Wondering why you’re asked to write a check the moment your offer is accepted in North Carolina? If you’re buying in Myers Park or nearby Charlotte neighborhoods, the due diligence fee is a key part of how deals work here. It protects the seller while you investigate the home, and it can also help your offer win in a competitive market.
In this guide, you’ll learn what the due diligence fee is, how it differs from earnest money, what typical amounts look like in Charlotte and Myers Park, and how to set a smart fee and timeline that match your goals. You’ll also get a practical checklist for your due diligence period and clear answers to common questions. Let’s dive in.
What the due diligence fee covers
In North Carolina, the due diligence fee is a negotiated, upfront payment from you to the seller when both parties sign the contract. It compensates the seller for taking the property off the market during your agreed due diligence period. During this window, you can investigate the property, line up financing, and decide whether to move forward.
Think of the fee as the cost of reserving the home while you do your homework. If you close, the fee is credited to your purchase price at settlement. If you terminate during the due diligence period under the contract, the seller usually keeps the fee. Contract language controls the outcome, so your agent will walk you through the specifics.
Due diligence vs earnest money
These two payments do different jobs:
Due diligence fee
- Paid to the seller at contract signing.
- Compensates the seller for the due diligence period.
- Typically nonrefundable after the period ends, unless your contract says otherwise.
- Credited to your purchase price at closing.
Earnest money deposit
- Paid into escrow with a closing attorney, title company, or brokerage trust.
- Shows good faith and applies to price or closing costs at closing.
- If you terminate within the due diligence period per the contract, your earnest money is generally refundable to you.
The practical difference is risk. The due diligence fee is the seller’s guaranteed protection for the time off market. Earnest money sits in escrow and follows contract procedures if there is a dispute.
How the due diligence period works
The due diligence period is the number of days you negotiate in the contract to complete inspections, review documents, and make a final decision. Common timelines include:
- Typical transactions: 7 to 14 days.
- Competitive situations: 2 to 5 days.
- Complex deals or new construction: 21 to 30 days or more.
During this time, you should schedule a general home inspection and any specialists, review the title and HOA documents, order a survey if needed, start or advance your loan underwriting, and negotiate repairs or credits. If you decide not to proceed, you can terminate within the period under the contract. If you continue, the deal moves toward closing.
A simple money flow example
Here is a straightforward scenario to make the mechanics clear:
- You and the seller sign a contract for a Myers Park home. You pay a $15,000 due diligence fee to the seller and a $50,000 earnest money deposit into escrow.
- If you close, the $15,000 due diligence fee and the $50,000 earnest money are both credited to your purchase price or closing costs.
- If you terminate during the due diligence period per the contract, the seller typically keeps the $15,000 due diligence fee. Your $50,000 earnest money is generally returned to you by the escrow holder.
- If you terminate after the period without a contractual right, you may be in breach. The seller may keep both funds and could seek other remedies under the contract.
Contract terms govern the exact outcomes, including timelines and notice requirements. Your agent and closing attorney will help you follow the steps precisely.
Typical fees in Myers Park
There is no fixed standard for the due diligence fee in North Carolina. It is negotiated and shaped by the property, price point, and competition level. In the Charlotte area, ranges often look like this:
- Low to mid-priced properties with modest competition: a few hundred to several thousand dollars.
- Mid to high-priced homes: commonly $2,000 to $10,000.
- Premium neighborhoods and higher-priced listings like Myers Park: offers often include five-figure fees, frequently $10,000 to $50,000 or more depending on list price and multiple-offer pressure.
Myers Park tends to see higher fees because of strong demand, higher price points, and the prevalence of multiple offers on unique or historic homes. Some buyers use a rough percentage approach, such as 0.25 to 2 percent of the purchase price. Use these only as reference points. Your strategy should reflect the specific property and current conditions.
How to choose your fee and period
Your target is to balance competitiveness with risk protection. Here are common approaches:
Win the bid strategy
- Offer a higher due diligence fee with a shorter period, such as 3 to 7 days.
- Pair it with strong earnest money and a clean offer.
