Due Diligence Fee vs. Earnest Money Deposit – Explained in a Simple Video.
Watch our quick explainer video to understand these important terms for homebuyers in North Carolina. Knowing the difference can help you navigate the buying process with confidence.
Understanding Due Diligence Fee vs. Earnest Money Deposit in Real Estate
In North Carolina’s real estate market, two important terms often come up for homebuyers: the Due Diligence Fee and the Earnest Money Deposit. While they may seem similar, each serves a unique purpose in the home buying process, offering different types of protections and commitments.
The Due Diligence Fee is a non-refundable payment made directly to the seller. It’s essentially a show of commitment from the buyer, allowing them time to conduct inspections, secure financing, and fully evaluate the property. During this period, the property is held for the buyer’s review, and the seller agrees not to accept other offers.
The Earnest Money Deposit, on the other hand, is a refundable deposit held in escrow until closing. This amount is typically larger than the Due Diligence Fee and is intended to reinforce the buyer’s serious intent to purchase. However, unlike the Due Diligence Fee, this deposit can be returned if the buyer decides not to proceed with the purchase under certain conditions outlined in the contract.
Understanding these terms and their roles can provide clarity and confidence in the buying process. For a deeper look, check out our video, where I explain how both fees work together to protect you and guide you towards a successful home purchase.
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