North Carolina Real Estate Purchase Contracts

In North Carolina, residential real estate transactions typically use the Offer to Purchase and Contract (Form 2-T) published by the NC Bar Association and NC REALTORS®. Commercial transactions often use custom contracts. When either party fails to close as agreed — or breaches a material term during the due diligence or closing process — the non-breaching party has legal remedies.

Common Buyer Defaults

• Failing to close without a valid excuse after the due diligence period has expired
• Failing to secure financing through lack of reasonable diligence
• Walking away after waiving or allowing due diligence to expire
• Refusing to close after a seller has cured known defects

Common Seller Defaults

• Refusing to close after accepting a buyer’s offer and receiving due diligence fees and earnest money
• Conveying encumbered title or failing to disclose material defects as required by N.C.G.S. § 47E (Residential Property Disclosure)
• Double-contracting — accepting a higher offer after already contracting with a buyer
• Failing to vacate the property or remove personal property by closing

Earnest Money and Due Diligence Fees

The 2011 revisions to North Carolina’s standard residential contract created two upfront buyer payments: (1) the due diligence fee, which is non-refundable and goes directly to the seller, and (2) the earnest money deposit, held in escrow. If the buyer terminates during the due diligence period, the buyer forfeits the due diligence fee but typically recovers the earnest money. If the buyer defaults after the due diligence period, the seller may be entitled to retain both the due diligence fee and the earnest money. Disputed disbursements often require litigation or interpleader proceedings.

Specific Performance

Because each piece of real estate is considered legally unique, the standard contract remedy of money damages may be inadequate when a seller refuses to close. North Carolina courts regularly award specific performance in real estate cases — ordering the defaulting seller to actually complete the sale at the contract price. Specific performance is an equitable remedy and requires the plaintiff to show they were ready, willing, and able to close.

Damages Claims

Where specific performance is unavailable or undesirable, the non-breaching party may recover compensatory damages:

• Buyer’s damages from seller default: Difference between contract price and fair market value at the time of breach; additional costs incurred in finding a substitute property; carrying costs; moving expenses
• Seller’s damages from buyer default: Difference between contract price and resale price; carrying costs during the period of re-marketing; broker fees on the failed transaction

How We Can Help

Our attorneys represent buyers and sellers in North Carolina real estate contract disputes, including:

• Demand letters and pre-suit resolution of earnest money disputes
• Specific performance actions in Rowan County Superior Court
• Compensatory damages claims
• Residential Property Disclosure Act (§ 47E) claims for seller misrepresentation
• Commercial real estate contract litigation
• Mediation and negotiated settlement of transaction disputes