Key Takeaways
- The standard NC Offer to Purchase and Contract (Form 2-T) is the most commonly used residential contract form
- Earnest money must be deposited within 3 banking days of acceptance per NCREC rules
- Due diligence period allows buyer to conduct inspections and investigations; due diligence fee is non-refundable
- Time is of the essence is implied in NC contracts, making all deadlines strictly enforceable
- The buyer may terminate during due diligence period for any reason but forfeits the due diligence fee
North Carolina Offer to Purchase and Contract
Important: This content covers North Carolina-specific contract law. You should complete the National Real Estate Exam Prep first, as general contract principles are tested on the national portion.
Real estate contracts in North Carolina must meet all standard contract requirements plus NC-specific provisions.
Standard Contract Requirements
For a valid North Carolina real estate contract:
| Requirement | Description |
|---|---|
| Competent Parties | Legal age (18+) and mental capacity |
| Offer and Acceptance | Meeting of the minds |
| Legal Purpose | Transaction must be lawful |
| Consideration | Something of value exchanged |
| Written Form | Statute of Frauds requires writing |
| Legal Description | Property must be identifiable |
The NC Offer to Purchase and Contract (Form 2-T)
The Standard Form 2-T is the most widely used residential purchase contract in NC:
Key Contract Provisions
| Section | Purpose |
|---|---|
| Purchase Price | Total price and payment terms |
| Earnest Money | Amount and deposit timing |
| Due Diligence Fee | Non-refundable payment to seller |
| Due Diligence Period | Time for inspections (ends at 5pm) |
| Financing | Loan terms if applicable |
| Settlement | Closing date and location |
| Additional Provisions | Any negotiated terms |
Earnest Money vs. Due Diligence Fee
NC contracts have TWO separate payments:
| Payment | Purpose | Refundable? |
|---|---|---|
| Due Diligence Fee | Paid to seller for due diligence period | NO - Non-refundable |
| Earnest Money | Deposit toward purchase | YES - Under certain conditions |
Key Distinction: The due diligence fee compensates the seller for taking the property off the market during due diligence. Earnest money is a good-faith deposit applied to the purchase.
Due Diligence Period
The due diligence period is a unique feature of NC contracts:
What is Due Diligence?
The due diligence period gives the buyer time to:
- Inspect the property
- Review HOA documents
- Verify financing
- Conduct surveys
- Research title issues
- Investigate any concerns
Key Due Diligence Rules
| Aspect | Rule |
|---|---|
| End Time | 5:00 PM on the due diligence date |
| Buyer's Right | May terminate for ANY reason |
| If Buyer Terminates | Earnest money is refunded; due diligence fee is NOT |
| After Due Diligence | Earnest money becomes at risk |
Due Diligence Fee
| Feature | Description |
|---|---|
| Paid To | Seller (or seller's agent to hold) |
| When Paid | At contract formation |
| Refundable | NO - seller keeps regardless of outcome |
| Applied at Closing | Yes - credited to buyer at closing |
Exam Tip: The due diligence fee is ALWAYS non-refundable to the buyer, even if the contract falls through during due diligence.
Earnest Money
Deposit Requirements
| Requirement | Detail |
|---|---|
| Deposit Deadline | 3 banking days after acceptance |
| Where Held | Trust account or escrow agent |
| Amount | Negotiable between parties |
When Earnest Money is Refundable
The buyer gets earnest money back if:
- Buyer terminates DURING due diligence period
- Seller breaches the contract
- Financing contingency is not satisfied (if applicable)
- Property is destroyed before closing
When Earnest Money is Forfeited
The buyer may lose earnest money if:
- Buyer defaults AFTER due diligence ends
- Buyer breaches contract terms
- Buyer fails to close without valid reason
In North Carolina, within how many banking days must earnest money be deposited after contract acceptance?
If a buyer terminates during the due diligence period, what happens to the due diligence fee?