A free guide for buyers and sellers making or reviewing an offer in North Carolina and South Carolina
Almost every buyer hears the terms earnest money and due diligence early in the process, and it is easy to assume they are two deposits toward the same purchase. They are not. They do different jobs, the money is handled differently, and the consequences can look very different if the sale does not close. This edition covers both sides of the state line: the standard North Carolina contract and the common South Carolina contract.
What the Full Guide Covers
- The Explanation in Sixty Seconds
- The Two Standard Contracts
- Earnest Money
- The North Carolina Due Diligence Fee
- South Carolina Due Diligence and the Termination Fee
- Why Buyers and Sellers Want Different Things
- How Long Should the Due Diligence Period Be?
- What Should Happen During the Due Diligence Period?
- Repairs and Negotiations
- Extending Your Due Diligence Period
- How to Terminate Correctly
- What Happens If You Decide to Walk Away?
- Financing Deserves Special Attention
- Closing Date, Delays and Possession
- Other Contract Terms Buyers Ask About
- Seven Practical Rules I Want Every Buyer to Remember
- Choosing the Right Offer Terms
- North Carolina Timeline Checklist
- South Carolina Timeline Checklist
- One Final Perspective
Common Questions
What is Form 2-T?
It is the North Carolina Offer to Purchase and Contract, the standard residential purchase contract jointly approved by the North Carolina Bar Association and North Carolina REALTORS. It sets the Due Diligence Fee, earnest money, Due Diligence Period, Settlement Date and the rights of each side. It was revised again for 2026, so make sure you are reading the current version.
What is a banking day in the North Carolina offer?
The current Form 2-T defines a banking day as Monday through Friday, excluding Saturdays, Sundays and holidays. It matters mostly for the Due Diligence Fee, which is not late until the end of the next banking day after the Effective Date, and for the one banking day you have to pay after a written demand.
When is the North Carolina Due Diligence Fee due?
On the Effective Date. Under the 2026 form, you are not in breach if it arrives by the end of the next banking day. After that, the seller can send a written demand, and if you do not pay within one banking day after that notice, the seller may terminate.
Can the seller refuse showings or inspections until the Due Diligence Fee arrives?
Under the 2026 Form 2-T, yes. Until the fee is delivered, the seller may limit or deny physical access to the property. Pay the fee promptly so your inspection schedule is not delayed.
Can the Due Diligence Fee be zero?
Yes. The form describes it as a negotiated amount, if any. A zero fee still gives you the Due Diligence Period and the right to terminate, but your offer may be less attractive to the seller.
Can the seller pay my Due Diligence Fee?
Not in any practical sense. The fee is money the buyer pays the seller for the right to walk away, so if a seller does not want one, the simple answer is to agree to a fee of zero. Closing cost help from the seller is negotiated separately as a seller concession and is subject to your lender’s limits.
Can a For Sale By Owner seller accept the Due Diligence Fee personally in North Carolina?
Yes. Under Form 2-T, the fee is paid to the seller and becomes the seller’s property on the Effective Date, unless the seller directs in writing that it be paid to someone else. Earnest money is different, and should go to a neutral Escrow Agent named in the contract.
When could my North Carolina Due Diligence Fee be refunded?
Mainly if the seller materially breaches the contract, or if the property is not in substantially the same or better condition at closing and you terminate. Some addenda can add other situations. It is not refunded because you changed your mind, the inspection was bad, or your loan was denied.
If the inspection finds major defects, can I cancel and recover my deposits?
In North Carolina, yes, if you terminate in writing before the Due Diligence Period ends: your earnest money is refunded, but the seller keeps the Due Diligence Fee. In South Carolina, you can terminate by the Due Diligence Deadline by delivering the Notice of Termination and any agreed Termination Fee, and your earnest money is then released back to you by signed agreement.
Is earnest money refundable if I terminate during due diligence?
Yes, in both states, when you terminate properly and on time. In North Carolina, Form 2-T says the earnest money shall be refunded. In South Carolina, it is released through a signed agreement or as the contract provides.
What happens to my earnest money if I terminate after due diligence in North Carolina?