- Works well when you are confident in the property and prepared to move fast.
Risk-managed strategy
- Offer a modest fee and request a longer period, such as 10 to 14 days or more.
- Gives you more time for inspections and lender steps.
- Sellers may push back on longer timelines in hot situations.
Cash buyer tactics
- Some cash buyers present large due diligence fees or shorten the period to compete.
- Avoid waiving inspections unless you fully understand the risks.
A helpful rule of thumb is to set a period long enough to complete your critical inspections and key lender milestones. Too short can create timing pressure. Too long can weaken your offer if there is strong competition.
Due diligence period checklist
Use this checklist to make the most of your window:
- Book a general home inspection immediately. Line up specialists for roof, HVAC, structural, chimney, pool, and pests as needed.
- Order a radon, lead, asbestos, or mold test if indicated by the home’s age or condition.
- Coordinate with your closing attorney or title company to review the title report and exceptions.
- Request and review HOA documents and financials if the home is in an association.
- Review an existing survey or order a new survey if boundaries, easements, or additions raise questions.
- If applicable, schedule septic and well inspections.
- Advance your mortgage file: appraisal, underwriting items, and rate lock discussions.
- If inspections uncover issues, prepare your repair or credit request in writing within the period.
Risks, refunds, and financing
Refunds during the period
- If you terminate within the due diligence period per the contract, the earnest money is generally returned to you. The seller typically keeps the due diligence fee.
After the period
- If you terminate after the period without a contractual right, you may be in breach. The seller may keep both the due diligence fee and the earnest money and can consider other remedies under the contract.
Seller default
- If the seller fails to perform, contracts typically provide for the return of your funds and may offer other remedies.
Financing
- The due diligence period is not a financing contingency by itself. Whether you can terminate for loan denial depends on your contract’s financing terms. If loan issues arise after the period, and you do not have a contractual right to terminate, you risk losing funds.
Protect yourself
- Document inspections and decisions in writing. Follow notice procedures and deadlines exactly. Keep receipts and communicate through your agent and attorney to create a clear record.
Local tips for Myers Park buyers
- Move fast with a plan. Have inspectors and your lender ready before you write.
- Match fee to property profile. Unique, historic, or top-tier homes may require a larger due diligence fee to compete.
- Use both levers. Combine a strong due diligence fee with an appropriate earnest money deposit and a realistic period that fits your inspection and lending needs.
- Lean on local expertise. An experienced Charlotte agent who works regularly in Myers Park can read seller expectations and advise on current norms.
Buying in Myers Park rewards a precise, well-timed approach. With strong preparation and the right fee structure, you can compete confidently while protecting your interests.
If you want a data-informed plan for setting your due diligence fee, crafting timelines, and scheduling inspections and lender steps, connect with Andy Nock for one-on-one guidance tailored to your goals in Charlotte and Lake Norman.
FAQs
In North Carolina, what is the due diligence fee?
- It is a negotiated, upfront payment to the seller at contract signing that compensates the seller while you complete inspections and investigations during the due diligence period.
How is the due diligence fee different from earnest money in NC?
- The due diligence fee is paid to the seller and is typically not refundable after the period, while earnest money goes to escrow and is generally refundable if you terminate within the period per the contract.
What are typical due diligence periods in Charlotte?
- Many deals use 7 to 14 days, competitive situations can be 2 to 5 days, and complex or new construction deals can run 21 to 30 days or more.
What due diligence fee ranges are common in Myers Park?
- Five-figure fees are common on premium Myers Park homes, often $10,000 to $50,000 or more depending on price and competition, with lower fees at lower price points.
Is the due diligence fee refundable in NC?
- If you terminate during the due diligence period per the contract, the seller typically keeps the fee and your earnest money is usually returned; after the period, you may risk losing both funds.
Can I finance the due diligence fee with my mortgage?
- No, it is paid at contract signing from your own funds; at closing it is credited to your purchase price.
Who holds the due diligence fee and earnest money?
- The due diligence fee is customarily paid to the seller, while the earnest money deposit is held by an escrow agent such as a closing attorney or brokerage trust account.
