BIC TIP #1275: When Is the Due Diligence Fee Due?

ByStephen Long
Watch Stephen Long explain the change to when the due diligence fee is due under the new Offer to Purchase and Contract.

It is my money and I want it now. That is how sellers feel about the due diligence fee. But when is it actually due? In this BIC TIP, Stephen Long explains a practical change in the new Offer to Purchase and Contract that gives buyers one banking day to deliver good funds if they cannot deliver on the effective date.

The Old Rule: Due on the Effective Date

Historically, the due diligence fee has always been due on the effective date, meaning the date the offer became a contract binding on both buyer and seller.

That sounds clean on paper. In real life, it was often not possible. Contracts get signed late in the evening, on weekends, or after banking hours, and suddenly a buyer is technically behind before the ink is even dry.

The New Rule: One Banking Day of Breathing Room

Under the new Offer to Purchase and Contract, the due diligence fee is still due on the effective date. That has not changed.

What has changed is the cushion. If the fee is not delivered on the effective date, the buyer gets one banking day to deliver good funds without being in breach. That is a big change, and a welcome one for anyone who has ever chased a wire at 4:59 on a Friday.

Why It Matters for Your Clients

The goal is simple: give buyers a fair opportunity to go to the bank, get the money they need, deliver good funds to the seller, and keep the contract rolling toward closing.

Buyer agents should still coach clients to have funds ready before the offer is accepted. The extra banking day is a safety net, not a plan. Listing agents should understand the new timeline so they can set accurate expectations with sellers who are eager to see that money arrive.

The Practical Takeaway

Make sure you know which version of the form you are working with, because the timing rules differ. On the new form, the fee is due on the effective date, with one banking day of grace to deliver good funds.

Prepare your buyers in advance, communicate clearly with the other side, and keep that contract moving toward the closing table.

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