The Short Answer

In Pennsylvania probate real estate sales, there is no single “probate due diligence fee” statute that dictates how buyer deposits must be structured. Instead, the executor/administrator (the personal representative) generally has authority to sell estate real estate and accept deposits under the purchase contract, but the deposit terms must be handled carefully because the personal representative has fiduciary duties and (in some situations) court oversight can affect how sale proceeds are received and protected.

Practically, earnest money is typically held in escrow (often by the closing agent or broker) and credited at closing, while any nonrefundable “due diligence fee” is a contract concept that can create risk for the estate if it is challenged by heirs/beneficiaries or the Orphans’ Court as unfair or imprudent.

What Pennsylvania Law Says

In Pennsylvania, the key legal issue in a probate sale is whether the personal representative has authority to sell the property and how the transaction is structured to protect the estate and the beneficiaries. Pennsylvania’s Probate, Estates and Fiduciaries Code gives a personal representative power to sell certain estate real property (subject to will terms and other limitations), and it also provides a path to sell under court order when that is required or advisable.

The Statute

The primary law governing an executor/administrator’s authority to sell estate real estate is 20 Pa.C.S. § 3351.

This statute establishes that, except as otherwise provided by the will, the personal representative may sell estate real property that is not specifically devised (and, with required joinder, may sell specifically devised real property), and it also includes protections tied to bonding and when real estate proceeds may be paid to the personal representative.

When a court-supervised sale is needed (or when the estate wants the protections of a judicial sale), Pennsylvania law also allows a sale under Orphans’ Court order. See 20 Pa.C.S. § 3353.

Why You Should Speak with an Attorney

Even though buyers and agents often talk about “due diligence fees” and “earnest money” as if they are routine, probate sales add layers of fiduciary duty and (sometimes) court involvement that can change what is safe or acceptable for the estate. Legal outcomes often depend on:

• Strict Deadlines: If the sale is being pursued under Orphans’ Court authority or to obtain the effect of a judicial sale, the timing and notice requirements are controlled by the court order process under 20 Pa.C.S. § 3353, and missing a court-driven deadline can delay or jeopardize the transaction.
• Burden of Proof: The personal representative must be able to justify that the deal terms (including any nonrefundable fees, repair credits, or unusual contingencies) are prudent and in the estate’s best interest—especially if an heir/beneficiary later objects.
• Exceptions and Court Oversight: Some estates require bonding, and Pennsylvania law restricts when real estate proceeds may be paid to the personal representative in certain bond situations. See 20 Pa.C.S. § 3351. Also, if the property is specifically devised, additional consent/joinder issues can arise under the same statute.

Because deposit handling is usually governed by the contract and escrow arrangements (not a single probate “deposit rule”), small drafting mistakes can create big problems: disputes over whether money is refundable, whether the estate can keep it, whether it must be returned, and whether the personal representative breached fiduciary duties by agreeing to the terms.

If you want more background on executor authority and probate real estate sales, you may also find these helpful: Can a Pennsylvania Executor Sell Estate Property (Including Real Estate)? and Can I Sell My Parent’s House During Probate in Pennsylvania (Before the Estate Is Finalized)?.

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Disclaimer: This article provides general information under Pennsylvania law and does not create an attorney-client relationship. Laws change frequently. For legal advice specific to your situation, please consult with a licensed attorney.