Thinking of making an offer on a home in Asheville? You will hear the term “due diligence money” right away, and it can feel confusing if you have bought in other states. You want to be competitive without putting too much cash at risk. In this guide, you will see what due diligence money is, how it compares to earnest money, what to expect in Buncombe County, and the steps to protect yourself while writing a strong offer. Let’s dive in.
Due diligence money explained
Due diligence money is a negotiated fee you pay the seller when your offer is accepted. In return, you get an unrestricted right to terminate the contract during the due diligence period. If you close on the home, the seller credits this amount to you at closing. If you walk away within or after that period, the fee generally stays with the seller.
The due diligence period and the fee are terms written into the standard North Carolina Offer to Purchase and Contract. Because this is contractual, the exact amount and the timeline are negotiable. Your strategy depends on the property, the market conditions, and your comfort with risk.
Earnest money vs due diligence
These two payments serve different purposes:
- Purpose: The due diligence fee compensates the seller for taking the home off the market while you investigate. Earnest money shows your commitment and backs up the seller’s remedies if you default after the due diligence period.
- Where funds go: The due diligence fee is typically delivered to the seller or the seller’s attorney. Earnest money is held in escrow by the listing broker or a closing attorney.
- Refundability: The due diligence fee is generally nonrefundable to you if you terminate, but it is credited at closing. Earnest money is usually refundable if you terminate properly within the due diligence period and may be forfeited if you default after it ends.
Why it matters in Asheville
Asheville’s competitiveness changes how you structure your offer. In multiple-offer situations, buyers often propose a shorter due diligence period and a higher due diligence fee to stand out. In a slower segment, buyers may ask for a longer period with a smaller fee. Understanding current norms helps you find the right balance for the neighborhood and price point you are targeting.
Due diligence period tasks
The due diligence period is your window to investigate the property and make decisions. You can terminate for any reason within this period, but the fee typically stays with the seller. Use this time to complete key checks and, if needed, negotiate repairs or price adjustments.
Your core to-do list usually includes inspections, reviewing disclosures and reports, checking permits and improvements, and confirming insurance, title, and HOA information. Book inspectors immediately so you have time for results, contractor opinions if needed, and negotiations.
Financing and appraisal timing
Financing and appraisal often take longer than you expect. Coordinate with your lender up front so the appraisal, underwriting, and any conditions can be cleared within your due diligence window or so your contract includes language that protects you if they cannot be completed by then. If your loan fails after the due diligence period and you do not have protective terms, you could be at risk of forfeiting your earnest money.
Typical Asheville ranges
Every offer is different, but here are common local patterns:
- Due diligence period: Often 7 to 14 days for resale homes. In hot listings, buyers sometimes offer 3 to 5 days. Longer windows happen on new construction or when buyers are out of area.
- Due diligence money: From a few hundred dollars on less competitive deals to several thousand on typical single-family homes. On popular Asheville properties, buyers often offer about $1,000 to $10,000, with higher numbers on pricier homes.
- Earnest money: Often a flat amount or a percentage of the price, commonly in the 1 to 3 percent ballpark.
These are guidance ranges, not rules. Your final numbers should match the property, your budget, and the competition.
Refunds, credits, and defaults
- If you terminate during the due diligence period: You usually receive your earnest money back, and the seller keeps the due diligence fee. If you close, the due diligence fee is credited to you at settlement.
- If you terminate after the due diligence period without a contractual basis: You may be in default. The seller may keep your earnest money and will also keep the due diligence fee.
- If the seller breaches: You can pursue remedies allowed in the contract, including return of your earnest money. Treatment of the due diligence fee depends on the reason for termination and the contract terms.
Because these outcomes are contract based, dates and delivery methods matter. Make sure funds are paid on time and notices are delivered as written.
Offer strategies to balance risk
Use these tactics to stay competitive without overexposing your cash:
- Right-size your due diligence fee: Offer enough to signal commitment while fitting your budget. Consider higher DD on premium listings with multiple offers, and more moderate DD when competition is lighter.
- Pair a shorter period with a fast inspection plan: If you shorten the period, book inspections in the first 48 to 72 hours so you have time to negotiate or decide.
- Align with your lender and appraiser: Ask your lender for realistic timelines. If timing looks tight, discuss contract language that addresses financing or appraisal delays.
