the due diligence period under the contract.
- Purpose:
- Due diligence fee: compensates the seller for taking the home off the market and giving you an unconditional inspection window.
- Earnest money: shows good faith and becomes part of your funds at closing or is at risk if you default after the period ends.
- Timing:
- Due diligence fee: delivered to the seller at ratification.
- Earnest money: delivered to escrow within a short timeframe after ratification, often a few banking days per the standard form.
Why this matters in Raleigh: you should plan for both amounts. In competitive situations, sellers often value a stronger due diligence fee because it is guaranteed money to them once the contract is signed.
Key timelines in North Carolina
- Ratification: This is when both parties sign and accept terms. It starts the due diligence period and triggers delivery of the due diligence fee.
- Due diligence period: A negotiated calendar date. You can inspect and cancel for any reason within this period. If you plan to terminate based on inspections, you must do so before the deadline.
- Earnest money delivery: The standard form typically requires delivery to escrow within a few banking days of ratification. Confirm the exact timeline in your contract.
- Inspections and requests: Schedule your inspections early. If you want repairs, credits, or need to cancel, act before the due diligence deadline.
Typical due diligence period lengths in Wake County range from about 7 to 14 days for resale homes. Shorter periods can strengthen an offer if you are prepared to move fast on inspections and lender steps. For properties with septic systems, older components, or unique issues, a longer period may be smart.
What due diligence amounts look like in Raleigh
Local norms shift with market conditions. Here are commonly reported ranges and patterns in Wake County. Always verify current numbers with your agent.
- Lower competition or lower-priced homes: often several hundred to a few thousand dollars, such as 500 to 2,500 dollars.
- Many typical Wake County transactions: often around 1,000 to 5,000 dollars.
- Competitive or multiple-offer situations and higher-priced homes: several thousand dollars and sometimes 10,000 dollars or more. In very hot segments, agents may see even higher figures.
What drives the amount:
- Purchase price and seller expectations
- Number of competing offers
- Property age and condition, and the inspection risk you expect
- Cash vs. financed offer strategy
- Builder practices on new construction (these may handle deposits differently)
Earnest money deposits in our area are often a few thousand dollars or 1 to 2 percent of the purchase price on higher-priced homes. In very competitive cases, earnest money may be larger. Remember, earnest money sits in escrow and is credited to you at closing.
How to choose your fee and deposit
Use these factors to set a strategy that fits your goals and risk tolerance:
- Risk tolerance: Decide how much nonrefundable money you can accept losing if an inspection uncovers issues and you need to walk.
- Market read: If listings are moving fast with multiple offers, a stronger due diligence fee can set your offer apart. If the market is slower, you may not need to stretch as far.
- Inspection confidence: If you suspect bigger issues, consider a modest fee and a well-planned inspection schedule to preserve flexibility.
- Fee vs. earnest money: Sellers may prefer a higher due diligence fee over a higher earnest deposit. Ask your agent which mix carries the most weight for this specific seller.
- Timing leverage: A slightly shorter due diligence period can help if you are ready to schedule inspectors on day one and move quickly.
Upfront budget checklist
Set aside funds for the upfront costs you will likely face:
- Due diligence fee (nonrefundable if you terminate during the period)
- Earnest money deposit (held in escrow; typically refundable during the period under the contract)
- Inspections: general home, radon, sewer scope, pest, septic, HVAC, chimney, roof as needed
- Appraisal and lender fees if financing
- Initial insurance bind and other pre-closing items
- Moving costs and immediate repairs or upgrades after closing
Due diligence period: day-by-day checklist
Use this simple timeline so you do not run out of time.
Before and on Ratification (Day 0)
- Confirm the due diligence end date, fee amount, and how payment is delivered.
- Note your earnest money delivery deadline and pay on time.
- Pre-book your home inspector and any specialists so you can start fast.
Days 1–3
- Complete the general home inspection. Add radon, sewer scope, pest, septic, or HVAC checks if recommended.
- If significant issues appear, get quick contractor opinions or estimates. Decide whether to request repairs, ask for a credit, or prepare to terminate before the deadline.
Days 3–7 (or ongoing if you negotiated more time)
- Review all reports and estimates in detail.
- If requesting repairs or credits, submit an addendum with clear, specific terms.
- Coordinate with your lender on appraisal timing. The appraisal may be later, but start the conversation now.
By the Due Diligence Deadline
- Decide to proceed, keep negotiating, or terminate. If you choose to terminate, deliver written notice per the contract before the deadline to preserve your earnest money rights.
After You Move Forward
- Get all agreed repairs in writing. Track receipts and dates.
- Confirm how your earnest money will be credited at closing.
- Keep all inspection reports and addenda for your records and for future maintenance.
Talk to your lender and attorney
Loan programs have rules for fees, credits, and how payments are treated in underwriting. Because the due diligence fee is credited at closing, ask your lender how it fits into your file. If you have any contract questions, ask your agent and consider consulting an attorney. Forms and rules update from time to time, so confirm the details for your specific transaction.
Special situations in Wake County
- New construction: Builders often use their own contracts and deposit structures. The standard due diligence setup may not apply in the same way.
- Condos and HOAs: Build in time to review HOA documents, budgets, and rules within the due diligence period.
- Septic, wells, or environmental items: Plan for specialized inspections and possibly a longer due diligence period.
Your next step
If you are planning to buy in Raleigh or anywhere in Wake County, a clear due diligence strategy helps you write a confident offer and protect your budget. Have questions about how much to put down or how fast to set your timeline? Connect with Dylan Hale to review current local norms and schedule your free consultation.
FAQs
What is the NC due diligence fee and do I get it back?
- It is a negotiated payment to the seller for the right to inspect and cancel during the due diligence period; it is typically nonrefundable, but it is credited at closing if you proceed.
How is due diligence different from earnest money in North Carolina?
- Due diligence is paid to the seller and is generally nonrefundable; earnest money goes into escrow and is typically refundable if you cancel within the due diligence period under the contract.
How much is a typical due diligence fee in Raleigh and Wake County?
- Many recent transactions show fees around 1,000 to 5,000 dollars, with lower or higher amounts depending on price point and competition; multiple-offer situations may push fees to several thousand or more.
How long is a common due diligence period in Wake County?
- Many resale homes use about 7 to 14 days, though shorter periods can be strategic in competitive cases and longer periods may fit homes that require specialized inspections.
If I cancel during due diligence, do I get my earnest money back?
- Under the standard contract, if you terminate before the due diligence deadline, you typically get your earnest money back; the seller keeps the due diligence fee.
Can the seller demand a specific due diligence fee amount?
- The amount is negotiated; the seller can counter your offer terms and request a higher fee, but you decide whether to accept, counter, or walk away.
Do lenders care about the due diligence fee for loan approval?
- Lenders review how all payments and credits fit into underwriting; discuss the fee with your loan officer so they can advise on program-specific treatment.
What inspections should I order during due diligence in Raleigh?
- Start with a general home inspection, then add radon, sewer scope, pest, septic, roof, HVAC, or other specialist checks based on the home’s age and features.
What if the seller counters for more time or different terms?
- Review the counter with your agent and adjust your strategy; you can agree, counter again, or walk if the terms do not fit your risk tolerance or timeline.
