If your buyer’s financing dies after the due diligence period ends, you keep the earnest money and the due diligence fee, and that is all you get. The standard North Carolina contract says plainly that there is no loan contingency in it, so a buyer who cannot close is in breach, but your recovery is capped at those two deposits.
This is the call we get at the worst possible moment. The house has been off the market for five weeks, the movers are booked, and the buyer’s lender has just found a problem. Before you decide anything, it helps to know exactly what the paperwork you signed does and does not do for you.
Almost every residential sale in New Hanover, Brunswick and Pender counties runs on the jointly approved Offer to Purchase and Contract, Standard Form 2-T, revised 7/2025 by the North Carolina Bar Association’s Real Property Section and North Carolina REALTORS. Two sentences in it decide most of this question.
What does the contract actually say about the buyer’s loan?
Paragraph 4(a) is blunt: “There is no loan or appraisal contingency in this Contract.” Paragraph 5(a) adds that the buyer’s obligations “are not conditioned on obtaining any loan(s) or other funds from sources other than Buyer’s own assets.” The loan is the buyer’s problem, and the contract tells the buyer to make sure the due diligence period is long enough for the lender to do its work.
That is why the due diligence deadline matters more than the loan itself. Up to 5:00 p.m. on the stated date, the buyer can walk for any reason or no reason and take the earnest money back. After it passes, a buyer who cannot close is in material breach even if the reason is a job change, an underwriting condition or an appraisal that came in low.
One more clause does real work here. Paragraph 5(b) says the buyer’s disclosure that they have to sell other property is “only a disclosure by Buyer and does not make this contract contingent on the sale of Buyer’s other property.” If your buyer’s purchase depends on their own house closing, that is a risk you are carrying, not a contingency they hold.
How long do I have to wait before I can call it a breach?
Seven days past the settlement date, under Paragraph 12. If you are ready, willing and able to settle and the buyer is not, the buyer is the Delaying Party and is entitled to a delay. If the Delaying Party “fails to complete Settlement and Closing within seven (7) days of the Settlement Date,” including any amended date the two of you agreed to in writing, then they are in breach and you may terminate and pursue your remedies.
That seven-day window is usually the difference between a hiccup and a dead deal. A funding delay at the lender, a missing payoff letter, a title update that turns up an old lien: those get fixed inside a week most of the time. Loans that die for income, credit or appraisal reasons rarely come back inside seven days, and you can usually tell which one you have by asking for the lender’s written explanation rather than the buyer agent’s summary of it.
- “There is no loan or appraisal contingency in this Contract” Offer to Purchase and Contract, Standard Form 2-T, Paragraph 4(a), revised 7/2025
- A delaying party who fails to complete settlement and closing within seven days of the settlement date is in breach Standard Form 2-T, Paragraph 12, revised 7/2025
- Earnest money plus any due diligence fee “together shall serve as liquidated damages and as Seller’s sole and exclusive remedy for such breach” Standard Form 2-T, Paragraph 23(a), revised 7/2025
- New Hanover County: 61 days on market against 34 a year ago, 1,251 active listings, two of every five with a price cut Redfin county data, three months ending September 2026, via our New Hanover market update
What do I actually get to keep?
Paragraph 23(a) sets it out. On a material breach by the buyer, you are entitled to the earnest money deposit, and the earnest money plus any due diligence fee “together shall serve as liquidated damages and as Seller’s sole and exclusive remedy for such breach.” Sole and exclusive is the phrase to sit with. North Carolina REALTORS’ legal Q&A on seller remedies, released July 3, 2025, puts the consequence plainly: you cannot also sue for lost profit or for a change in market value.
There are narrow carve-outs. The liquidated damages provision does not limit your rights under Paragraphs 4(e) and 4(f) if the buyer’s inspections damaged the property, or under Paragraph 1(d) if a check was dishonored. Paragraph 23(c) allows reasonable attorneys’ fees to the extent permitted by N.C. Gen. Stat. section 6-21.2 if you have to sue to collect the deposits.
