Due Diligence Period
The due diligence period is the window of time after your offer is accepted where you investigate the property — inspections, title research, HOA review, and anything else that could affect your decision to buy.
In North Carolina, due diligence works differently than most states. The buyer pays the seller a non-refundable “due diligence fee” upfront — often $2,000–$10,000 on a $350K home — to secure the right to investigate the property and cancel for any reason during the due diligence period.
Other states use the term more loosely to describe the overall investigation phase, but the concept is the same: this is your time to do your homework.
What to Do During Due Diligence
- Schedule a home inspection
- Order a pest/termite inspection
- Review the title search results
- Read HOA documents (CC&Rs, financials, meeting minutes)
- Verify property boundaries with a survey
- Confirm your financing is solid
- Research flood zones and insurance requirements
Cram everything into this window. Once it closes, backing out becomes expensive.
Watch out for: In North Carolina, the due diligence fee is non-refundable from day one. If you pay $5,000 in due diligence money and then find a cracked foundation on day three, you can walk away — but that $5,000 stays with the seller. Your earnest money is separate and typically refundable if you cancel during the period. Know exactly how much you’re risking before signing. Use our affordability calculator to factor in these upfront costs.
Due Diligence vs. Option Period
Texas has an option period (small non-refundable fee, usually under $500). North Carolina has due diligence (larger non-refundable fee, often thousands). Both give you the right to cancel, but the financial stakes are very different. Other states use contingencies instead, which cost nothing upfront but have stricter cancellation rules.
How long is a typical due diligence period?
In North Carolina, 14–30 days is standard. In other states, the equivalent investigation timeline is set by your contingency deadlines — usually 10–21 days for inspections and 21–30 days for financing. Your buyer’s agent negotiates the length based on local norms and the complexity of the property. Shorter periods make your offer more competitive but give you less time to investigate. Check our glossary for more on contingencies.
Real-World Example
You enter a due diligence period after going under contract on a $380,000 home in North Carolina, where buyers pay a non-refundable due diligence fee of $3,000 upfront. During the 21-day period, you order a home inspection ($450), termite inspection ($100), radon test ($175), survey ($350), and review the HOA documents. The inspection reveals $8,000 in needed roof repairs. You negotiate a $5,000 price reduction and the seller agrees to fix the remaining $3,000 before closing. Without due diligence, you would have discovered these problems after it was too late to negotiate.
Related Terms
Understanding due diligence connects to several other concepts: Contingency, Home Inspection, Earnest Money, and Appraisal. Each of these terms interacts with due diligence in ways that affect your buying power, monthly costs, or investment returns.
Frequently Asked Questions
Is the due diligence fee refundable?
In most states, the due diligence fee is non-refundable unless the seller breaches the contract. It is separate from earnest money. The fee compensates the seller for taking the property off the market while you investigate. If you back out for any reason during due diligence, you lose the fee but typically get your earnest money back.
What should I investigate during due diligence?
At minimum: professional home inspection, pest/termite inspection, title search, survey, flood zone verification, HOA document review (if applicable), and any environmental concerns. Also verify property taxes, zoning compliance, and outstanding permits. The goal is uncovering every material fact before you commit.