Is the Due Diligence Fee in North Carolina a Scam?

If you’re buying a house in North Carolina and hear about the “due diligence fee,” you might wonder:
Wait, is this a scam?

I’m Tiffany Webber, a real estate attorney in Lake Norman, and after closing thousands of real estate transactions across North Carolina, I’m here to clear it up:
No, the due diligence fee is not a scam — but it’s definitely unique to North Carolina’s way of doing real estate.

Here’s what you need to know before making an offer.

What Is the Due Diligence Fee?

The due diligence fee is a non-refundable payment made by the buyer directly to the seller at the time a contract is signed.
It compensates the seller for taking the home off the market while the buyer conducts inspections, secures financing, and does other homework.

Think of it like this:
You’re paying for the exclusive right to “look under the hood” of the property — and if you walk away, the seller keeps the fee for the lost market time.

Why Some People Think It’s a Scam

If you’re from out of state (or if your Uncle Eddie bought his house 45 years ago), the due diligence fee can seem bizarre.
Most states don’t have anything like it.

The frustration usually comes from:

• The fee being non-refundable unless the seller breaches the contract

• Buyers feeling like they are “risking” money just for the chance to buy

• Comparing it to states where buyers can walk away with no penalty

But here’s the truth:

• It’s not legally required. It’s a negotiated term.

• You don’t have to offer one (though it may make your offer less competitive).

• Sellers can reject offers without a due diligence fee — and many do, especially in strong markets.

It’s just how the North Carolina real estate process has evolved to balance fairness between buyers and sellers.

How the Due Diligence Fee Protects Sellers

Imagine you’re a seller.
You take your home off the market for 90 days.
The buyer changes their mind at the last minute.
You’ve lost valuable time — and maybe better offers.

The due diligence fee gives sellers some compensation if a buyer walks away.
Especially for longer contracts (90-120 days to closing), it helps sellers feel more secure about pulling their home from the market.

Is the Due Diligence Fee Legally Required?

No.
There’s no law that forces you to offer a due diligence fee.
It’s entirely negotiable.

However, in practice, most offers do include it — because sellers typically prefer offers with some skin in the game.

What Happens If You Walk Away?

If you terminate during the due diligence period:

• You forfeit the due diligence fee.

• You get your earnest money deposit back, assuming you’re using the standard North Carolina Offer to Purchase and Contract.

If you terminate after the due diligence period, you risk losing both the due diligence fee and the earnest money deposit.

Key Takeaways for Buyers

✅ Due diligence fees are normal in North Carolina (but rare elsewhere).
✅ They are not legally required — but strongly influence offer acceptance.
✅ It’s a negotiated term, not a hidden fee or scam.
✅ Always work with an experienced real estate attorney to review your contract and protect your rights.

Buying in Lake Norman? Let’s Make Closing Easy.

At Thomas & Webber, we help buyers understand exactly what they’re signing — and protect their interests every step of the way.
Whether you’re buying your first home or your fifth, we make the process smoother, simpler, and less stressful.

👉 Ready to close with confidence?
Send your contract to [email protected] — and we’ll help you navigate every part of your real estate deal like a pro.