If you are shopping for a home in Raleigh or anywhere in Wake County, you will likely hear about North Carolina’s due diligence fee. It can feel unusual if you are moving from another state. You might even wonder why buyers pay a seller before inspections begin. You are not alone, and a clear understanding will help you write a stronger offer with less stress. In this guide, you will learn what the fee is, how it differs from earnest money, typical local amounts, and how to use it to your advantage. Let’s dive in.
What the due diligence fee is
In North Carolina, the due diligence fee is a buyer-paid amount that goes to the seller when the purchase contract is signed. The purpose is to compensate the seller for taking the home off the market while you complete inspections, review documents, and decide whether to move forward.
During the agreed due diligence period, you have the unconditional right to terminate the contract. If you cancel during this period, the seller keeps the due diligence fee. If you close on the home, the fee is usually credited toward your purchase price at closing.
The exact timing, delivery method, and credit of the fee are negotiated in the contract. Because consequences depend on the contract and facts, speak with a licensed real estate attorney if you have specific legal questions.
Due diligence vs earnest money
These two terms often get mixed up, but they serve different roles.
Who gets the funds
- Due diligence fee: typically paid to the seller at contract signing.
- Earnest money: held in escrow by a neutral party, such as a closing attorney or broker trust account.
Refundability
- If you terminate within the due diligence period, the seller keeps the due diligence fee and your earnest money is typically returned to you.
- If you terminate after the due diligence period without a permitted reason under the contract, the seller may be entitled to keep your earnest money as liquidated damages, and the due diligence fee has already been earned by the seller.
Purpose
- Due diligence fee: compensates the seller while you investigate the home.
- Earnest money: acts as security for performance after your inspection window ends.
Keep in mind that financing and appraisal terms still matter. The due diligence fee does not replace lender or loan protections. Your contract may include separate financing-related deadlines and rights.
Due diligence period basics
The due diligence period is negotiated. In Wake County, common timelines vary with the market.
- Competitive markets: about 3 to 7 days, sometimes even 1 to 3 days in bidding wars.
- Balanced markets: about 7 to 14 days.
- Longer windows: 2 or more weeks when you need specialized inspections or you are buying from out of state.
Move quickly the moment your offer is accepted. Order the general home inspection within 24 to 48 hours. If needed, line up septic, well, structural, roof, HVAC, pest, radon, and sewer scope specialists. Use your inspection results to request repairs or credits, or to decide if you will proceed.
Typical amounts in Wake County
There is no set statewide amount. In Raleigh-area deals, the due diligence fee changes with neighborhood, price point, competition, and condition.
- Lower competition: several hundred dollars to a few thousand dollars, often in the $500 to $3,000 range.
- Moderate competition: commonly $1,000 to $7,500.
- Hot listings or new construction: buyers sometimes offer $10,000 to $25,000 or more to stand out.
These are general ranges to help you plan. In many Wake County submarkets, including North Raleigh, Cary, Apex, Holly Springs, and Wake Forest, sellers often weigh the size of the due diligence fee alongside price, earnest money, and the length of the due diligence period.
Buyer offer strategy in Raleigh
If you are a first-time buyer or relocating to Raleigh, it helps to balance competitiveness with risk.
Set your risk level
- Decide the maximum fee you are comfortable risking if you walk away during due diligence.
- Keep enough cash available for inspections and closing costs.
Strengthen without overexposing
- Offer a larger due diligence fee paired with a short but realistic due diligence period, often 3 to 7 days.
- Keep earnest money reasonable, and include a strong pre-approval and proof of funds for your deposits.
- If you are uneasy about a large non-refundable fee, consider boosting the purchase price, offering flexible closing, or limiting seller concessions.
Move fast on inspections
- Schedule the general inspection within 24 to 48 hours of acceptance.
- Pre-identify specialists so they can step in quickly if the general inspector flags concerns.
