Heard about North Carolina’s due diligence fee and wondered why you pay money that you might not get back? If you are buying in Brevard or greater Transylvania County, this fee shapes how you inspect a home and how competitive your offer looks. You want to protect your money while moving fast on the right mountain property. In this guide, you will learn exactly how the fee works, how it differs from earnest money, and the steps to take during your due diligence period so you can buy with confidence. Let’s dive in.
What the due diligence fee is
In North Carolina, the due diligence fee is a negotiated, usually nonrefundable payment you make to the seller. In return, you get an exclusive window of time, called the Due Diligence Period, to fully investigate the property and decide whether to proceed. You can terminate for any reason during this period, as long as you follow the contract rules. If you close, the due diligence fee is credited as part of the purchase price.
This fee is a contract term on the standard state forms. The amount, the length of the Due Diligence Period, and how you deliver the fee are all negotiated. Because it is contractual, local custom and the exact language in your offer control how it functions.
Due diligence vs. earnest money
Purpose and refund rules
The due diligence fee buys your inspection and decision window. It is normally nonrefundable once paid, though it is credited at closing. Earnest money shows good faith that you intend to complete the purchase. Earnest money can be refundable if you follow the contract and cancel within set timelines.
How funds are held
Earnest money is typically placed in an escrow or trust account by the closing attorney, title company, or a broker named in the contract. The due diligence fee is often delivered directly to the seller or to the seller’s attorney, as specified in your offer. Always get a written receipt or ledger entry when you pay.
What happens at closing
If you close, the due diligence fee is applied to the purchase. If you terminate during the Due Diligence Period under the contract terms, the seller usually keeps the due diligence fee and you typically receive your earnest money back. The contract controls exact outcomes and timelines.
Typical terms in Brevard
Due Diligence Period length is negotiable. Many buyers choose a window of days to a few weeks so they can complete inspections. In a competitive market, sellers may favor shorter periods and higher fees. In a slower market, buyers may secure longer timelines with lower fees.
Due diligence fee amounts vary widely across North Carolina and can change with market pressure. In competitive mountain areas, fees may range from modest to several thousand dollars. Ask your local agent what is customary in Brevard at the time you make an offer.
Using money strategy can strengthen your position. A larger due diligence fee or a shorter Due Diligence Period can signal commitment. Some buyers balance risk by pairing a moderate due diligence fee with a larger earnest money deposit, or the reverse.
Inspections, financing, and appraisal
Inspections to prioritize in Brevard
Mountain homes often come with wells, septic systems, and private roads. You should plan for a general home inspection, plus focused checks on roof, chimney, HVAC, electrical, and plumbing. For well properties, order certified water testing for potability and mineral content, and consider a pump evaluation.
For septic, verify permits, system capacity, and past pumping records with Transylvania County Environmental Health. Consider a sewer scope if lines are shared or older. Review drainage, erosion, slope stability, and any foundation settlement. For land use, check potential flood zones, stream buffers, wetlands, and whether conservation easements or encroachments exist.
Appraisal and loan timing
If you need financing, coordinate your appraisal and loan deadlines with your Due Diligence Period. If an appraisal comes in low or a loan is denied, your protection depends on the timing in your contract. Many buyers try to complete, or at least align, appraisal and underwriting during the Due Diligence Period so they keep their strongest options.
HOA, road, and access checks
If the property is in an HOA, review covenants, rules, and fees. Short-term rental rules can affect your plan in mountain resort areas. For private roads, confirm road maintenance agreements, winter access, and who pays for plowing and repairs. Review any driveway easements, steepness, and turnaround space for safe year-round access.
Your due diligence checklist
Immediately after acceptance
- Confirm the exact Due Diligence Period end date and time, including how to deliver termination notice.
- Pay the due diligence fee as the contract instructs and get a written receipt.
- Deliver earnest money per the contract and note who holds it.
First 48 to 72 hours
- Schedule a general home inspection and add a roof inspection if needed.
- If there is a well, order certified water testing and consider a pump inspection.
- If there is septic, schedule inspection, verify permits, and review pumping history with the county.
- Request HOA documents and rules if applicable.
- Review private road agreements and who maintains the road.
Remainder of the period
- Review the preliminary title report or commitment with your closing attorney.
- Review an existing survey or order a new one if boundaries matter.
- Confirm utilities, internet options, and winter access on steep sites.
- Check proximity to public lands and any restrictions from conservation easements.
- Get repair estimates from contractors so you can negotiate or budget accurately.
Before the deadline
- Decide to proceed or terminate. If you terminate, deliver written notice on time and ask for release of earnest money per the contract.
- If you proceed, document any agreed repairs and set timelines.
Offer and negotiation tips
Use the fee and the timeline together. A larger due diligence fee or a tighter timeline can help in a multiple-offer situation if the risk fits your comfort level. A balanced approach uses a moderate fee and a period that allows key inspections without delay.
Coordinate loan milestones with your inspection window. Ask your lender to order the appraisal quickly and to aim for loan approval within or near the Due Diligence Period. If a seller asks for a high due diligence fee, you can request concessions such as a repair credit or closing-cost credit to offset risk.
Some buyers try custom clauses that tie parts of the fee to repair outcomes. This can complicate enforcement and payment. If you consider special terms, talk with your agent and a closing attorney before you submit the offer.
Brevard property considerations
Western North Carolina homes often sit on slopes and private roads, and many have wells and septic. Plan for added checks on access, drainage, and system capacity. Seasonal access and winter maintenance can affect daily life and delivery services.
If you plan to use the home as a vacation rental, verify local ordinances and any HOA rules before you make financial projections. For parcels near Pisgah National Forest, DuPont State Forest, or conserved lands, review any development limits, setbacks, or easements. Local offices that can help include Transylvania County Environmental Health, Planning and Zoning, and the Tax Office, as well as the Town of Brevard for properties in town limits.
Protect yourself legally
The standard forms include instructions for handling escrow disputes if a deal falls through. If there is a conflict about earnest money, the escrow holder can require mutual written instructions or deposit the funds with the court. Your offer controls how these steps work.
Involve a real estate attorney if you are using large due diligence fees, planning nonstandard refund language, or facing a dispute. Keep organized records. Save your due diligence fee receipt, inspection reports, communication about repairs, and proof of delivery for any termination notice.
A smart plan and a clear timeline will help you move from accepted offer to closing with less stress. If you want a local advisor who understands Brevard’s mountain properties, the process, and the pace of the market, connect with Preston Mayfield for personalized guidance.
FAQs
Is the NC due diligence fee refundable?
- Generally no. It is usually nonrefundable once paid, but it is credited to the purchase at closing unless your contract says otherwise.
Can I get earnest money back if I cancel during due diligence?
- Usually yes, if you terminate within the Due Diligence Period and follow the contract’s notice rules and deadlines.
Who holds the due diligence fee and earnest money in North Carolina?
- Earnest money is held in escrow by the party named in the contract, and the due diligence fee is often delivered to the seller or the seller’s attorney as instructed.
How should a Brevard buyer pick a due diligence amount?
- There is no formula, so weigh your risk tolerance and ask your local agent what is customary in Brevard at the time of your offer.
What if I miss the due diligence deadline?
- You typically lose the unilateral right to terminate under due diligence, the seller keeps the fee, and other contract remedies may risk your earnest money.