- Increase earnest money instead of DD when appropriate: A larger earnest deposit shows strength but sits in escrow. Choose this lever if you prefer to limit nonrefundable exposure.
- Clarify access and deadlines in writing: Confirm days and times for access so vendors can get in quickly. Put start and end dates in the offer to avoid confusion.
- Use inspection findings to negotiate: If material issues appear, ask for repairs or credits within the due diligence window rather than walking away.
Buyer budget checklist
Plan for three buckets of cash during your offer and due diligence:
- Due diligence fee: Nonrefundable if you terminate, credited at closing.
- Earnest money deposit: Escrowed per the contract, refundable if you terminate properly within the due diligence period.
- Out-of-pocket costs: Inspections, radon, pest, septic, well testing, appraisal, and any specialist evaluations.
For a mid-range Asheville home, buyers sometimes offer a due diligence fee between about $2,000 and $5,000 and earnest money near 1 to 2 percent of price. Choose numbers that match current conditions and your comfort level.
Common pitfalls to avoid
- Waiting to schedule inspections: Vendors book up fast, which can compress your decision time.
- Overly short due diligence with slow financing: If your lender needs more time, you could face tough choices after the deadline.
- Missing payment deadlines: Late delivery of due diligence or earnest money can create default issues. Pay promptly and get receipts.
- Assuming repairs are guaranteed: Sellers are not required to agree to repairs. Use your window to negotiate, then decide with clear eyes.
- Vague dates and times: Ambiguous start or end dates cause conflicts. Write exact dates and cut-off times into the offer.
First 7 days plan
If you agree to a shorter due diligence period, move fast and stay organized.
- Day 0 to 1: Sign contract, deliver due diligence fee and earnest money per the contract. Confirm due diligence start and end dates in writing.
- Day 1 to 2: Book general home, radon, and pest inspections. If applicable, schedule septic, well, or structural evaluations. Share access needs with the listing side.
- Day 2 to 3: Complete inspections. Ask inspectors if any specialists should evaluate issues. Send your lender updated documents and request appraisal order.
- Day 3 to 4: Review reports. Price out repairs with vendors as needed. Decide on repairs or credits you will request.
- Day 4 to 5: Submit repair request or price adjustment. Keep your lender updated on any changes.
- Day 5 to 6: Negotiate and finalize next steps. If concerns remain, decide whether to proceed or terminate before the deadline.
- Day 7: Confirm you are on track for appraisal and loan milestones. If you are not, revisit strategy before your window closes.
How this plays out in Asheville
In a competitive East Asheville or Biltmore Park listing, you might choose a 5 to 10 day due diligence period with a stronger due diligence fee to rise above other offers. That approach works best when your inspector and lender can move fast and you are comfortable with the home’s condition based on disclosures and early signs. In a slower segment or on a home that has been on market longer, you can often negotiate a longer period and a smaller fee, which lowers your upfront risk.
Your path is personal. What matters is matching the property’s market position with your timing, financing, and repair comfort.
Ready for local guidance?
You do not have to guess your way through due diligence. Get a clear plan, fast vendor scheduling, and offer terms aligned to Asheville’s current norms. Reach out to Rebecca Lafunor for a practical, step-by-step strategy tailored to your goals.
FAQs
What is due diligence money in North Carolina?
- It is a negotiated fee paid to the seller for your unrestricted right to terminate during the due diligence period, and it is typically credited back to you at closing if you proceed.
How is earnest money different from due diligence money?
- Earnest money is held in escrow and is usually refundable if you terminate within the due diligence period, while due diligence money is paid to the seller and is generally nonrefundable if you walk away.
What are typical Asheville due diligence timelines?
- Many resale deals use 7 to 14 days, with 3 to 5 days on highly competitive homes and longer windows for new construction or complex properties.
How much due diligence money should I expect to offer?
- Local practice varies, but buyers often offer from about $1,000 to $10,000 on popular Asheville homes, with higher amounts for higher price points.
Do I get my earnest money back if I cancel during the period?
- Under standard contract terms, yes, if you terminate properly within the due diligence period your earnest money is typically refunded to you.
What happens if my loan or appraisal runs past the due diligence deadline?
- If financing or appraisal is not resolved by the deadline and you lack protective contract language, you may be unable to terminate without risking your earnest money.