Here is the part sellers find hardest. If the buyer had not yet delivered the earnest money, or the deposits were small, your remedy is small too. The contract says so directly, applying liquidated damages “without regard to their respective amounts, including zero.” We have no regional average to offer you on deposit size, because nobody publishes one for the Cape Fear region, as we explained when we wrote about how to size a due diligence fee. What we can tell you is that the deposits you accept at contract are the entire insurance policy you are buying against this exact situation.
What should I do in the first 48 hours?
Get the facts in writing first. Ask for a written statement from the buyer’s lender about what failed and whether another lender could solve it, and have your attorney read the dates before you sign anything. Then make a decision about the deposits and the listing separately, because they are separate decisions.
On the listing, speed matters more than most sellers expect. In New Hanover County the typical home takes 61 days to go under contract against 34 a year ago, there are 1,251 homes on the market, and two of every five have already cut the price. Going back on the market in the same week with the same price and fresh photos is a very different outcome from relisting in three weeks at a reduced number. Call the second and third showings from your original marketing period, and ask your agent whether anyone who toured in the first ten days is still looking. Our post on what a healthy first week of showings looks like is a useful benchmark when you are deciding whether to change the price or just change the status.
And if the buyer is asking for more time rather than walking away, read how long to give a buyer for due diligence before you grant an extension in writing. An extension can be the right call. It should be priced.
Keeping the money is not always automatic. If the buyer argues they had a right to terminate, for example because of something in the title or a repair you agreed to and did not complete, the escrow agent cannot simply hand you the earnest money. Disbursement then requires either the written agreement of both parties or a court order, which is why the practical answer is often a negotiated split rather than a clean win. Two more cautions. First, a dead loan can be a signal rather than bad luck: if the buyer’s lender balked at the appraisal, the next buyer’s lender may see the same number, and the problem is the price rather than the buyer. Second, if your own purchase is tied to this closing, the seven-day delay clause in Paragraph 12 is cutting against you too. None of this is legal advice, and the contract itself tells you to consult a North Carolina real estate attorney when it matters.
Related questions people also ask
Does the seller keep the earnest money if the buyer’s financing is denied?
Usually yes, if the denial comes after the due diligence period has ended, because the standard North Carolina contract contains no loan contingency and the buyer is in material breach when they cannot close. The seller’s recovery is limited to the earnest money deposit and any due diligence fee, which together serve as liquidated damages and as the seller’s sole and exclusive remedy. If the loan falls apart before the due diligence deadline, the buyer can terminate for any reason and take the earnest money back, keeping only the due diligence fee in the seller’s hands.
Can a seller sue a buyer for backing out in North Carolina?
Not for general damages under the standard form. Paragraph 23(a) makes the earnest money and the due diligence fee the seller’s sole and exclusive remedy for a buyer’s material breach, so lost profit, carrying costs and a later lower sale price are not recoverable. There are narrow exceptions for property damage caused during the buyer’s inspections and for dishonored funds, and the contract allows reasonable attorneys’ fees when a party sues to collect the deposits. Talk to a North Carolina real estate attorney about your specific facts before spending money on a claim.
How long after the closing date can a buyer still close?
Seven days. Under Paragraph 12 of the standard contract, a party who is unable to settle on the settlement date is entitled to a delay, but if they fail to complete settlement and closing within seven days of that date, including any amended date the parties put in writing, they are in breach and the other party may terminate. Most lender-side delays are resolved inside that window, so the seven-day mark is a sensible moment to decide whether to grant a written extension or move on.
Pull up your contract and write down three dates: the due diligence deadline, the settlement date, and that date plus seven days. Those three dates tell you what position you are in before anyone starts negotiating. If you are living through this right now, or you are about to accept an offer and want the deposits sized to protect you, we are glad to look at the specific file with you and tell you honestly how strong your position is.
Sources: Offer to Purchase and Contract, Standard Form 2-T, revised 7/2025, North Carolina Bar Association Real Property Section and North Carolina REALTORS, Paragraphs 4(a), 5(a), 5(b), 12, 23(a) and 23(c), read October 31, 2026; North Carolina REALTORS legal Q&A, “Seller Remedies When a Buyer Breaches the Contract,” released July 3, 2025; N.C. Gen. Stat. section 6-21.2; Redfin county data for New Hanover County, three months ending September 2026, via our New Hanover County market update.
