Home Buying in Goldsboro>Question Details

Stopbuyingem…, Home Owner in Goldsboro, NC

What is the difference between an option fee and a due diligence fee?

Asked by Stopbuyingempty, Goldsboro, NC Wed Mar 6, 2013

If I rent to own a single family home in North Carolina do I need to pay both a due diligence fee and an option fee?

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No. An option fee is a non-refundable deposit paid to the Seller to have them take the home off the market and lease it to a tenant who is given an option to buy the home. A Diligence fee is the fee paid by the Buyer to the Seller (also no refundable) to purchase a 3-4 week window in which to do all their inspections, secure financing, examine title and either move forward or walk away. Typical diligence fees are between $100 - $500. Option fees would typically be between $1000 - $5000 or more depending on the price of the property.

I will tell you you should not consider rent to own. In over 25 years I can count the number of rent to owns where you (the tenant / buyer) actually bought the home on one finger. Rent to own properties are designed by very savvy sellers to take advantage of less savvy buyers. The odds of your actually ever owning a property you "buy" this way are slim to none. You'll be renting it for above market pricing under terms designed to benefit the seller heavily and you not at all. I would strongly recommend you speak to an attorney and have them review any paperwork you're asked to sign before you sign it.
1 vote Thank Flag Link Thu Mar 7, 2013
thank you
Flag Tue Apr 30, 2013
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