What happens if a buyer cancels for any reason after the due diligence period?

If a buyer cancels a purchase agreement after the due diligence period, they forfeit their due diligence fees and earnest money deposits. The due diligence period is a specific timeframe during which the buyer can inspect the property, conduct due diligence, and decide whether to proceed with the purchase. Once this period ends, the buyer no longer has the right to back out of the contract without consequences.

During the due diligence period, the buyer typically pays a fee to the seller in exchange for the right to terminate the contract without penalties if they choose to do so. Once this period is over, the seller has already relied on the buyer’s commitment, and the buyer is expected to follow through with the purchase unless they can prove a valid legal reason for cancellation that wouldn't result in losing their deposits. As such, if the buyer decides to cancel afterward, they lose their initial payments, reflecting the seller's reliance on the contract and the purpose of the due diligence timeline. This illustrates the importance of the due diligence period in North Carolina real estate transactions.