Feeling unsure about how much cash you will need to close on a home in Cary? You are not alone. Closing costs can feel confusing, especially with North Carolina’s due-diligence fee in the mix. In this guide, you will learn what you pay, when you pay it, and how to plan your budget with confidence. Let’s dive in.
What closing costs include
Closing costs are the fees and prepayments you pay in addition to your down payment to complete the purchase. In many North Carolina transactions, buyers spend about 2% to 5% of the purchase price on closing costs, not including the down payment. Your actual total depends on your loan type, rate, and the services your lender requires.
Common items include:
- Lender charges: origination, underwriting, application, discount points
- Third-party fees: appraisal, credit report, flood certification, survey if required
- Title and settlement: title search, title insurance, closing or attorney fee
- Government fees: county recording and any required documentary fees
- Prepaids: homeowner’s insurance, prepaid interest, and property tax proration
- Initial escrow deposits: starting balance for taxes and insurance
- North Carolina contract items: due-diligence fee and earnest money
NC due-diligence and earnest money
North Carolina contracts often include two separate upfront amounts, and each works differently.
- Due-diligence fee: You pay this directly to the seller when your offer is accepted. It is the price for time to inspect and decide. It is usually non-refundable after the due-diligence period ends. At closing, it is credited to the seller’s proceeds.
- Earnest money: You deposit this with the escrow or closing attorney. It usually applies to your purchase at closing. If you properly terminate within the due-diligence period or under allowed contingencies, earnest money is typically refundable. If you proceed, it reduces what you need to bring on closing day.
The amount of each is negotiable and depends on market conditions. In competitive situations, due-diligence fees can be higher.
Title, taxes, and HOA basics in Cary
Closings in North Carolina are commonly handled by closing attorneys and title companies. Your Closing Disclosure will list title charges, county recording fees, and disbursements.
- Title and settlement: You will see charges for the title search, lender’s title policy, optional owner’s title policy, and the attorney or settlement fee.
- Wake County recording: Deeds and deeds of trust are recorded with the Wake County Register of Deeds. Recording fees appear on your final statement.
- Property taxes: Wake County Tax Administration manages billing and prorations. You may reimburse the seller for prepaid taxes or receive a credit, depending on the closing date.
- HOA costs: Many Cary neighborhoods have HOAs. You may see transfer fees, resale certificate fees, and prorated dues. Who pays is negotiable and should be set in the contract.
Typical lender and third-party fees
You will see a mix of lender and outside fees tied to your mortgage.
- Lender charges: origination and underwriting, plus optional discount points to lower your rate. One point equals 1% of the loan amount.
- Third-party services: appraisal to confirm value, credit report, flood certification, and a survey if your lender requires it.
- Mortgage insurance: upfront premiums for certain loan types, or the first month of private mortgage insurance if applicable.
- Prepaid interest: the interest from your closing date to month end.
Prepaids and escrow deposits
Most lenders require you to prepay your first year of homeowner’s insurance at closing. They also set up an escrow account to pay taxes and insurance going forward. You usually deposit a few months of taxes and insurance to start that account. The exact cushion depends on the lender and loan program.
What is negotiable
Some costs can shift with negotiation and loan rules. Here is what buyers commonly can and cannot negotiate:
- Often negotiable:
- Seller concessions to cover some of your closing costs or prepaids (subject to loan limits)
- Credits in lieu of repairs found during inspections
- Who pays HOA transfer fees and some title or settlement fees
- Less or not negotiable:
- Government recording fees and mandatory lender fees
- Lender escrow and reserve requirements
- The due-diligence fee is negotiable in amount, but once paid it is normally non-refundable after the due-diligence period unless the contract says otherwise
Tip: Ask your lender for a Loan Estimate within three business days of application. It shows expected fees and prepaids so you can plan and negotiate with clarity.
