Your mailbox is not always your friend in some states

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Published Date 2/21/2025

Picture this: You've found your dream home, you're ready to seal the deal, and you pop a cashier's check in the mail. Then poof – $7,000 vanishes into thin air. That's exactly what happened to one North Carolina couple whose cautionary tale is making waves on Reddit.

Realtor.com’s Julie Taylor tells the story and says, “Welcome to the world of due diligence fees, a real estate practice that's common in the Carolinas and takes a different form in Texas. Think of it as paying for the privilege of having a property taken off the market while you inspect it. The catch? It's completely nonrefundable.”

A due diligence fee is like buying an insurance policy for cold feet – you can walk away from the deal for any reason during the inspection period, but you'll lose this money either way. It's separate from earnest money, which is typically refundable and goes toward your down payment if you buy the house, says Taylor.

“The amount varies, but expect to pay between 0.5% and 5% of the purchase price, depending on how hot the market is. Our unfortunate Reddit couple paid $7,000 on a $295,000 house – about 2.37%.”

In Texas they call it an "option fee" and handle it slightly differently. "Your option fee isn't given directly to the seller – it's deposited with the title company," explains Dallas real estate agent Paige Elliott. Plus, Texas buyers get to apply this fee to their closing costs if they go through with the purchase.

Taylor says the biggest lesson from the Reddit couple's misfortune is: Never mail a cashier's check for due diligence money. Due diligence money should always be wired. Never leave it in any type of mailbox where it could be stolen.

So if you're house hunting in the Carolinas or Texas, remember: wire that money, keep your receipts, and maybe skip the mailbox altogether. Your future self (and your bank account) will thank you.

Realtor, TBWS

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