Unless you have another contractual basis, such as seller breach or damage to the property, walking away after the period is generally a buyer breach, and the seller is entitled to the earnest money as liquidated damages. The seller also keeps the Due Diligence Fee.
How long should my due diligence period be?
Long enough to finish everything that could change your mind: inspections, specialist follow up, repair negotiation, insurance quotes, and in North Carolina, the appraisal and real progress on loan approval. Work backward from the slowest task and add a cushion. Your agent can tell you what is common in the current market.
What can I do during the due diligence period?
Inspect the home, get specialist opinions and repair estimates, pursue your loan and appraisal, review disclosures, title, survey, HOA documents, zoning, flood and insurance, and negotiate repairs. Use the timeline checklists in this guide to keep it on schedule.
Can I terminate for any reason during due diligence?
Yes. Form 2-T gives the buyer the right to terminate for any reason or no reason during the Due Diligence Period. Form 310 in South Carolina also lets the buyer terminate for any reason during the Due Diligence Period, with any agreed Termination Fee owed.
How do I terminate correctly?
In writing, delivered as the contract requires, before the deadline: 5:00 p.m. on the last day in North Carolina, and 6 p.m. on the Due Diligence Deadline in South Carolina, together with any Termination Fee. Keep proof of delivery and ask your agent or attorney to confirm receipt.
Does the seller have to fix defects discovered during my inspection?
In North Carolina, no, unless agreed in writing; the property is sold in its current condition. In South Carolina, generally no, unless agreed, although the seller must keep the property in operable condition through closing and the wood infestation paragraph has its own procedure.
What if the seller will not respond to repair requests before my deadline?
Your deadline does not move. Ask for a written extension if you need more time, and if you do not get one, decide before the deadline whether to proceed on current terms or terminate in writing.
What happens if we cannot agree on repairs before the South Carolina due diligence deadline?
You can accept the property as is, agree on an attorney drafted remedy, or terminate with the Notice of Termination and any Termination Fee. If you do nothing by the deadline, the contract becomes as is with regard to repairs.
Can I extend due diligence if my appraisal or loan approval is delayed?
Only if the seller agrees in writing. In North Carolina, the seller is not obligated to grant an extension and may ask for an additional fee. Ask early, and be ready to decide on time if the answer is no.
What risks remain if I continue after due diligence ends without final loan approval?
In North Carolina, there is no loan or appraisal contingency in the standard contract, so a later denial, a low appraisal, or an insurance problem could put your earnest money at risk on top of the Due Diligence Fee. In South Carolina, the financing paragraph may still protect you if you made good faith efforts and notify the seller promptly.
Is the North Carolina contract as is?
The standard form says the property is sold in its current condition unless the parties agree otherwise, and closing means you accept it in its then existing condition. You still have the full Due Diligence Period to inspect and decide.
Who holds earnest money in North Carolina?
The Escrow Agent named in the contract, usually a real estate firm’s trust account or the closing attorney’s trust account. The money stays in escrow until closing or until it is disbursed as the contract requires.
When is earnest money due?
In North Carolina, the Initial Earnest Money Deposit is due to the Escrow Agent within five days of the Effective Date, and any Additional Earnest Money is due by 5 p.m. on the date in the contract, with time of the essence. In South Carolina, part may accompany the offer and the balance is due by 6 p.m. on the date in the contract.
What is earnest money in a South Carolina purchase?
It is a good faith deposit held by an Escrow Agent and credited to you at closing. If the deal ends, it is disbursed only as the parties agree in writing, as a court orders, or as the contract provides.
Who holds escrow in South Carolina?
The Escrow Agent named in the contract, typically a real estate brokerage’s trust account or a closing attorney. A brokerage escrow agent will not release funds to either party without a signed disbursement agreement, a mediation agreement, or a court order.
Is there a due diligence fee in South Carolina?
Not usually in the North Carolina sense. Instead, the common SC contract has an optional Termination Fee that you pay only if you terminate during the Due Diligence Period for due diligence reasons.
When would I owe a South Carolina due diligence Termination Fee?
Only if you terminate during the Due Diligence Period for due diligence reasons. You do not owe it if you close, and the form says it is not owed if you terminate under another contingency such as financing or appraisal.
Is earnest money refundable in South Carolina?
