Frequently Asked Questions

Q. What is a due diligence fee?

A. In North Carolina, a due diligence fee is money the buyer pays straight to the seller for the right to investigate the property during a negotiated due diligence period. During that window the buyer can back out for any reason, or none. This fee is credited back at closing or forfeited if backs out of the contract.

Q.  What’s the difference between the due diligence fee and earnest money?

A. This is the most common NC-specific question. The due diligence fee goes to the seller and is generally non-refundable; the earnest money is held in escrow and is generally refundable during the due diligence period. Both are credited to the buyer at closing. Both can be negotiated. Under Form 2-T it is paid by Buyer to Seller for Buyer’s right to terminate the Contract for any reason or no reason during the Due Diligence Period.

Q. Why do I have to sign an agreement before you’ll show me a house?

A. Since the NAR settlement, MLS rules require it. The current Form 201 states that listing service rules mandate a written agreement with Buyer before touring a home in-person or virtually. In NC, that agreement must constitute an agency agreement to comply with North Carolina law. Buyers can also choose a non-exclusive or single-property option. Commission is not fixed by law, but is set by each broker individually, and may be negotiable.

Q. What are my closing costs, and why is there an attorney?

A. North Carolina is an attorney state – attorneys typically conduct closings and handle title work. Buyer costs usually include lender fees, the appraisal, title insurance, prepaid taxes and insurance, and attorney fees. A rough rule of thumb is 2–3% of the price.

Q. What will it cost me to sell?

A. The main items are commissions, the excise tax, deed prep, the mortgage payoff and tax prorations. The excise tax (revenue stamps) is $1.00 per $500 (or fraction) of the consideration, set by G.S. 105-228.30, and it is customarily paid by the seller. For example, on a $400,000 sale, that’s $800.

Q.  How long does a typical closing period happen in?

A. Every deal is different and can take up to a few years if purchasing land, or commercial, or new construction. On a typical resale home in North Carolina though, an average closing time is 30-45 days from contract signing.