Buying a home in North Carolina comes with a few terms that can catch buyers—especially out-of-state buyers—off guard. In this episode of the Lake Norman Home Team Podcast, Melissa and Eric Sanchez break down two of the most misunderstood parts of a purchase contract: due diligence and earnest money.
They explain how these two deposits work very differently, why North Carolina’s due diligence fee is more like a non-refundable commitment than a traditional deposit, and how it functions as both protection for buyers and a powerful negotiating tool for sellers. The conversation dives into real-world scenarios, multiple-offer strategies, and how “intent” plays a major role in writing a strong offer.
Melissa and Eric also walk listeners through what actually happens during the due diligence period—inspections, surveys, lender coordination, and common issues that appear on inspection reports (yes, GFCIs and caulking make an appearance). For first-time buyers, they offer practical advice on how to interpret inspection reports without panic and how a good buyer’s agent helps separate real issues from normal wear and tear.
The episode wraps with a clear discussion of timelines, refunds, risks, and why preparation—especially with your lender—matters more than most buyers realize.
If you’re considering buying in Lake Norman or relocating to North Carolina, this episode provides essential clarity before you ever write an offer.
Melissa & Erik Sanchez are leading Lake Norman, NC real estate brokers.
Melissa Sanchez & Associates | Coldwell Banker Realty Lake Norman
Address: 129 Mecklynn Rd Ste E, Mooresville, NC 28117
Phone: (704) 775-0258
Due Diligence and Earnest Money in North Carolina
Buying a home in North Carolina is different from many other states, and one of the biggest differences is the use of due diligence alongside earnest money. For buyers relocating to the Lake Norman area—or even local buyers who haven’t purchased in years—these terms can feel confusing at first. Understanding how they work is critical to making a confident, informed offer.
In North Carolina, a purchase contract typically includes two separate payments: a due diligence fee and an earnest money deposit. While they’re often mentioned together, they serve very different purposes.
The due diligence fee is paid directly to the seller once the contract is executed. It is generally non-refundable and functions as compensation to the seller for taking the home off the market. In return, the buyer receives a defined period of time—often two to three weeks—to fully investigate the property. This includes home inspections, radon testing, surveys, insurance review, and final loan approval. During this period, the buyer can walk away for any reason or no reason at all, but the due diligence fee is forfeited.
Earnest money works differently. The earnest money deposit is held in escrow, usually by a real estate firm or closing attorney, and is credited toward the purchase price at closing. If the buyer terminates the contract during the due diligence period, the earnest money is typically refunded. However, if the buyer walks away after the due diligence period ends, they risk losing both the due diligence fee and the earnest money.
In competitive markets like Lake Norman, due diligence has become a powerful negotiating tool. A strong due diligence fee signals intent. It tells the seller that the buyer is serious and prepared to move forward. In multiple-offer situations, this can be the difference between an offer being accepted or passed over—even if the purchase price is similar.
There is no fixed formula for how much due diligence or earnest money a buyer should offer. The right amount depends on the property, the competition, and the buyer’s comfort level with potential risk. A helpful question buyers should ask themselves is: What amount am I comfortable forfeiting if I choose to walk away?
The due diligence period is also when buyers incur other non-refundable costs, such as inspections, appraisals, and surveys. That’s why working with an experienced local agent matters. Clear guidance helps buyers interpret inspection reports calmly, coordinate timelines with lenders, and avoid unnecessary risk.
In North Carolina, due diligence isn’t about pressure—it’s about clarity. When buyers understand the process, they’re able to move forward with confidence and intention.
Melissa & Erik Sanchez are leading Lake Norman, NC real estate brokers.
Melissa Sanchez & Associates | Coldwell Banker Realty Lake Norman
Address: 129 Mecklynn Rd Ste E, Mooresville, NC 28117
Phone: (704) 775-0258