It can be. If you terminate properly under the contract, the earnest money is typically released back to you through a signed disbursement agreement. If there is a dispute, it stays in escrow until the parties agree or a court decides.
How are earnest money and a Termination Fee handled if I cancel in South Carolina?
Pay the Termination Fee directly to the seller with your Notice of Termination by the deadline, then sign the release so the Escrow Agent can return your earnest money. Relying on the earnest money to cover the fee can cause timing problems.
How does South Carolina due diligence differ from North Carolina?
In North Carolina, you pay the Due Diligence Fee up front and the seller keeps it if you walk away. In South Carolina, you usually pay nothing up front and owe the Termination Fee only if you walk away. South Carolina’s contract also has financing and appraisal provisions that the standard North Carolina contract does not.
How is buying in South Carolina different from North Carolina?
Beyond due diligence, the contracts differ on financing and appraisal protection, deadline times (6 p.m. in SC, 5 p.m. in NC), wood infestation reports, and what happens if you miss the deadline. Both states use attorney supervised closings, and the buyer typically chooses the closing attorney.
What financing, appraisal and inspection protections are actually in my contract?
Read the contract’s financing, appraisal and due diligence paragraphs with your agent. In South Carolina, Form 310 has a financing paragraph, an appraisal checkbox, a Due Diligence Period and a wood infestation paragraph. In North Carolina, the standard form relies on the Due Diligence Period alone unless you add an addendum.
What contingencies should a South Carolina offer include?
That depends on your situation, but buyers commonly rely on the due diligence period, the financing paragraph if they are borrowing, the appraisal contingency, and the wood infestation report. A buyer who must sell a current home first may need a separate contingency addendum. Talk through each one with your agent.
How long is a typical inspection period in South Carolina?
The contract does not set one. The Due Diligence Deadline is a date the parties negotiate, so plan backward from inspections, specialist follow up and repair negotiation. Your agent can tell you what is common for your price range right now.
Can I cancel after the inspection in South Carolina?
Yes, if you do it by the Due Diligence Deadline using the Notice of Termination and pay any agreed Termination Fee. After the deadline, the due diligence right is gone, though other contingencies may still apply.
What happens if I miss the South Carolina inspection deadline?
If you have not accepted, negotiated a signed repair agreement, agreed to an attorney drafted remedy, or terminated by 6 p.m. on the deadline, the contract becomes as is with regard to repairs. You remain under contract.
Does the seller have to make repairs in South Carolina?
Not unless the seller agrees. The seller must keep the property in operable condition through closing and complete any agreed repairs, and the wood infestation paragraph sets out its own steps if treatment or repairs are needed.
Who supervises my South Carolina closing and explains the legal documents?
A licensed South Carolina attorney, who must supervise the title work, the closing, recording and disbursement. The common contract lets the buyer select the closing attorney. See the SitRep Realty guide on the Carolina attorney closing for more.
Do I need a South Carolina real estate attorney at closing?
Yes. South Carolina treats residential closings as the practice of law, so a licensed South Carolina attorney must supervise the closing. A seller may also hire a separate attorney.
Can I assign the contract to my LLC?
In North Carolina, not without the written consent of all parties, except for a tax deferred exchange. It is usually simpler to name the LLC as the buyer from the start. Check with your lender first, since most home loans for a primary residence are made to individuals.
Can I close in the name of an LLC in South Carolina?
It is possible, but plan ahead. Form 310 has no separate assignment paragraph, lenders have their own rules, and cash purchases by entities may trigger federal reporting. Discuss it with your closing attorney, lender and tax advisor before you sign.
What is the settlement date versus the closing date?
In North Carolina, Settlement is signing and delivering all documents and funds to the closing attorney, and Closing is when the deed is recorded and title transfers. In South Carolina, Form 310 uses a single Closing Date by which closing must be completed.
What happens if I cannot close on time?
In North Carolina, Form 2-T gives the delaying party up to seven days after the Settlement Date to finish; after that, the other party may terminate. In South Carolina, time is of the essence and there is no automatic delay, so you need a signed amendment.
What are the risks if the buyer asks for more time before closing?
More days off the market, more carrying costs, possible effects on your own move, and sometimes a warning sign about the buyer’s loan. If you agree, use a signed amendment with a firm new date, and talk with your attorney about asking for something in return.