Watch financing and appraisal timing
- Track your lender milestones. If you have financing protections, make sure deadlines line up with your due diligence timeline.
Consider extensions carefully
- If you need more time, ask for an extension. You may offer an additional due diligence fee in exchange for extra days.
For relocation buyers who cannot attend inspections easily, consider using video walk-throughs, trusted local inspectors, and a realistic due diligence period. That way you do not offer a very large fee without enough time to verify the home.
Seller tips for DD fees
If you are selling in Wake County, the due diligence fee is a key signal in an offer package.
Value the fee
- A higher fee provides immediate compensation if the buyer cancels during the due diligence period.
Compare the whole offer
- Look at price, due diligence fee, earnest money, financing strength, due diligence length, and the proposed timeline for inspections and closing.
Balance price and certainty
- Some sellers accept a slightly lower price when the due diligence fee is higher and the due diligence period is shorter.
Confirm funds
- Ask for proof that the buyer can deliver the due diligence fee at signing and meet the earnest money deadline.
Add protection if needed
- If you worry about buyer reliability, request higher earnest money or other terms that make default less likely.
Timeline and checklist
Use this quick checklist to stay on track in Wake County.
Before offering
- Set your maximum due diligence fee and due diligence period.
- Obtain a firm pre-approval and gather proof of funds for deposits.
- Identify inspectors and specialists who can schedule quickly.
After acceptance
- Deliver the due diligence fee as the contract specifies.
- Book the general inspection within 24 to 48 hours.
- Order any follow-up inspections right away.
- Review HOA documents and title information during the due diligence period.
- Track critical dates: due diligence expiration, loan commitment deadline, and earnest money timing.
If time runs short
- Ask the seller for an extension in writing.
- Expect to offer an additional due diligence fee for extra days.
Common pitfalls to avoid
- Confusing the due diligence fee with earnest money, which is often refundable during the due diligence period while the fee is not.
- Waiting too long to schedule inspections and running out of time to decide.
- Offering a very large fee with a long due diligence period, which can weaken your negotiating leverage.
- As a relocation buyer, risking a high fee without planning quick inspections and on-the-ground support.
Extensions and add-ons
Sometimes you need more time. If your inspection reveals something that requires a specialist or contractor quotes, ask the seller for a short extension. Expect to offer an additional due diligence fee for the extra days. The seller may agree if your overall offer is strong and your progress is clear. Keep all changes documented in a signed contract amendment.
Local help you can trust
North Carolina’s due diligence system is different from many other states. When you understand how the fee and timeline work, you can write a confident offer that fits your goals and risk tolerance. If you want a clear plan tailored to Raleigh and Wake County submarkets, reach out to Bobbie M Callahan to Request a Personalized Market Plan.
FAQs
What is North Carolina’s due diligence fee?
- It is a buyer-paid amount delivered to the seller at contract signing that compensates the seller while you inspect and decide whether to proceed during the due diligence period.
How does the due diligence period work in Raleigh?
- It is a negotiated window, often 3 to 14 days, where you can terminate for any reason, the seller keeps the fee, and your earnest money is typically returned.
What is the difference between due diligence and earnest money?
- The due diligence fee goes to the seller and is usually non-refundable if you cancel during the period, while earnest money sits in escrow and may be at risk only if you cancel after the period without a permitted reason.
What are typical due diligence fees in Wake County?
- Ranges vary: roughly $500 to $3,000 in lower competition, $1,000 to $7,500 in moderate competition, and sometimes $10,000 to $25,000 or more for hot listings.
Can I use the fee for repairs if inspections find issues?
- No. The due diligence fee compensates the seller. Repair solutions are handled through negotiated repairs, price reductions, or credits at closing.
What happens to my fee if I close on the home?
- It is typically credited toward your purchase price at closing, reducing the cash you need to bring to the table.
What if I need more time before the due diligence ends?
- Ask for an extension and be ready to offer an additional due diligence fee in exchange for extra days; get the extension in writing.
