Due diligence in NC explained — what every seller needs to know
Due diligence in North Carolina is different from every other state. If you're selling a home here, you need to understand how the due diligence fee works, why it matters, and how it protects you as a seller. Most sellers don't — until it costs them.
Transcript
Hey, what's up? This is Tim Clarke, a trusted real estate advisor in the Raleigh-Durham Triangle Market, and this is your free helpful tip and trick from Tim. Sellers having realistic expectations of the due diligence fee is very, very important. Due diligence fees are not required, but are often negotiated and are used to compensate the seller for the time their property has been held off the market.
Now, you might see on a third party website a status mark contingent, but in that contingent status, is different from pending. The buyer has the prerogative to terminate for whatever reason before the expiration of the due diligence period. The market conditions and the amount of time the buyer requires for their due diligence should be significant factors in the seller's expectancy of the fee and amount and date. In the seller's market, more substantial fees are often expected.
Now, keep in mind, a lower fee creates less buyer obligation, and there's no requirement for a refund buyer chooses to terminate the contract before the expiration of the due diligence period. Now, a reasonable due diligence period should be allowed for inspections, appraisals, and other loan approval obligations. Here's a quick tip. As a seller, you want that period to be as short, as reasonably as possible, and the buyer, you want the period to be as close to closing as possible.
Now, if a buyer needs more time than reasonable, then a substantially higher due diligence fee becomes more reasonable and understandable. This is Tim Clarke and this is your free helpful tip.
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