Writing an offer on a Wilmington home and wondering how much cash you need upfront? You are not alone. North Carolina uses two separate deposits that work differently, and understanding them early can save stress and money. In a few minutes, you will learn what due diligence and earnest money are, how refunds work, what is typical in New Hanover County, and how to plan your budget with confidence. Let’s dive in.
Due diligence vs. earnest money
Due diligence fee
- A one-time payment from you directly to the seller when your offer is accepted.
- It buys your exclusive right to inspect and to terminate the contract for any reason during the agreed due diligence period.
- It is typically nonrefundable to you. If you cancel during the due diligence period, the seller keeps this fee.
- At closing, this fee is credited to the seller as part of the seller’s proceeds.
Earnest money deposit
- A good-faith deposit that shows you intend to close, held in escrow by a brokerage, title company, or attorney.
- If you terminate as allowed by the contract, it is typically refundable to you.
- If you breach the contract after contingencies expire, the seller may be entitled to keep it as liquidated damages.
- At closing, it is applied to your cash due at closing, such as down payment or closing costs.
Key difference: The due diligence fee goes to the seller and is usually not returned to you. Earnest money is held in escrow and can be refundable if you end the contract within the rules set by the contract.
What to expect in Wilmington
Wilmington and coastal New Hanover County see seasonal demand, second-home shoppers, and multiple-offer situations in popular areas. In competitive moments, buyers often strengthen offers with larger due diligence fees and larger earnest money. If you are new to the area, plan to have cash available for both deposits at the time you write an offer.
Typical deposit amounts
There is no state-required percentage. Amounts are negotiated and driven by the market.
- Due diligence fee: often several hundred to several thousand dollars. In hot situations, some buyers offer about 1 percent of the price as a rule of thumb.
- Earnest money: commonly about 1 percent of the purchase price or a flat amount, such as 1,000 to 5,000 dollars. Higher-priced homes or tight competition can push this higher.
Illustrative Wilmington scenarios:
- Entry-level listing: due diligence about 1,000 dollars and earnest money about 1,000 dollars, for about 2,000 dollars total upfront.
- Mid-priced home at 300,000 to 500,000 dollars: due diligence 2,000 to 5,000 dollars and earnest money around 1 percent, for about 5,000 to 10,000 dollars total.
- Highly competitive or waterfront: due diligence 0.5 to 1 percent and earnest money 1 percent or more.
Your exact numbers should match the property, your risk comfort, and the competition.
Timelines and who gets what
All dates are negotiated in the contract.
- Offer acceptance: your offer proposes a due diligence fee amount and due diligence period length.
- Delivery of funds: the contract sets a deadline to deliver earnest money to escrow, commonly within a few business days.
- Due diligence period: often 7 to 14 days, but it can be longer or shorter. Use this time for inspections, quotes, and research.
- Financing and appraisal dates: if included, these have their own deadlines.
- Closing date: when title transfers and funds are disbursed.
If you cancel during due diligence
- You can terminate for any reason within the due diligence period.
- The seller keeps the due diligence fee.
- Earnest money is typically returned to you through normal escrow procedures.
If you cancel after the period ends
- Earnest money depends on the contract. If you do not have a valid contingency, the seller may be entitled to keep your earnest money and may pursue other remedies.
- The due diligence fee is already with the seller and is generally not recoverable unless the seller breached the contract.
If the seller defaults
- If the seller breaches, you can typically recover earnest money and may seek other contract remedies.
- The due diligence fee is handled according to the contract or by agreement. Buyers often seek its return in a seller default.
Budgeting for both deposits
Plan your cash so you can move fast when the right home hits the market.
Buyer checklist:
- Confirm available funds for both deposits before touring.
- Ask your bank how to send a certified check or wire quickly.
- Set calendar reminders for delivery deadlines and contingency dates.
- Coordinate with your lender about documenting earnest money, since some lenders request proof.
Strategy tips for buyers
- Lead with clarity: decide your due diligence fee, earnest money, and due diligence period before you offer.
- Balance risk and leverage: larger deposits can strengthen your offer, but a larger due diligence fee is money you likely will not get back if you cancel after the period ends.
- Right-size the timeline: choose a due diligence period that fits inspections, quotes, and lender milestones without wasting days.
- Keep contingencies clean: confirm deadlines in writing so you know exactly when refund rights change.
Tips for sellers
- Evaluate the whole package: fee amounts, due diligence period length, and earnest money all affect certainty.
- Value time: a higher due diligence fee plus a shorter due diligence period often signals a committed buyer.
- Know escrow basics: earnest money is held in trust and released according to the contract or mutual agreement.
Common mistakes to avoid
- Mixing up refunds: assuming the due diligence fee comes back if you find issues. The seller keeps it if you cancel during the period.
- Delivering funds late: missing the earnest money delivery deadline can put you in default.
- Overextending cash: offering a large due diligence fee without a plan for inspections, appraisal, and insurance timing.
- Skipping lender coordination: waiting to ask how earnest money is documented or applied at closing.
Ready to talk strategy?
If you are planning to buy or sell around Wilmington or the Topsail Island corridor, get local guidance on deposit amounts, timelines, and negotiation strategy tailored to your goals. Connect with Joseph Zuba to schedule a free consultation and move forward with confidence.
FAQs
What is the due diligence fee in North Carolina?
- It is a negotiated, one-time payment from you to the seller at acceptance that buys you the right to inspect and to cancel for any reason during the due diligence period; it is typically nonrefundable to you.
How is earnest money handled in Wilmington, NC?
- It is placed in escrow with a brokerage, title company, or attorney and is applied to your cash due at closing; it is typically refundable if you terminate within valid contract contingencies.
What are typical deposit amounts for Wilmington homes?
- Due diligence often ranges from several hundred to several thousand dollars, and earnest money is commonly about 1 percent of price or a flat 1,000 to 5,000 dollars, with higher amounts in competitive situations.
How long is the due diligence period in NC contracts?
- It is negotiated, commonly 7 to 14 days, and is used to complete inspections, quotes, and other research before you decide to move forward.
Do I get my due diligence fee back if I cancel after inspections?
- If you cancel during the due diligence period, the seller keeps the due diligence fee and your earnest money is typically returned; after the period, refunds depend on remaining contingencies.
Does the due diligence fee reduce my down payment at closing?
- No. The due diligence fee is credited to the seller at closing. Earnest money is credited to you and reduces the cash you bring to close.
When do I have to deliver earnest money in NC?
- Your contract sets the deadline. Many brokerages expect delivery within a few business days of acceptance, so plan ahead to avoid delays.