Estimate your cash to close
Use this simple formula to estimate the money you will need on closing day:
- Cash to close = Down payment + Closing costs + Prepaids and initial escrow deposits + Any other required closing payments – Earnest money already deposited – Seller credits
Remember to track your total cash outlay across the whole transaction. That includes the due-diligence fee and earnest money you paid earlier, even though you will not bring those again on closing day.
Cary example: $450,000 purchase
Here is a hypothetical example to show how the pieces fit together.
- Purchase price: $450,000
- Loan amount (80%): $360,000
- Down payment: $90,000
- Closing costs (about 3%): $13,500
- Initial escrow deposit: $1,200
- Due-diligence fee paid at signing: $2,500
- Earnest money deposited: $5,000
- Seller credit toward costs: $3,000
Cash still due at closing:
- Down payment $90,000
- Closing costs $13,500
- Initial escrow $1,200
- – Earnest money $5,000
- – Seller credit $3,000
- = $96,700 due on closing day
Total cash outlay across the transaction:
- $96,700 due on closing day
- $2,500 due-diligence fee already paid
- = $99,200 total out of pocket
Key points:
- The due-diligence fee is paid to the seller at contract signing and is not brought again to closing. It is usually non-refundable after the due-diligence period ends.
- Earnest money reduces what you need to bring on closing day because it applies to your purchase.
- Seller credits, within your loan program’s limits, reduce your cash to close.
Quick cost checklist
Use this checklist to plan your budget and timing.
Paid at contract signing:
- Due-diligence fee to the seller
- Earnest money to the closing attorney or escrow
Paid at closing:
- Down payment
- Remaining closing costs and lender fees
- Title and settlement charges
- Prepaids: first year of homeowner’s insurance, prepaid interest
- Initial escrow deposits for taxes and insurance
Credited at closing:
- Earnest money deposit
- Any seller credits
Smart ways to save
- Ask early about seller concessions. Your lender will confirm maximums based on your loan type and down payment.
- Compare rate options with and without discount points. Look at the break-even timeline.
- Shop homeowner’s insurance and ask about bundling.
- Use strategy on deposits. A smaller due-diligence fee with larger earnest money keeps more cash potentially refundable during the inspection period, but sellers may prefer a larger due-diligence fee. Choose the mix that fits your risk comfort and market conditions.
- Review your Closing Disclosure at least three business days before closing. Confirm numbers and ask questions right away.
Local process notes
- Closings are handled by North Carolina closing attorneys and title companies.
- Wake County Register of Deeds records your deed and deed of trust after closing.
- Wake County Tax Administration manages property tax billing and prorations.
- HOA items in Cary vary by community. Confirm transfer and document fees during your due-diligence period and set who pays in your contract.
Get local guidance
Buying in Cary should feel exciting, not confusing. If you want a clear, step-by-step plan for your budget, timing, and negotiation strategy, reach out to Michal Wilson for a friendly walk-through and a custom cost estimate from trusted local lenders and closing attorneys.
FAQs
What are typical closing costs for Cary buyers?
- Many buyers spend about 2% to 5% of the purchase price on closing costs, not including the down payment, with totals varying by loan type and market conditions.
How do due-diligence and earnest money work in NC?
- The due-diligence fee is paid to the seller at contract signing and is usually non-refundable after the period ends; earnest money goes to escrow and typically applies to your purchase and can be refundable if you terminate properly within the due-diligence period.
Can a seller in Cary pay my closing costs?
- Yes, sellers can offer credits toward your costs, subject to loan program limits; ask your lender about maximum concessions so you can structure your offer accordingly.
What title and recording fees should I expect?
- Expect a title search, title insurance (lender policy required, owner policy optional), an attorney or settlement fee, and Wake County recording fees for the deed and deed of trust.
What prepaid items increase cash to close?
- Your first year of homeowner’s insurance, prepaid interest from closing to month end, property tax proration, and initial escrow deposits for taxes and insurance typically increase funds due at closing.
When will I get my Closing Disclosure?
- Your lender must provide the Closing Disclosure at least three business days before closing, which gives you time to review and confirm the final figures.
