Essential for buyers to know: The Due Diligence Fee

As we head into buying season for homes, I thought it would be important to review some of the most important things for buyers to be aware of.

One is the due diligence fee. The due diligence fee is negotiable, and is often 1% or more of the offer amount. The fee counts towards the purchase of the home (it is basically a deposit).

The Due Diligence Fee is non-refundable except in the event of a material breach of this Contract by Seller.

Even if a home inspection finds a major structural defect in the home, the due diligence fee will not be refundable.

It becomes an obligation of the buyer as soon as an offer is accepted by the seller. It is due on the effective date of the offer (after buyer accepts offer).

If the buyer fails to deliver the due diligence by the due date, the seller will have the right to terminate the offer and collect not only the due diligence fee, but also the earnest money deposit and legal fees if they need to bring legal action to collect.