CHARLOTTE NC–As of January 2011, there have been some significant changes to the North Carolina real estate industry. The most obvious one is the addition of the Due Diligence clause which replaces the traditional contingencies for loan approval and inspections.
Now in the Charlotte NC real estate contract, the buyer requests a certain amount of time called the Due Diligence period in exchange for an amount of money called a Due Diligence Fee.
An Important Point About the New Charlotte NC Real Estate Contract
There are a couple of important points to mention about this Due Diligence Fee. It is non-refundable and paid directly to the seller. That means that no matter if the buyer follows through to buy the house or not, the seller keeps the Due Diligence Fee. If the buyer does purchase the house the Due Diligence Fee counts as a credit to the buyer at closing.
Your next question may be How much is this due diligence fee?The short answer is that it is negotiable. I’ve noticed a wide range of amounts–everything between a couple hundred dollars to a full mortgage payment. Over time the Charlotte NC real estate market will dictate what these amounts will average out to be. It will be partially dependent on the circumstances of the transaction. For instance in a Charlotte short sale often there is no due diligence fee at all since the contract must be approved by the seller’s lender.
Also in a Charlotte NC short sale the seller cannot make any money in the transaction, so a due diligence fee paid to them might be against the lender’s rules.
What Comes Next With the Charlotte NC Real Estate Contract?
The effects of the Due Diligence Clause in the Charlotte NC real estate contract will unfold over time. As more and more contracts are written, certain trends will show up. As is the case in our industry the market will dictate the future of this particular part of the process. We’ll keep you posted as we notice more trends with this interesting new development in the industry.