In many parts of the country, buyers and sellers can back out of contracts to purchase a home without any real repercussions. Here in the North Carolina Triangle, real estate transactions are more likely to get to the finish line, thanks in large part to due diligence fees.
Let’s take a look at what a due diligence fee is, how it works, and how it can be used as a negotiating tool.
What Is a Due Diligence Fee?
A due diligence fee gives the buyer a period of time to complete inspections of the property. During this time, which is negotiated and written into the contract, the buyer can terminate the contract for any reason.
This fee is non-refundable unless the seller breaches the contract, which is extremely rare. If the buyer decides to walk away, the seller keeps the due diligence fee. If the sale is completed, the due diligence fee is credited to the buyer at closing.