Why North Carolina Buys Real Estate Differently And What That Means For You As a Buyer
Buying a home should not feel like deciphering ancient scrolls. Yet if you have ever bought property in another state, stepping into North Carolina’s purchase process can feel like someone quietly swapped your map for a treasure hunt written in invisible ink.
Here at Joy Watson Real Estate, my intention is to make sure you walk in knowing exactly what to expect, why the process works the way it does, and how to protect yourself every step of the way.
Let’s break down the major differences and the reasons behind them.
1. North Carolina Uses an Offer to Purchase and Contract With Due Diligence Money
Most states only require an earnest money deposit. In North Carolina, buyers usually pay two separate deposits:
Due diligence money
Earnest money deposit
The due diligence fee is paid directly to the seller and is typically non-refundable. If the buyer walks away for any reason during the due diligence period, the seller keeps that fee.
Why NC set it up this way:
The North Carolina Real Estate Commission and the NC Bar Association jointly drafted the Offer to Purchase and Contract to reduce litigation and make the transaction transparent. Instead of arguing about what “repairs,” “inspections,” or “condition” mean, the contract gives buyers a window to investigate everything upfront. That window is called the due diligence period, and the fee compensates the seller for taking the property off the market while you complete inspections.
Think of it as NC’s way of saying, “Do your homework now so we don’t need a courtroom later.”
2. NC Buyers Purchase Homes “As Is”
North Carolina’s standard contract (Form 2-T) is an as-is contract. Sellers do not have an automatic obligation to fix anything. They can agree to repairs, but nothing in the law requires it.
Why NC set it up this way:
To cut down ambiguity and keep disputes low. When the contract is as-is, everyone understands the rules. Buyers inspect. Sellers choose whether to contribute toward repairs, price reductions, or closing credits. No one can force the other party to repair something after the fact.
This often surprises buyers coming from states where sellers must complete mandatory repairs for safety, habitability, or loan conditions. Here, the contract trusts buyers to evaluate risk and sellers to evaluate what they are willing to negotiate.
And let’s be honest. “As is” keeps everyone acting like adults instead of auditioning for Judge Judy.
3. The Due Diligence Period is a Buyer’s One-Stop Freedom Window
During due diligence, buyers may terminate the contract for any reason.
Inspection? Appraisal? Neighborhood vibes? Mercury in retrograde? It does not matter.
As long as termination happens before 5 pm on the due diligence deadline, the buyer gets the earnest money back. The seller keeps the due diligence fee.
Why NC set it up this way:
To avoid the endless debates about “what counts as a defect.”
NC law puts all investigation responsibility on the buyer. The period gives you full freedom to:
Inspect
Get quotes
Confirm financing
Review HOA or condo documents
Verify zoning or permitted uses
Check for encroachments, easements, or code violations
North Carolina General Statutes Chapter 47E (the Residential Property Disclosure Act) requires sellers to disclose what they know, but the state also makes it clear that disclosure is not a substitute for due diligence.
4. Repairs Are 100 percent Negotiated
In many states, repairs fall under legal mandates, municipal codes, or lender requirements. Here, repairs are a conversation, not an entitlement.
Buyers often submit a Due Diligence Request and Agreement with repair requests, credits, or price reductions. Sellers can say yes, no, or somewhere in between.
Why NC set it up this way:
To keep the transaction flexible and reduce litigation.
By placing repair conversations inside the due diligence period, the state avoids rewriting contracts every time a buyer finds a loose doorknob.
5. Your Buyer Agent Represents You Alone and Must Disclose Everything
NC is strict about agency. The NC Real Estate Commission’s rules require written agency agreements and full disclosure of loyalty, duties, and compensation.
North Carolina does not allow “wink wink” dual agency without explicit written permission from both sides. Agency is governed by:
21 NCAC 58A .0104 (Agency Agreements and Disclosure)
The Working With Real Estate Agents disclosure
If your agent sees something concerning, they must tell you. If your agent hears something concerning, they must tell you. If your agent thinks the seller’s HVAC sounds like a tractor trying its best, they must tell you that too.
Why NC set it up this way:
Consumer protection and clarity.
NC regulators do not want buyers guessing who their agent actually works for.
6. Settlement Versus Closing
Other states define “closing” as the moment documents are signed. In NC, signing does not transfer ownership.
Ownership transfers when the deed records at the Register of Deeds.
Between signing and recording, we are in a limbo state called settlement.
Why NC set it up this way:
To protect clear title.
Recording first ensures that:
You do not inherit surprise liens
You receive legal ownership the moment the deed is stamped
Both parties understand when responsibility shifts
This is governed by NC General Statute 47-18 (the Connor Act).
7. Attorneys Handle Closings, Not Title Companies
North Carolina is an attorney-closing state. You will not see a title company leading the transaction the way you might in Arizona, Colorado, or California.
Why NC set it up this way:
Real estate law here is grounded in consumer protection, and the state believes closings involve legal questions that require legal supervision. Attorneys handle:
Title searches
Clearing title defects
Preparing deeds
Managing payoffs
Recording documents
Disbursing funds
It is designed to keep buyers protected and reduce post-closing disputes.
| Topic |
North Carolina
Due diligence fee system
|
Colorado | Oregon | Florida | California | Texas | New York | Georgia |
|---|---|---|---|---|---|---|---|---|
| Buyer window |
Due diligence period Buyer can walk during due diligence. |
Dates and deadlines system. Objection and resolution periods. |
Inspection contingency. Handled in escrow. |
Inspection period. Set in the contract. |
Contingency driven. Remove contingencies to proceed. |
Option period. Paid right to terminate. |
Attorney review common. Contract finalizes after review. |
Due diligence style window. Commonly negotiated. |
| Up front money |
Due diligence fee to seller. Plus earnest money held per contract. |
Earnest money deposit. Plus inspection costs. |
Earnest money. Held in escrow. |
Earnest money. Held in escrow. |
Earnest money. Deposited into escrow. |
Earnest money plus option fee. Timing matters. |
Deposit often held. In attorney escrow. |
Earnest money. Plus negotiated due diligence. |
| Closing |
Closing attorney. Commonly runs settlement and title. |
Title and escrow. Run the mechanics. |
Title and escrow. Handle closing. |
Title and escrow. Handle closing. |
Escrow and title. Run the transaction. |
Title company escrow. Standardized state forms. |
Attorney driven. Often controls the flow. |
Mix of title and attorneys. Varies by area. |
| Repairs |
Negotiated during due diligence. Buyer can walk if not satisfied. |
Objections by deadline. Then resolution period. |
Inspection requests. Negotiated in escrow. |
Negotiated in inspection period. Or buyer cancels. |
Negotiated during contingencies. Then contingencies removed. |
Negotiated in option period. Buyer can terminate. |
Negotiated by attorneys. Often via amendments. |
Negotiated in due diligence. Then deal firms up. |
Final Thoughts
NC’s system is different, but it is not random.
Everything about the North Carolina purchase process is designed to reduce lawsuits, protect consumers, and make the responsibilities of buyers and sellers unmistakably clear.
If you come from a state where everything is done differently, breathe. You are not doing it wrong. You are just in North Carolina now, where people like barbecue vinegar based, our contracts transparent, and our due diligence money up front.
If you want to walk through a real example of how this plays out in Greensboro or the Triad, I am always here to help.
Warmly,
Joy Watson
