The highest number is the first thing everybody looks at, and it is not the thing that decides it.
An offer is a package
Price is one line in it. The rest is the due diligence fee, the earnest money, the closing date, the financing, what the buyer is asking you to fix or pay for, and how much room they have left themselves to walk away.
A cash offer somewhat under asking with a short due diligence period is often worth more than the highest number on the table, because it is far more likely to actually close.
That matters more here than inland. Coastal deals come apart on things that have nothing to do with the buyer’s credit — a wind or flood quote that lands higher than they budgeted, an appraisal that does not support waterfront pricing, a lender that will not write on a property with heavy short-term rental use. I would rather you took a solid offer than the highest one.
The two payments, and why they are not the same thing
In North Carolina there are usually two sums of money in an offer, and they behave differently.
- The due diligence fee. A negotiated amount paid by the buyer directly to you for the right to investigate the property. It is generally nonrefundable, and in a sale that completes it is credited to the buyer at closing. Whether it has to be refunded in any particular case depends on the contract and any addenda, and there are recognized exceptions — a material breach by the seller among them.
- The earnest money. Held by an escrow agent rather than paid to you, and returned to the buyer if they terminate during the due diligence period.
So the due diligence fee is the buyer’s money committed from the start, and the length of the due diligence period is how long they can change their mind. A high price with a long period and a small fee is a weaker offer than it looks. A slightly lower price with a short period and a substantial fee may be the stronger one.
What else to weigh
- How it is being paid. Cash removes the lender and the appraisal from the picture. A loan brings both, and the type of loan can bring property condition requirements with it.
- The settlement date. Whether it works with your own move, and how much room there is if the buyer’s lender is slow.
- What the buyer is asking you to pay. Closing cost help, a home warranty or repairs are all price adjustments wearing different clothes. Compare offers net, not gross.
- Whether the offer depends on something else. A buyer who has to sell their own property first is carrying a risk that ends up being yours.
- What is being asked to convey. Boat lift, dock, kayak racks, beach gear, furniture — and on a rental, the forward bookings and the money attached to them. That last one causes more arguments than anything else.
- Possession. When the buyer takes the keys, and whether you need any time after recording.
Negotiating
My job is to get you the best terms I can while keeping the deal together, and to tell you the truth about which offers are real.
If you get more than one, we will lay them side by side — not just price, but net proceeds and the probability of closing — and I will give you my read. The decision is yours. I will make sure you are making it with everything in front of you.
Countering a term is often worth more than countering the price. A shorter due diligence period or a larger fee changes your risk more than a few thousand dollars changes your net.
Two things that keep a deal clean
Put it in writing. Nothing counts until it is signed — counteroffers, repair promises, what stays with the house. On coastal property be specific about what conveys, because “we assumed” is not a term anybody can enforce.
Watch the calendar. Once you are under contract every deadline matters, and the due diligence period runs from the effective date. Miss one and you can hand the buyer leverage you did not mean to give away. I will keep you ahead of each date so nothing sneaks up on you.
Where this comes from
- NCREC — due diligence questions and answers (opens in a new tab)
- NCREC — when are due diligence fees refunded? (opens in a new tab)
General information about how a North Carolina residential sale usually works, not legal, tax or financial advice. Every property and every contract is different. Your closing attorney is the right person to ask about your own transaction.