Have you heard buyers in Matthews talk about writing a big check right after going under contract? They are likely talking about North Carolina’s due diligence fee. If you are planning to buy or sell a home in Mecklenburg County, understanding this fee can shape your negotiating strategy and protect your budget. In this guide, you will learn what the due diligence fee is, how the due diligence period works, how it differs from earnest money, and what smart offers look like in the Matthews market. Let’s dive in.
What is the due diligence fee?
The due diligence fee is an up-front payment you, as the buyer, agree to pay the seller when your offer is accepted. It is negotiated in the standard North Carolina purchase contract and compensates the seller for taking the home off the market while you complete your investigations and decide whether to move forward.
In most cases, the fee is due at contract acceptance or shortly after, based on the written contract. If you close, the fee is usually credited back to you on the closing statement. If you terminate during the due diligence period, the seller typically keeps this fee.
Due diligence vs. earnest money
These two payments serve different purposes. Understanding the difference helps you structure a strong, balanced offer.
- Due diligence fee: Paid directly to the seller per the contract. It is typically non-refundable if you terminate during the due diligence period, and it is credited back to you at closing if you proceed.
- Earnest money deposit: Held in escrow, usually by a closing attorney or brokerage trust account. If you terminate during the due diligence period under the contract, earnest money is typically returned to you. If you default after the due diligence period, the seller may be entitled to keep it, subject to the contract.
How the due diligence period works
The due diligence period is the window you negotiate in your offer to evaluate the property and finalize financing.
Offer and negotiation
You propose a purchase price, a due diligence period (number of days), and a due diligence fee amount. The seller can accept, counter, or reject. In competitive situations, buyers sometimes offer a higher fee with a shorter period to stand out.
When and how the fee is paid
Your contract will state when the fee is due. Timing norms vary by brokerage and listing agent. The fee may be delivered directly to the seller, to the listing brokerage, or to an escrow agent, depending on local practice and what the parties agree to. Always obtain written confirmation of receipt.
What you do during the period
Use this time to complete inspections and confirm your financing:
- General home inspection
- Specialty inspections where relevant, such as roof, HVAC, radon, or sewer
- Review seller disclosures and, if applicable, lead-based paint disclosures
- Review HOA documents, survey, and tax records
- Prepare for appraisal and finalize loan underwriting
If you uncover issues, you can negotiate repairs or credits, or you can request an extension of the due diligence period. Any changes must be in writing and signed by both parties.
If you terminate or close
- If you terminate during the due diligence period as allowed by the contract, the seller keeps the due diligence fee and you usually receive your earnest money back.
- If you proceed to closing, the due diligence fee is credited to you per the contract.
- If you fail to close after the due diligence period without a permitted reason, the seller may keep your earnest money and the due diligence fee generally remains with the seller.
Typical amounts and timelines in Matthews
There is no set or statutory amount for the due diligence fee in North Carolina. In practice, amounts vary by price point and market conditions:
- In less competitive segments, fees may be in the hundreds to low thousands of dollars.
- For higher-priced or in-demand homes, buyers sometimes offer several thousand dollars, with mid–five-figure amounts appearing on premium properties.
Typical due diligence periods range from about 5 to 14 days in many markets, but this is negotiable. In a competitive environment, buyers may offer a shorter period. For complex properties, a longer period may be reasonable.
Because Matthews is part of the Charlotte metro, broader trends in inventory, rates, and buyer demand influence what is considered competitive. The right fee and period for your offer should be based on current comps, days on market, and seller expectations in your specific neighborhood and price band.
Buyer strategy in Mecklenburg County
When you are weighing the fee and period, think about both your goals and your risk tolerance.
- Balance risk and competitiveness. A larger fee signals confidence and can strengthen your offer, but it increases your upfront risk if you terminate during the period.
- Choose a realistic period. Allow enough time for inspections, HOA document review, and lender steps. Ask your inspector and lender about timelines before you write the offer.
- Confirm payment mechanics. Make sure your contract states when the fee is due, where it is delivered, and how receipt will be documented.
- Use your time well. Schedule inspections quickly, review disclosures, and communicate early if you need repairs or an extension. Put all changes in writing.