What happens if the house is damaged before closing?
In North Carolina, risk of loss stays with the seller until closing, and you may terminate and receive your earnest money and Due Diligence Fee back if the property is not in substantially the same condition. In South Carolina, either party may terminate within 14 calendar days after notice, or the seller repairs or assigns the insurance proceeds.
What happens to the deposits if my buyer cancels?
During the North Carolina Due Diligence Period, you keep the Due Diligence Fee and the earnest money goes back to the buyer. During the South Carolina Due Diligence Period, you receive any agreed Termination Fee and the earnest money is released to the buyer. After the period, a cancellation without a contractual reason generally entitles a North Carolina seller to the earnest money as liquidated damages.
Can I keep the Due Diligence Fee if the North Carolina buyer walks?
Yes, in most cases. The fee became yours on the Effective Date. It must be refunded only in limited situations, such as your own material breach or a change in the property’s condition.
Can I keep the earnest money if the buyer defaults?
In North Carolina, a seller is entitled to the earnest money as liquidated damages for a buyer’s material breach, as the seller’s sole remedy. In South Carolina, remedies depend on the default paragraph. In either state, the escrow agent needs a signed release or a court order before the money moves if the buyer disputes it.
What if the buyer’s loan is denied?
In North Carolina, there is no loan contingency in the standard form, so a denial after the Due Diligence Period can be a buyer breach that entitles the seller to the earnest money. In South Carolina, if the buyer made good faith efforts and notifies the seller promptly, either party may terminate under the financing paragraph.
What if the buyer will not release the deposit?
The escrow agent cannot pick a side. In North Carolina, if the dispute is not resolved, the Escrow Agent may deposit the money with the clerk of court or disburse it as North Carolina law allows. In South Carolina, a broker holds it until there is a signed agreement, mediation agreement or court order. A real estate attorney can explain your options.
What if the buyer disappears before closing?
Do not assume the contract has ended. Communicate in writing, involve your closing attorney, and follow the contract’s notice, delay and default steps. Only after the contract is properly terminated should you sign with another buyer.
Who should hold earnest money, and how should deposit instructions be documented?
A neutral Escrow Agent named in the contract, such as the closing attorney or a real estate firm’s trust account. The contract should state the amount, due date, method of payment, holder, and what happens to the money if the deal ends, and you should get a written receipt.
What happens at an attorney closing in the Carolinas?
The closing attorney searches title, prepares or reviews the documents, collects funds, supervises signing, records the deed, and disburses the money. See the SitRep Realty guide on the Carolina attorney closing for a full walkthrough.
Can old mineral rights affect me?
They can. If mineral, oil or gas rights were separated from the land years ago, someone else may hold rights tied to the property. North Carolina sellers must give you a mandatory disclosure statement on this, and your closing attorney can tell you what the title search shows.
Should I buy in North Carolina or South Carolina?
It depends on your budget, commute, schools you want to consider, and your total monthly cost, including property taxes, income taxes, insurance and HOA dues, which differ by state and county. Compare full monthly costs, not just prices. For a deeper comparison, see the SitRep Realty guide on buying on either side of the state line.
Is living on the South Carolina side of Charlotte really less expensive overall?
Sometimes, but not always. Home prices, property tax treatment, income taxes, insurance and commuting costs all differ, and they affect each household differently. Ask a tax advisor and your lender to help you compare real numbers for the homes you are considering.
How much due diligence money should I offer without risking more than I can lose?
Choose an amount you could lose and still buy another home, then adjust for how likely you are to walk away and how solid your financing is. A shorter period and a larger fee raise your risk at the same time, so do not stretch on both.
Get the Complete Guide
What each payment does, when it is at risk, how the deadlines work in both states, and how to structure an offer you can stand behind. It is free from the SitRep Realty Intel Hub Library.
This page provides general real estate information for North Carolina and South Carolina. It is not legal, tax, lending or insurance advice and does not create an agency relationship. Laws and forms change, and every property is different, so consult a licensed real estate broker and, where appropriate, a licensed real estate attorney about your situation. SitRep Realty is a member of the DW Realty Team. Equal Housing Opportunity.
