Buying a mountain home in Highlands should feel exciting, not uncertain. Yet once you go under contract in North Carolina, the due diligence clock starts, and every day matters. If you understand how due diligence works here, you can investigate the property, protect your money, and still write a winning offer.
In this guide, you’ll learn how North Carolina’s due diligence framework functions, what inspections to prioritize for Highlands and Macon County homes, and how to balance speed with protection in a competitive market. Let’s dive in.
What due diligence means in North Carolina
North Carolina uses a two-part system that separates your upfront risk from your escrow deposit. You negotiate both items with the seller and set your timeline in the contract.
- Due diligence fee: A negotiated, usually non-refundable fee you pay to the seller for the right to investigate and to terminate the contract for any reason during the due diligence period. If you close, this amount is typically credited to you at settlement.
- Earnest money: Funds placed in a trust or escrow account to show good faith. If you terminate properly within the due diligence period, it is generally returned to you per the contract.
Common ranges vary by market. In mountain second-home purchases, many offers include mid-to-high four-figure to low five-figure due diligence fees depending on price and competition. Earnest money often ranges from about 1% to 3% of the price. Your exact amounts should reflect current Highlands conditions and your risk tolerance.
Due diligence fee vs. earnest money
The two payments have different rules and outcomes.
- If you terminate within the due diligence period as the contract allows, the seller keeps the due diligence fee and you typically receive your earnest money back.
- If you breach after the due diligence period or fail to close without contractual cause, the seller may keep both deposits and can pursue other remedies stated in the contract.
Always review the exact contract language. The North Carolina standard forms set the framework, but your signed agreement governs deadlines, termination rights, and remedies.
Timelines and delivery deadlines
Your timing is set in the contract and is critical.
- Due diligence period: Negotiated length, often 7 to 14 days, sometimes shorter or longer. You can terminate for any reason during this period if the contract grants that right.
- Payment timing: The due diligence fee is typically due at acceptance or within a short window in the contract. Earnest money is often due within a few business days after ratification. Verify the exact deadlines in your agreement.
- Day counting: Confirm whether timelines use calendar or business days. Missing a deadline can be costly.
Plan to schedule inspections the moment the contract is signed. Septic and well tests can take several days for results. In busy seasons, local inspectors in Highlands can often accommodate next-day appointments, but you should still book early.
Must-do inspections for Highlands homes
Mountain properties deserve a thorough look during your due diligence window. Prioritize these checks:
- General home inspection by a licensed inspector, ideally with ASHI or InterNACHI credentials.
- Septic system inspection and permit record pull from the Macon County Health Department; confirm capacity and condition.
- Well water testing for coliform, E. coli, nitrates, pH, and a flow test if applicable. Remember that seasonal conditions can affect results.
- Roof and chimney inspection, with attention to snow load, flashing, and masonry.
- Pest inspection for termites and wood-destroying organisms.
- Slope, drainage, and retaining walls evaluation to assess erosion and potential landslide risks.
- Private road access and right-of-way review, including who maintains the road and how winter access is handled.
- Survey or boundary review to catch encroachments, setbacks, or building envelope issues on steep lots.
- Utilities and broadband availability for remote work needs and outage expectations.
- Environmental and title checks for flood maps, watercourses, easements, or mineral rights where applicable.
Contingencies that protect you
North Carolina places most of your investigation inside the due diligence window, so build smart protections into your offer. Consider:
- Inspection contingency for general and specialty inspections
- Septic inspection and approval, or negotiated credit if failing
- Well water testing and flow rate confirmation
- Appraisal and financing addenda when financing applies
- HOA and covenants review with a right to terminate
- Insurance availability review, including wildfire or flood coverage
- Title review for easements and deed exceptions
Aim to keep essential contingencies while shaping terms that appeal to sellers. Your agent can help draft the right addenda.
How earnest money is handled in NC
Earnest money is typically held in a broker trust account or by your closing attorney until settlement. The handling follows North Carolina rules and the contract.
If you terminate properly during the due diligence period, your earnest money is generally returned. If you breach after due diligence, the seller often keeps both the due diligence fee and earnest money and may pursue further remedies stated in the contract. Many NC contracts include mediation or outline dispute options. Your closing attorney coordinates title, escrow, and disbursements at closing.
Competitive offer strategies without losing protection
You can write a sharp offer and still keep key safeguards.
- Use a meaningful due diligence fee to stand out, but keep a reasonable due diligence period so you can complete inspections.
- Shorten the due diligence period only if ready to schedule priority inspections immediately and fast-track septic and well tests.