Seller strategy in Matthews
As a seller, the due diligence fee offsets the opportunity cost of taking your home off the market.
- Evaluate both the fee and the period. A higher fee with a shorter period may reduce your risk of a change of heart. Weigh these terms alongside price and other contingencies.
- Confirm receipt. Follow the contract on how funds are handled and request written confirmation of delivery and receipt. Ask your closing attorney or listing brokerage about disbursement procedures.
- Understand outcomes. If the buyer terminates during the period, you typically keep the fee and the home goes back on the market. After the period, your remedies are governed by the contract.
Common misunderstandings to avoid
- The fee is not a penalty. It is contractual consideration for the time you are off market, and if the sale closes, it is typically credited to the buyer.
- It is separate from earnest money. The fee is not handled the same way as escrowed earnest money, and local office procedures can differ.
- Buyer termination rights differ by timing. During the due diligence period, the buyer can usually terminate for any reason. After the period, termination rights are limited by the contract.
Who holds the fee and how it shows at closing
Handling of the due diligence fee can vary. Some sellers receive it directly. Other times, a listing brokerage or an escrow agent manages delivery. In North Carolina, an attorney typically handles closing. Your closing attorney can explain how the fee will appear on the final settlement statement and how the funds were handled.
Buyer checklist for Matthews
- Set your budget for the fee and the earnest money before you shop.
- Ask your agent what sellers are accepting right now for fee size and period length in Matthews.
- Confirm how and when the fee will be delivered and documented.
- Book inspections early in the due diligence period and review all disclosures.
- Decide on repairs or credits and request any needed extension in writing.
- If you terminate, do it in writing within the period. If you proceed, the fee is typically credited at closing.
Seller checklist for Matthews
- Review fee amount, due diligence period, earnest money, and contingencies as a total package.
- Confirm how funds will be delivered and who will hold them.
- Obtain written receipt of the due diligence fee.
- Track deadlines and respond quickly to repair requests or extension proposals.
- Coordinate with your closing attorney on how the fee and earnest money will be shown on the statement.
Local questions to ask your agent
- What due diligence fee amounts are Matthews sellers accepting right now in my price range?
- How long are sellers comfortable with for the due diligence period in today’s market?
- Who will receive or hold the fee and how will we document it?
- How will the fee appear on the closing statement if we proceed?
- What recent comps show how competitive offers are in my neighborhood?
Next steps
Buying or selling in Matthews is easier when you understand how the due diligence fee and period shape your leverage. Align your offer strategy with current neighborhood norms, move quickly on inspections, and get every change in writing. If you have questions about how funds are handled, ask your closing attorney. For any tax implications of receiving a fee, consult a tax advisor.
If you want local, high-touch guidance on fee amounts and timelines that work in today’s Matthews market, reach out to the team that knows this community. Connect with At Home in the Carolinas to talk strategy, timing, and pricing, or to request a personalized market valuation. Get Home Value.
FAQs
What is a due diligence fee in North Carolina home purchases?
- It is a negotiated, up-front payment from the buyer to the seller that compensates the seller for taking the home off the market while the buyer completes inspections and decides whether to proceed.
Is the due diligence fee refundable in Matthews, NC?
- Generally no; if the buyer terminates during the due diligence period, the seller typically keeps the fee, and if the sale closes, the fee is usually credited to the buyer.
How is due diligence different from earnest money in NC?
- The due diligence fee is paid directly to the seller and is typically non-refundable, while earnest money is held in escrow and is treated differently under the contract if the buyer terminates or defaults.
How much due diligence fee should I offer in Matthews?
- There is no fixed amount; fees range widely by price point and competitiveness, so base your offer on current Matthews comps, days on market, and seller expectations.
How long is a typical due diligence period in Mecklenburg County?
- Many contracts use 5 to 14 days, but the period is negotiable and can be shorter in hot situations or longer for complex properties.
What happens if inspections find major issues during the due diligence period?
- You can negotiate repairs or credits, request an extension, or terminate within the period for any reason under the contract.
Who holds the due diligence fee in Mecklenburg County transactions?
- It depends on local practice; the fee may be delivered directly to the seller, the listing brokerage, or an escrow agent, so confirm details and obtain written receipts.
