Let’s Find Home: Understanding Your Due Diligence Fee

This is a conversation I have with every buyer, not just the ones relocating from out of state. It happens before we ever start touring homes, and it has to happen before an offer is written, not after one is accepted. Before you can write a strong, informed offer in North Carolina, you need to understand your due diligence fee. I consider this part of the actual cost of buying a home here, not paperwork to sort out later.

The Two Payments, Briefly

When you make an offer in North Carolina, you are typically putting up two separate amounts. Your earnest money deposit gets held in escrow, usually by the closing attorney, and comes back to you if you terminate the contract properly within your due diligence period. Your due diligence fee goes straight to the seller and works very differently, which is what I want to spend the rest of this on, because it is the piece that catches almost everyone off guard.

What Your Due Diligence Fee Actually Is

Your due diligence fee goes directly to the seller once the contract is signed. It is important to understand what this fee is, and just as important to understand what it is not. In North Carolina, a buyer can terminate a contract at any time, for any reason or no reason at all, right up until closing. This right is not limited to the due diligence period, and it does not depend on how much due diligence money you offered, even if that number is zero. The fee itself does not purchase that right. It already belongs to you, for the life of the contract.

What changes over time is not your right to walk away. It is what walking away costs you. If you terminate during your due diligence period, you generally lose your due diligence fee, and your earnest money comes back to you. If you wait and terminate after that period has closed, the standard North Carolina contract allows the seller to retain both your due diligence fee and your earnest money deposit together as liquidated damages.

What the fee actually does is compensate the seller for the risk they are taking on. When a seller accepts your offer, they take their home off the market and trust that you will follow through. If you later decide to terminate, which is entirely your right, the seller has lost real time they could have spent marketing to other buyers. Your due diligence fee is a good faith show of commitment that says, I am willing to compensate you for that risk and that time. If you close on the home, the fee gets credited toward your purchase. If you walk away during your due diligence period, the seller keeps it, as compensation for the time and opportunity cost they took on in trusting your offer.

I tell people this often. Do not treat your due diligence fee as a small formality. Treat it as a real, meaningful gesture of good faith, one that sellers and their agents weigh seriously when comparing offers. That number, and the length of your due diligence period, matter just as much as your offer price, and I walk through both with every client before we ever submit an offer.

The Except When…

Here is the part that actually matters most, and the reason I spend real time on this with every buyer.

The general rule is that your due diligence fee is not refundable if you walk away during your due diligence period. Except when the seller or their agent knowingly withheld a material fact.

A material fact, under North Carolina law, is any fact that could affect a reasonable person’s decision to buy, sell, or lease a property. Brokers have a legal duty to both discover and disclose material facts, not just answer honestly if asked. This duty comes from North Carolina General Statute 93A-6(a)(1) and Real Estate Commission Rule 58A .0114(c), and it was reinforced by the North Carolina Supreme Court in a 2021 case called Cummings v. Carroll, which confirmed that an agent must disclose any fact they know, or reasonably should know, would affect a buyer’s decision. Structural defects and malfunctioning systems are squarely in this category. So is a seller’s refusal to repair a known issue once it has been discovered.

In plain terms. If a seller or their agent knew about something serious and stayed quiet about it, and that is later proven, you may have real legal grounds to recover your due diligence fee, even though the general rule says it is gone once you walk away.

What This Looks Like in Practice

Say your inspection turns up an issue, and the seller declines to fix it. You decide the risk is not worth it, and you terminate within your due diligence period. That is a normal, everyday due diligence termination. The seller keeps your fee, and that is exactly how the system is supposed to work.

Now say instead that the seller already knew about a serious problem, something like a structural issue, before you ever went under contract, and never disclosed it. If that comes out later, you may have real legal standing to get your due diligence fee back, because a seller knowingly withholding a material fact is not the same thing as a buyer simply changing their mind.

The difference between those two situations is everything, and it is exactly why this conversation happens before you ever write an offer, not after something goes wrong.

One more thing worth knowing. A broker cannot claim a defect was common knowledge as a defense for staying quiet about it. If it is a material fact, it has to be disclosed, in writing, and in a timely way, regardless of whether the broker assumed you would find out anyway.

If you ever believe a material fact was knowingly withheld in your own transaction, this becomes a legal matter, not something your agent can resolve on their own. I always recommend buyers speak with a real estate attorney in that situation, and I will walk beside you through that process rather than try to handle it myself.

Something Else Worth Knowing

North Carolina is an attorney closing state, meaning a licensed attorney, not just a title company, handles your closing. If you are moving from a state where title companies handle everything, this is one more structural difference worth understanding early, not on closing day.

Let’s Talk

Contracts are where a lot of relocation anxiety quietly lives, not because the process is actually complicated, but because nobody explained the rules of the specific state you are moving to.

If you are relocating to Charlotte and want to understand exactly what you will be signing before you ever get to that point, I would love to help. No pressure, no sales pitch, just a clear explanation from someone who walks buyers through this regularly.

You can reach me anytime at hello@ebonisellscharlotte.com.

xo, Eboni, a Jersey girl who chose the Queen City.