What happens if the due diligence (DD) fee is not paid?

What happens if the due diligence (DD) fee is not paid?

• A. There is no contract
• B. The contract is automatically void
• C. The dispute goes to court
• D. The property cannot be sold

Answer: (C)

The due diligence fee is a crucial component in the North Carolina real estate transaction process, particularly in protecting the buyer's interest during the due diligence period. If the due diligence fee is not paid, the contract remains in effect; however, the seller may consider the buyer in default, which may lead to disputes. In such cases, if the buyer fails to fulfill their obligation to pay the due diligence fee, this can result in the seller seeking legal action, potentially steering the matter toward court. It emphasizes the importance of the due diligence fee as it functions as a commitment from the buyer that allows them to conduct inspections and investigations on the property with a level of assurance. The absence of this fee does not automatically void the contract or prevent the sale of the property, instead leading to the possibility of legal disputes over the terms of the agreement.

The due diligence fee is a crucial component in the North Carolina real estate transaction process, particularly in protecting the buyer's interest during the due diligence period. If the due diligence fee is not paid, the contract remains in effect; however, the seller may consider the buyer in default, which may lead to disputes.

In such cases, if the buyer fails to fulfill their obligation to pay the due diligence fee, this can result in the seller seeking legal action, potentially steering the matter toward court. It emphasizes the importance of the due diligence fee as it functions as a commitment from the buyer that allows them to conduct inspections and investigations on the property with a level of assurance. The absence of this fee does not automatically void the contract or prevent the sale of the property, instead leading to the possibility of legal disputes over the terms of the agreement.