Since we’re starting to receive quite a few questions about the new offer to purchase contract, we’ve started a new series on What’s new in Residential Real Estate in North Carolina.
New Offer to Purchase Contract in North Carolina
We began our discussion about the new North Carolina Residential Offer to Purchase Contract looking at Due Diligence. We explored just what the Due Diligence time frame might look like as well as some examples of how much the Due Diligence fee might be.
Now let’s take a look at EarnestMoney. You may already be familiar with Earnest Money as it pertains to the real estate offer to purchase, but we do receive a lot of questions about the earnest money deposit; varying from how much it should be, how it is dispersed at closing, and what happens if there is a dispute…
Here in the Triangle, earnest money is usually about 1% of the sale price. Remember just like with the Due Diligence Fee the home buyer makes the offer and this too is all negotiable! Nothing is set in stone, however the 1% of sale price amount for earnest money is fairly standard in our market.
Unlike the Due Diligence Fee, Earnest Money deposits ARE refundable should the buyer decide for what ever reason NOT to continue with the purchase of the home, as long they properly cancel their contract within their Due Diligence period.**
Now with the new contract and the addition of the Due Diligence Fee, we might start to see some variations with Earnest Money amounts as well as how the offer to purchase is written.
For instance, we might start to see a Due Diligence Fee and NO initial Earnest Money deposit offered since there is a place for Additional Earnest Money Deposit to be paid by a specific date.
That date of course could reflect the end of the due diligence period. By this time as a buyer you will have had to complete all your inspections, lender requirements etc, and will have a fairly secure decision made as to whether or not you will be buying the home.
So why not go ahead and make that additional earnest money enticing to the sellers?
When writing an offer to purchase on a home, sometimes it’s not just the price a buyer offers that makes it the one the sellers accept ~ often times it’s what is being offered and how it’s presented. All the more reason to use an experienced, professional Realtor®.
**There is an exception to this; Earnest Money Deposits are refundable even after the Due Diligence period has expired in the event of Breach of Contract by the seller as is described in 1(e) of the Standard OTP Form 2-T.