Difference between DD and Earnest Money in NC Real Estate
Published 2023-03-16
The DD fee is paid directly to the sellers, in return for their taking the property off the market so that you, the buyer, can inspect and investigate the home. This fee shows how much skin you have in the game, as it remains with the sellers should you choose to terminate the contract during the due diligence period, so make sure it's an amount you're willing to risk. Or better yet, make sure you love the home as much as you think you do before you even make the offer!
(Here's a bit of trivia: Most people know within the first 8 seconds of entering a house whether or not it "feels like home"!)
The earnest money is an amount that is paid to the closing attorney's office and is held in escrow until the date of closing, at which time it is credited to the purchase price. You are entitled to get this money returned to you, should you terminate within your due diligence period. If you choose to terminate after the due diligence period is over, the sellers are entitled to keep it.