One of the main topics of discussion between myself and clients that are unfamiliar with North Carolina Real Estate is: what is Due Diligence?  If you’re familiar with the phrase “caveat emptor” you’ll know it means buyer beware.  This concept of caveat emptor applies to all buyers purchasing real estate in our state, and because of that, gives those buyers the opportunity to conduct their due diligence on a property once going under contract.  The due diligence period is a mutually agreed upon time frame in the offer to purchase and contract, between the buyer and seller, in which the buyer is allowed to reasonably inspect the property to their standard of satisfaction.  This can include, but is not limited to, a home inspection, survey of the property, appraisal of the property, etc.  It can be any number of days (including 0 days) and has a defined expiration date and time. Ultimately, this gives the buyer the option of backing out of the transaction, any time prior to the expiration of the due diligence period, for any or no reason at all.  This is done so at the risk of the due diligence fee.  The fee is a mutually agreed upon monetary amount (including $0.00) defined in the offer to purchase and contract, that the buyer pays directly to the seller for taking their property off the market so buyer can inspect.  If the buyer opts to back out of the contract prior to the end of the expiration of the due diligence period, this fee is kept by the seller and the buyer is relieved of any further contractual obligation to complete the transaction.  If the buyer wishes to proceed past the due diligence period’s expiration, that fee is then credited back to them at the closing table and applied towards the purchase price.  Now that you are more familiar with these items, it is important to understand how to properly utilize them in the marketplace and that’s where having a knowledgeable real estate professional at your side will give you a considerable advantage when evaluating these terms, for both buyers and sellers.