In North Carolina, the due diligence fee:
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Is refundable if buyer terminates
The due diligence fee is explicitly non-refundable in North Carolina if the buyer terminates during the due diligence period. This is a key distinction from earnest money deposits, which may be refundable under certain conditions.
Is non-refundable and paid directly to seller
Goes into escrow
The due diligence fee goes directly to the seller and is not held in escrow. Escrow is typically reserved for earnest money deposits in North Carolina transactions.
Is required by law to be $500
North Carolina law does not mandate a specific amount for the due diligence fee. The amount is negotiable between buyer and seller and is typically based on the property's value and market conditions.
Why is this correct?
The due diligence fee is non-refundable and paid directly to the seller because North Carolina law treats this as compensation for the seller's inconvenience of taking the property off the market during the due diligence period, regardless of the transaction's outcome.
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