Buying a home is exciting, but many first-time buyers are surprised to learn that there are a few expenses you'll likely pay before closing day.

One of the most common questions I hear from buyers is:

"How much money do I actually need before I buy a home?"

While your down payment and closing costs usually get most of the attention, there are three upfront costs that many buyers don't expect. Knowing about them ahead of time can help you plan your budget and avoid surprises during the home-buying process.

1. Due Diligence Fee (North Carolina)

One cost that surprises many buyers relocating to North Carolina is the due diligence fee.

The due diligence fee is paid directly to the seller on the same day your offer is accepted. This fee gives you the opportunity to complete inspections, secure financing, review the property, and decide whether you want to move forward with the purchase during the due diligence period.

If you purchase the home, the due diligence fee is typically credited toward your purchase price at closing.

However, if you decide to terminate the contract during the due diligence period, the due diligence fee is non-refundable, and the seller keeps it. Because of this, it's important to understand how due diligence works before making an offer.

2. Earnest Money Deposit

An earnest money deposit shows the seller you're serious about purchasing the home.

Unlike the due diligence fee, earnest money is typically due within five days after your offer is accepted. The funds are held by the closing attorney or escrow agent until closing.

If everything goes as planned, your earnest money is credited toward your purchase. If you terminate the contract during the due diligence period, your earnest money deposit is generally refundable.

3. Appraisal Fee

If you're financing your home, your lender will usually require an appraisal.

The appraisal helps determine whether the home's market value supports the purchase price and protects both you and your lender.

In most cases, the appraisal fee is paid upfront shortly after you're under contract. The exact timing may vary depending on your lender.

How Much Are These Costs?

The amount of the due diligence fee, earnest money deposit, and appraisal fee can vary depending on the home, the market, and your lender.

If you'd like to know what's typical in today's North Carolina market, watch my YouTube video below where I explain each cost in more detail and discuss the amounts buyers commonly see.

📺 Watch the video here:
https://youtu.be/tox_yJU-6ZA?si=2rjZHcgoQWtJtNBw

Planning Ahead Makes Buying Easier

Understanding these three upfront costs before you start house hunting can help you budget with confidence and avoid unexpected surprises.

Every buyer's situation is different, and knowing what to expect upfront makes the entire home-buying process much smoother.

Have Questions About Buying a Home?

If you're thinking about buying a home in Hickory, Granite Falls, Morganton, Newton, Conover, Lenoir, or anywhere in Western North Carolina, I'd be happy to answer your questions and help you prepare for a successful home purchase.

Victoria Lyford, Realtor®, GRI
Weichert Realtors Team Metro
📞 828-548-0834

Whether you're a first-time buyer or relocating to North Carolina, I'm here to help make the process as smooth as possible.