08/29/2026
Ask and Asheville #7: "What is due diligence money in North Carolina?"
If you're buying a home in North Carolina, you're probably going to hear the phrase ādue diligence moneyā pretty quickly.
And if you're a first-time buyer, you might be thinkingā¦
āWait⦠I'm giving the seller money just to look at the house?ā
Not exactly. š
Due diligence money is an amount the buyer agrees to pay the seller directly when the contract is signed.
In exchange, the buyer gets the due diligence periodāa negotiated period of time to do things like inspections, review documents, investigate the property, and make sure the home is actually the right fit. It also removes the sellers home status on the MLS from "active" to "active under contract" or "contingent". Most buyers are not going to look at a property listed this way because there's a high probability they won't get the house.
Who want to fall in love with a house they know they probably won't get?
Here's the important part:
Due diligence money is generally non-refundable if the buyer terminates the contract during the due diligence period. It is typically credited toward the purchase price at closing if the transaction closes.
So how much should you offer?
There's no magic number. It depends on the property, the market, how competitive the offer is, and your overall strategy.
And this is one of those areas where understanding the why behind the numbers matters just as much as knowing the numbers themselves.
Buying a home is a big financial decision. You shouldn't have to nod along to real estate terminology and hope someone explains it later.
That's what is all about.
Have a real estate term you've always wondered about? Drop it belowāI might answer it next!