- Increase earnest money to signal strength, with full awareness of post–due diligence risk.
- Pre-offer vetting: Ask for any available inspection reports, septic records, surveys, and HOA documents before you write.
- Bring local experts onto your team early, including a Highlands-area inspector, septic technician, and well tester.
- Financing advantage: Secure a strong pre-approval or pre-underwritten file to reduce financing risk. Cash or bridge options can help with timing.
- Appraisal gap language: If appropriate, state a capped amount you will cover if the appraisal comes in low.
- Negotiate credits instead of repairs to streamline closing if issues arise.
Example structures buyers use in Highlands:
- Example A, moderate risk: Due diligence fee near 1% of price, 10-day due diligence period, earnest money near 1%, septic and well contingencies, 21-day path to close.
- Example B, more competitive: Due diligence fee near 1.5%, 7-day due diligence period, earnest money near 2%, septic and well protected, general inspection in 5 days, willingness to accept a capped seller credit for cosmetic items.
Your exact numbers should reflect your comfort level and current market conditions.
Step-by-step due diligence game plan
Use this simple plan the moment your offer is accepted:
- Calendar every deadline in the contract, including payment due dates and the end of the due diligence period.
- Deliver the due diligence fee and earnest money on time per the contract.
- Order inspections immediately: general home, septic, and well first. Add roof, chimney, pest, structural, or environmental as needed.
- Pull records: septic permits from Macon County Health, any building permits, road maintenance details, and HOA documents.
- Confirm insurance availability and expected premiums, including wildfire or flood coverage if relevant.
- Review title, easements, and boundary survey options with your closing attorney.
- Negotiate findings quickly. Ask for critical repairs or a seller credit. Keep documentation organized.
- Decide before your deadline: proceed, renegotiate, or terminate within the due diligence window.
Mountain-specific access and safety checks
The Highlands area has unique logistics. Address these early:
- Winter access, plowing, and steep private roads
- Driveway grade, turning radius for larger vehicles, and surface material
- Tree risk and defensible space for wildfire safety
- Propane supply, generator readiness, and power reliability in storms
- Broadband options if you plan to work remotely
A short due diligence period is workable if your team is ready on day one and you prioritize the items above.
Who is on your local team
Successful second-home buyers in Highlands rely on local, North Carolina-licensed professionals. Your core team includes your buyer’s agent, home inspector, septic and well specialists, surveyor, and a closing attorney who will handle title work and settlement.
Your agent can also coordinate with the Town of Highlands and Macon County planning for permits and road status, the Macon County Health Department for septic records, and the NC Department of Environmental Quality for well guidance.
Bottom line for Highlands buyers
North Carolina’s due diligence system rewards preparation. A well-structured offer, a realistic due diligence period, and the right mountain-specific inspections protect you while keeping your offer competitive. With local expertise and clear deadlines, you can move forward with confidence.
Ready to evaluate a Highlands property or craft a strong offer tailored to the plateau? Schedule your strategy session with Collin Taylor - Main Site.
FAQs
What is the due diligence fee in North Carolina real estate?
- It is a negotiated, usually non-refundable payment to the seller that buys you the right to investigate and to terminate for any reason during the due diligence period, with a credit at closing if you proceed.
How is earnest money different from the due diligence fee?
- Earnest money is held in escrow or a trust account and is generally returned if you properly terminate within due diligence, while the due diligence fee is paid to the seller and is typically non-refundable.
How long should my due diligence period be in Highlands?
- Many buyers use 7 to 14 days, but the right length depends on inspector availability and the property’s complexity; septic, well, and structural checks should drive your timeline.
What inspections are essential for a Highlands mountain home?
- Prioritize a general home inspection, septic inspection and permit check, well water testing and flow, roof and chimney review, pest inspection, slope and drainage assessment, road access, and a survey if boundaries are unclear.
When do I have to deliver earnest money in NC?
- Many contracts require earnest money within a short window, often within a few business days of ratification, but your executed contract sets the exact deadline.
Can I write a competitive offer without waiving protections?
- Yes. Use a meaningful due diligence fee, a realistic but efficient due diligence period, and keep critical septic and well contingencies while accelerating inspections.
What happens if problems are found after inspections?
- You can negotiate repairs or credits, or terminate within the due diligence period per the contract; after the period, your options narrow and your deposits may be at risk if you do not close.
Who holds earnest money and is it safe?
- It is typically held by a broker in a trust account or by the closing attorney under North Carolina rules until closing or proper disbursement per the contract.
