What happens if the due diligence fee is late?

First, what is the due diligence fee?

Most states don’t have one, so if you’re moving here, this may be new to you. In North Carolina, a buyer can agree to pay the seller a due diligence fee. It pays for one thing: the buyer’s right to walk away from the contract for any reason, or no reason at all, during the due diligence period. That’s the time the buyer uses for inspections, the appraisal, the loan and anything else they want to check.

The fee goes straight to the seller, and it’s the seller’s to keep. If the sale closes, the buyer gets credit for it at closing. The amount is negotiated, and it can be zero. (If your contract has no due diligence fee, none of the late-payment rules below apply.)

When the fee is due now

The fee is still owed the day you go under contract. But since July 1, 2026, the buyer has until the end of the next banking day to get it to the seller.

A banking day is Monday through Friday, not counting Federal Reserve holidays. So weekends don’t count, and neither do days like Columbus Day, Veterans Day or Thanksgiving.

“Under contract” means the day the last party signs and that’s communicated back to the other side. Your agent will tell you the exact date.

If the fee doesn’t arrive on time

Being late doesn’t end the contract on its own. Here’s what happens:

1. The seller sends a written notice. Usually the listing agent sends it on a standard form (Form 355-T), telling the buyer the fee hasn’t been received.
2. The buyer gets one more banking day. The buyer has until the end of the next banking day to deliver the fee in immediately available funds, such as a wire or an official bank check. A personal check doesn’t work at this point.
3. The seller decides. If the fee still hasn’t arrived, the seller may end the contract. It isn’t automatic, and the seller doesn’t have to. Some sellers would rather keep the deal and give the buyer more time.

The seller can keep inspectors out until it’s paid

This is new in the July 2026 contract. Until the fee is paid, the seller may limit the buyer’s physical access to the house. That means the seller can say no to inspectors and contractors going into the house until the fee arrives. Again, it’s the seller’s choice, not automatic.

Why it matters: sellers had seen buyers go under contract, do every inspection right away, then back out without ever paying the fee. Now the seller can simply say, “Pay the fee first.”

Changing your mind doesn’t cancel the fee

Say a buyer goes under contract Friday night, wakes up Saturday with second thoughts and terminates before paying anything. The fee is still owed. The extra banking day changed when the fee has to arrive. It didn’t change the seller’s right to it. Walking away is exactly what the fee paid for.

And refusing to pay makes things worse, not better. After the written notice and the extra banking day, a buyer who still hasn’t paid is in breach of the contract. That can put the buyer’s earnest money at risk too, on top of the fee they still owe. A seller can take that to small claims court, and the judge will read what the contract says.

Why the rule changed

I teach this contract to new brokers, and this is the example I use in class. Under the old contract, the fee was due the day you went under contract. Say a buyer signed on a Friday night, and the bank was closed. By Saturday morning, technically, the buyer was late.

The seller could send the late notice that Saturday. The buyer’s one day to fix it ran out before the bank ever opened, and by Monday morning the seller could cancel. The buyer never had a real chance to pay.

The July 2026 contract fixes that. The fee is still the seller’s from day one, but the buyer gets until the end of the next banking day to deliver it. That’s fair to both sides.