There are two different deposits in North Carolina. So when a buyer asks if they can get their deposit back, we have to qualify which deposit they are actually talking about.

(Please read my article explaining about the different deposits here.)

Before we even talk about getting deposits back, let me begin by clearing up a common confusion: no checks are given to the seller or attorney UNLESS your offer is accepted by the seller and they have signed the contract. You do not need to hand over a check just to submit an offer. So please do not panic about this. You will hold onto your checks until your agent (that’s me) tells you to hand them over to give to the appropriate parties.

Now onto whether or not you can get these deposits back while under contract.

Here are the most common questions associated with deposits:

• Can I get the deposits back if the house does not appraise for the offer price?
  • Due Diligence = No. The seller always gets to keep this if you walk away from the transaction.
  • Earnest Money = Yes if you walk away from the transaction before 5pm on the final day of the due diligence period.
• Can I get the deposits back if the home inspection shows something bad and the seller won’t fix it?
  • Due Diligence = No. The seller always gets to keep this if you walk away from the transaction.
  • Earnest Money = Yes if you walk away from the transaction before 5pm on the final day of the due diligence period.
• Can I get the deposits back if I simply change my mind?
  • Due Diligence = No. The seller always gets to keep this if you walk away from the transaction.
  • Earnest Money = Yes if you walk away from the transaction before 5pm on the final day of the due diligence period.
• Can I get the deposits back if we find out the seller and agent were hiding something bad about the house (a material fact)?
  • Due Diligence & Earnest Money = Yes. If the seller or agent withheld serious material facts about the home, you can get your deposits back as well as liquid damages for any money spent on inspections, appraisals, attorney, etc.
• Can I get the deposits back if the seller walks away from the transaction?
  • Due Diligence & Earnest Money = Yes. If the seller is no longer willing to sell the home, you can get your deposits back as well as liquid damages for any money spent on inspections, appraisals, attorney, etc.

Simply stated: it is nearly impossible to get the due diligence fee back. You generally only get the due diligence back if the seller breaches the contract (does not sell you the property), withholds material facts (difficult to prove) or if something terrible happens to the home before closing (a fire) and the seller refuses to fix it.

If you walk away from the transaction before 5pm on the last day of due diligence, you may be able to get the earnest money deposit back. (There are one or two hoops that you have to jump through for this to happen, but it generally works out in the buyer’s favor.) If you walk away after 5pm on the last day of due diligence, then the seller gets to keep this deposit also.

I know… this doesn’t seem fair to buyers. We agents agree with you. It is simply how the contract is written. Unfortunately, in the current seller’s market, the due diligence deposits in our area are very very high. Walking away from a $20k due diligence can be frightening. We agents sympathize with you… unfortunately we are not in control of the situation. The only thing we can do is educate and protect you as best as possible. That is our number one priority.

Please let me know if you have any questions about this topic and I will be happy to discuss it with you in more detail.

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If you are interested in finding out how I can assist you with your real estate needs, click this Calendly Link to book time for us to chat.

Relocating to the Cary area? Click here for the Cary Relocation Guide.

Thinking of selling your home? Click here for the Seller’s Guide.

Learn More:

• Click here to learn more about the Due Diligence Fee.
• Click here to learn more about the Earnest Money Deposit.
• Click here to learn more about the benefits of having a buyer’s agent.
• Click here to learn more about the benefits of having a seller’s agent.

Happy Home Buying & Selling In North Carolina!