NC Due Diligence Fee vs. Earnest Money: What Buyers & Sellers Should Know

North Carolina uses two deposits in most home purchases—the due diligence fee and earnest money. They look similar but work very differently.

1) Due Diligence Fee (DD)

• What it is: Paid directly to the seller for taking the home off the market during your due-diligence period.

• Refundability: Typically non-refundable; credited to you at closing.

• Strategy: Higher DD can strengthen your offer—balance against risk.

2) Earnest Money (EMD)

• What it is: A good-faith deposit held in escrow.

• Refund Basics: If you terminate within DD per contract, EMD is generally refundable; after DD ends, risk of loss rises.

• Strategy: Align DD deadline with inspections, appraisal, and loan milestones.

3) Timeline Snapshot

Offer accepted → DD starts → inspections ordered (home, pest, HVAC, septic if applicable) → appraisal/loan work → decision before DD deadline.

4) Seller Perspective

DD shows commitment; clean timelines and fast scheduling reduce uncertainty.

FAQs

Who holds EMD? Typically the closing attorney or brokerage trust account.
How much for DD/EMD? Depends on price, competition, and risk tolerance—ask for a data-based range.
What if the appraisal is low? Options include price negotiation, extra cash, or termination (per terms).
Can DD ever be refunded? Rare, contract-specific scenarios only.

Want a simple timeline for your situation?  Lets schedule a consultation (no-obligation!)  Email me at Info@RWRealtyNC.com