Legal Tip of the Week - Using Due Diligence and how It’s Different from Earnest Money · TCC

Oct 9 (edited) • TCC Huddle

Legal Tip of the Week - Using Due Diligence and how It’s Different from Earnest Money

In North Carolina, real estate transactions operate under a “Due Diligence Period” which gives buyers a set amount of time to inspect the property, secure financing, and decide whether to move forward with a purchase.

Unlike earnest money, the due diligence fee is typically non-refundable, but it gives buyers the right to cancel the contract for any reason during that period. The seller retains this fee if the buyer walks away.

Why this matters for investors:

Negotiate an appropriate due diligence period to thoroughly evaluate investment properties.
Budget enough time for inspections, appraisals, and title review during this time.
If you’re selling, a higher due diligence fee can signal a more serious buyer and helps protect your timeline.

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