If you’re buying a home in North Carolina, you’ll come across two upfront payments early in the process: due diligence money and earnest money.
Both are standard parts of a North Carolina real estate contract, and while they’re often mentioned together, they serve different purposes. Once you understand how each one works, the buying process tends to feel much more straightforward.
Let’s walk through what they mean and how they fit into your purchase.
What Due Diligence Means for Buyers
Due diligence money is paid directly to the seller after a contract is accepted. It allows the seller to take their home off the market while you complete your research and inspections.
The due diligence period itself is negotiated, and in many cases lasts 14–21 days, depending on the property and current market conditions.
During this time, buyers typically:
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Schedule inspections
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Review disclosures and HOA documents
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Finalize financing and appraisal
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Confirm surveys, zoning, or property details
One of the benefits of North Carolina’s system is flexibility. If a buyer decides the home is not the right fit during the due diligence period, they may terminate the contract. In that case, the due diligence money is not refunded, as it compensated the seller for the time their home was off the market.
The Role of Earnest Money
Earnest money is your good-faith deposit showing your intention to move forward with the purchase.
This money is held by a neutral third party, typically the closing attorney, and is applied toward your total purchase price at closing.
Earnest money is generally protected during the due diligence period. If a buyer terminates the contract properly within that timeframe, the earnest money is typically refunded.
Once due diligence ends, the earnest money becomes more significant. At that point, it helps ensure both parties are committed to moving toward closing.
How These Payments Fit Into Your Purchase Price
It’s important to know that neither due diligence nor earnest money are additional costs.
Both amounts are credited toward the home’s total purchase price at settlement. The difference is simply how and when each payment is held, and under what circumstances it may or may not be refunded.
Understanding this helps buyers make informed, comfortable decisions when submitting an offer.
Making Smart Decisions With Confidence
The amount of due diligence and earnest money offered is always negotiable and should reflect the property, the market, and your comfort level.
A thoughtful approach paired with solid inspections and clear timelines helps buyers move forward confidently while still protecting their interests.
A Simple Takeaway
Due diligence gives buyers time to learn more about a home.
Earnest money reflects a buyer’s intent to move forward.
Both are common, expected parts of buying a home in North Carolina, and when used correctly, they help create a smooth and transparent transaction for everyone involved.
Ready for the Next Step?
Buying a home comes with a lot of moving parts, and it’s completely normal to have questions along the way.
If you’d like to learn more or want guidance specific to your situation, we’re here for you. Reach out to your local Nest agent to have a trusted expert walk you through each step and help you move forward with confidence.
