Heard friends talk about “due diligence money” in Raleigh and wondered how it really works? If you are buying your first home or relocating to the Triangle, North Carolina’s due diligence system can feel very different from other states. In a competitive market, it also plays a big role in how strong your offer looks. In this guide, you’ll learn what the due diligence fee is, how it differs from earnest money, typical timelines and ranges in Raleigh, and how to use both to compete with confidence. Let’s dive in.
What the due diligence fee is
In North Carolina, the due diligence fee is a negotiated payment you make to the seller for the exclusive right to investigate the property and decide if you want to move forward. This fee buys your unilateral right to terminate during the agreed due diligence period. It compensates the seller for taking the home off the market while you complete inspections and other checks.
You typically pay the due diligence fee directly to the seller at or shortly after your offer is accepted. If you close, that amount is credited to the seller at settlement as part of their proceeds. If you decide to terminate during the due diligence period in line with the contract, the seller generally keeps the fee.
The due diligence fee and the due diligence period are written into the standard North Carolina Offer to Purchase and Contract used statewide. You can read consumer guidance on these forms from North Carolina REALTORS.
Earnest money vs. due diligence
While both are part of your offer, they serve different purposes and are handled differently.
Purpose
- Due diligence fee: Buys you time and the right to terminate during the due diligence period.
- Earnest money: Shows good faith and backs your promise to close once contingencies have passed.
Where funds go
- Due diligence fee: Usually paid to the seller or per contract instructions.
- Earnest money: Held by an escrow agent, often the closing attorney or a brokerage trust account, and handled under state trust-fund rules. Learn more about escrow oversight from the North Carolina Real Estate Commission.
Refundability
- Due diligence fee: Generally non-refundable to you if you terminate during the due diligence period. If the seller defaults, you may have remedies depending on the contract and law.
- Earnest money: Refundable if you end the contract under permitted contingencies, including a timely termination during the due diligence period. If you default after protections expire, the seller may have a claim to it.
Typical Raleigh timelines and amounts
Every deal is negotiable, but recent local practice offers helpful guideposts:
Due diligence period length
- Competitive offers: about 3 to 10 days.
- Typical offers: about 7 to 14 days.
- Less competitive or more complex deals: about 14 to 21 days or longer.
Due diligence fee ranges
- Lower-priced homes or listings with strong activity: several thousand dollars is common, often in the range of about 1,000 to 5,000 dollars.
- Mid-range or highly competitive homes: 5,000 to 15,000 dollars or more in some bids.
- High-end or cash-heavy situations: substantially larger fees are not unusual.
Exact numbers vary by price point, days on market, neighborhood desirability, and seller preferences. A home in North Hills or Five Points may see different expectations than a property in Brier Creek or North Ridge. Your agent will help you right-size the fee for the specific home you want.
How DDF shapes offer strength
Sellers favor offers with larger due diligence fees and shorter due diligence periods because these terms show commitment and reduce lost marketing time. A strong due diligence fee signals that you intend to close and are willing to compensate the seller for the pause in showings.
As a buyer, you might increase the fee to stand out in multiple-offer situations. You can also keep a reasonable due diligence period while showing strength through the fee itself. Remember the tradeoff: because this fee is typically non-refundable if you terminate during the due diligence window, you should offer only what you are comfortable losing if you need to walk away.
Align with inspections, appraisal, and loan
Your due diligence period is your window for investigation. Most buyers schedule a general home inspection right away and add specialized inspections as needed, such as radon, HVAC, sewer or septic, and structural review. If you are buying in an HOA or condo community, request and review documents early.
Lender underwriting and appraisal often extend beyond the due diligence period. Coordinate timing with your lender so that your due diligence period is realistic. If your due diligence period ends before financing or appraisal is complete, you may take on extra risk if issues come up later and your contract protections have expired.
Strategy for different buyer goals
If you need to compete
- Consider a higher, but still affordable, due diligence fee paired with an elevated earnest money deposit.
- Keep the due diligence period as short as your inspectors and lender can support.
- Be ready to move quickly on scheduling and document review.
