Your North Carolina Due Diligence Period: A Buyer's Checklist

What you'll walk away with

• What the due diligence fee actually buys you, and where the money goes
• Why extensions must be in writing
• A practical inspection and paperwork checklist

In this guide

• How the fee and the period fit together
• What happens when the period ends
• Extensions must be in writing
• What to inspect and review

"Due diligence" is the heart of a North Carolina purchase. It is your window to investigate the home, line up your financing and decide whether to move forward, with the right to terminate for any reason or no reason. Here is how it works and how I help clients use it.

How the fee and the period fit together

• The due diligence fee is a negotiated payment from buyer to seller. It buys you the right to walk away during the due diligence period.
• It is paid directly to the seller, not held in escrow, and it is generally non-refundable. If the sale closes it is credited toward the purchase price.
• The amount is entirely negotiable. There is no standard figure; it depends on the market, the property and the length of the period.
• It is due when the contract becomes effective. If it isn't paid on time, the seller can end the contract after written notice, and your right to terminate for any reason only applies once the agreed fee has been paid.

What happens when the period ends

After the period expires, backing out without a lawful reason is a breach of contract and can put your earnest money deposit at risk. That's why the calendar matters: write the deadline down on day one.

Extensions must be in writing

A seller has no obligation to extend the period. If one agrees, get it in writing. If you need to sell another home first, plan around the deadline rather than hoping for an extension.

What to inspect and review

• General home inspection by a licensed inspector
• Specialty inspections as warranted: wood-destroying insects, radon, chimney and fireplace, sewer line, HVAC, roof, foundation, well and septic where applicable
• Appraisal and loan-approval milestones with your lender
• Review HOA documents and fees; confirm rules on rentals, fences and exterior changes
• Verify school assignment by address, plus utilities, flood zone and insurance quotes
• Review seller disclosures and any repair requests, and track what is agreed in writing

Sources: NC Real Estate Commission: "Due Diligence" Questions and Answers

General information, not legal, tax or financial advice. Rules and forms change; confirm current details with your closing attorney, lender and the sources linked above.

Due diligence checklist

• Write the deadline on your calendar the day the contract is effective
• Pay the due diligence fee on time (it goes directly to the seller)
• Hire a licensed home inspector
• Order specialty inspections as needed: wood-destroying insects, radon, sewer line, HVAC, roof, well and septic
• Confirm loan approval milestones and the appraisal with your lender
• Review HOA documents, fees and rules
• Verify school assignment by address
• Get homeowners insurance quotes and check flood zone
• Submit repair requests and get every agreement in writing
• Decide before the deadline: proceed, renegotiate or terminate

About this guide

Joseph Ford is a licensed North Carolina real estate broker and REALTOR®, not an attorney, lender, tax professional or financial advisor. This guide is general educational information, not legal, tax, lending or investment advice, and it is not an offer or commitment to lend. Laws, forms, rates and program terms change; confirm current details with the sources linked above and with the appropriate professional. You are free to choose any lender, attorney, inspector or other provider, and I will never require you to use one I mention. Equal Housing Opportunity.