If you are risk-averse
- Choose a modest due diligence fee with typical timelines.
- Preserve enough days to complete all inspections and initial lender milestones.
- Understand that this may be less competitive in hot neighborhoods.
If the property is complex
- Prioritize a due diligence period that covers specialized inspections, such as septic or structural.
- Calibrate the due diligence fee to reflect the extra time you need.
- Build in time for HOA or municipal research when applicable.
Step-by-step checklist for Raleigh buyers
Use this quick plan to manage time and risk while your offer is in play.
Before you write an offer
- Talk with your agent about neighborhood-specific norms in places like North Ridge, Five Points, North Hills, and Brier Creek.
- Confirm realistic inspection and loan timelines with your lender so your due diligence period is achievable.
- Decide the maximum due diligence fee you can afford to lose if you terminate during the due diligence period.
Once your contract is accepted
- Deliver the due diligence fee and earnest money according to the contract instructions and deadlines.
- Schedule inspections immediately. Reserve time for follow-up specialists if your general inspector recommends them.
- Request HOA or condo documents right away and begin your review.
- Order title work and confirm the closing attorney or escrow agent who will hold the earnest money.
- Check utilities, floodplain status, septic versus sewer, potential special assessments, and any local zoning or short-term rental restrictions that matter to your plans.
- For public records and deed research, use the Wake County Register of Deeds. Your agent and closing attorney can guide you on what to request.
Documentation and communications
- Keep written records of payments and receipts for both the due diligence fee and earnest money.
- If a dispute arises over earnest money, resolution typically follows the dispute clauses in your contract and escrow rules. Consult your broker or an attorney for next steps.
What if you need to terminate
If you terminate within the due diligence period according to the contract, the seller generally keeps the due diligence fee. Earnest money is usually returned to you when termination is permitted by the contract terms.
If you terminate after the due diligence period has expired, you may risk losing earnest money depending on the contract and circumstances. If the seller defaults, you may have remedies that can include the return of the due diligence fee. Your agent and a real estate attorney can help you understand your specific options.
Where to verify and learn more
For clear, state-level guidance on trust funds and licensee obligations, visit the North Carolina Real Estate Commission. To learn about the standard Offer to Purchase and Contract and consumer resources on due diligence and earnest money, see North Carolina REALTORS. For recorded documents and property records in Wake County, the Wake County Register of Deeds is the official source.
Final thoughts
Used well, the due diligence fee is a smart tool. It buys you time and exclusivity to investigate while signaling strength to the seller. The key is aligning the fee and the timeline with your budget, inspections, and lender milestones so you compete without taking on unnecessary risk. If you want neighborhood-specific guidance on typical fees and timelines in Raleigh, we’re here to help.
Ready to plan a winning strategy? Reach out to Cobb Zies & Co for thoughtful, local advice tailored to your goals.
FAQs
What is the North Carolina due diligence fee?
- It is a negotiated payment to the seller that gives you an exclusive period to inspect and decide whether to proceed, with the seller generally keeping the fee if you terminate during that period.
How much is a typical due diligence fee in Raleigh?
- Broad ranges seen locally run from about 1,000 to 5,000 dollars on lower-priced homes, 5,000 to 15,000 dollars or more on competitive mid-range homes, and higher on premium or cash offers, with exact numbers varying by property and demand.
How long is the due diligence period in Raleigh?
- Competitive offers often run 3 to 10 days, typical offers 7 to 14 days, and more complex or less competitive situations 14 to 21 days or longer, all subject to negotiation.
Who holds the due diligence fee and when is it paid?
- You usually pay the seller at or shortly after mutual acceptance, and if you close, the amount is credited at settlement as part of the seller’s proceeds.
Can I get my due diligence fee back if I back out?
- If you terminate during the due diligence period according to the contract, the seller generally keeps the due diligence fee; other remedies can apply if the seller defaults.
How is earnest money different from the due diligence fee?
- Earnest money is held in escrow by a named agent or attorney and is typically refundable if you terminate under permitted contingencies, while the due diligence fee pays for your right to walk away during the due diligence period and is generally non-refundable to you.
