Letter of Intent (LOI) Real Estate Template

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A Real Estate Purchase Letter of Intent is a document between a buyer and a seller summarizing proposed terms for a property sale. It is used to signal serious intent before drafting a binding purchase agreement.
Real Estate Letter of Intent

This Real Estate Letter of Intent (the "Letter of Intent" or "Letter") is entered into on   (the "Effective Date") and provides a written expression of the mutual interest between the following parties: 

 , an individual having their usual place of living at    (the "Buyer"), and

 , an individual having their usual place of living at   (the "Seller"), collectively referred to as the "Parties" and individually as a "Party". 

 

Proposal for real estate transaction related to the property

 

Dear  

I am writing to express my intent to sell the property described herein (the "Transaction"). This Letter of Intent outlines the general terms and conditions of my proposal, which I believe provide a solid foundation for further negotiations. Please note that this document is non-binding and is intended solely as a preliminary understanding between the Parties.

 

Property description

Legal description:   (the "Property").

Address:  . 

 

Purchase price

Proposed purchase price:  . 

 

Deposit

The Buyer shall provide a deposit (the "Deposit") of   to be delivered in cash within   days after accepting this Letter of Intent by the Seller. If the Transaction does not close due to the failure or initiative of any party other than the Buyer, the Deposit shall be promptly refunded to the Buyer. Upon the successful closing of the Transaction, the Deposit shall be credited toward the purchase price unless the Parties agree otherwise.

 

Terms and conditions

Closing date. The closing of the Transaction shall take place on or before  .

Contingencies. The Transaction is contingent upon  .

Additional terms.  . 

 

Confidentiality

Both Parties acknowledge the sensitive nature of our discussions and agree to maintain strict confidentiality regarding all information shared during the negotiation process.

 

Exclusivity

During the negotiation period until the planned closing date, both Parties agree to exclusively engage with each other and refrain from pursuing similar discussions with third parties. If the Letter of Intent is not accepted before the Acceptance Date specified below, the Parties are released from the obligations outlined in this exclusivity clause.

 

Due diligence

We commit to conducting a thorough due diligence process to ensure the viability and feasibility of the proposed collaboration. The desirable due diligence term is  .

 

Governing law

This Letter of Intent shall be governed by the laws of the State of  . 

 

Acceptance

If you agree to the aforementioned terms, please sign and return a copy of this Letter by no later than  . The day of signing and returning a signed copy of this Letter by the other Party shall be the day of acceptance of this Letter (the "Acceptance Date").

 

This Letter of Intent outlines our preliminary understanding and commitment to exploring potential collaboration.

Please feel free to reach out to me at   to discuss this further.

 

Sincerely,

 

_________________________

(Place for signature)

 

 

 

 

Accepted and agreed on  :

 

_________________________

(Place for signature)

 

 

 

Written by Megan Thompson - Reviewed by Kate Adkham

Template Description

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Paper titled "Real Estate Letter of Intent"; man shaking hands with a woman near the house

A real estate letter of intent (LOI) is a pivotal document in the real estate industry. It encompasses preliminary agreements regarding a real estate transaction before a final document, known as the purchase agreement, is signed. This letter of intent real estate form serves to lay the foundation for a smooth transaction process by outlining fundamental details, such as the proposed purchase price, payment terms, and any contingencies.

This preliminary document holds critical importance as it manifests the seriousness of a business transaction, specifying the path toward intent to purchase real estate and helping to mitigate potential disputes. Considering the scale and complexity of real estate purchasing, the letter of intent real estate template often becomes a necessary mechanism to protect the interests of all parties involved.

When To Use a Real Estate Letter of Intent?

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A real estate letter of intent comes into play when a prospective buyer has a firm decision to purchase a property, but the definite terms and conditions are yet to be negotiated and agreed upon. It's commonly used as a "first step" in acquiring commercial real estate. It is important to note, however, that a letter of intent to purchase real estate is not typically legally binding (except for certain provisions like confidentiality and exclusivity).

Parties of the Real Estate Letter of Intent

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  • Buyer — This is the individual or entity who shows interest in purchasing a property. It is the buyer's responsibility to make adequate plans regarding finances, inspection, and due diligence, aligning with the terms of the LOI in real estate. Once all the terms and conditions have been met, including the complete payment, the buyer becomes the full and undisputed owner of the property.
  • Seller — This would be the individual, corporation, or any other legal entity initially owning the property up for sale. In the real estate transaction process, the seller is obligated to confirm that all assertions about the property are truthful and bear no undisclosed issues.
Insight

Upon meeting all terms and conditions, the seller transfers property ownership, often through a deed. This deed is typically recorded with the county recorder or other relevant real estate recording authorities, providing the legal documentation that the property transferred hands.

Key Terms

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  • Property Description: This includes the address and full legal description of the property.
  • Purchase Price: The initial proposed purchase price.
  • Due Diligence & Inspection: The terms under which the buyer can inspect and audit the property.
  • Confidentiality: To maintain discretion in negotiations, a confidentiality term should be included.
  • Exclusivity or No-Shop Clause: This prevents the seller from accepting offers from other possible buyers for a specified period.

How To Write a Real Estate Letter of Intent

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A real estate letter of intent is a pivotal legal document that lays out preliminary agreements in a real estate transaction. This formally drafted letter lays the groundwork for the purchase of your potential new property. You can find a handy LOI template real estate online from reputable sources like Loio or seek the help of legal professionals for its crafting.

Below are the steps on how to formulate a real estate letter of intent template if you're a potential buyer and or a property seller:

Buyer
  1. State the specific details of all parties involved in the letter, including your legal name and contact information.
  2. Define the property in question, providing its legal description and address.
  3. Outline the proposed purchase price and terms, including payment arrangements.
  4. Flag any contingencies, such as financial, legal, or inspection-related conditions, that must be met.
  5. Stipulate important clauses, like confidentiality and an exclusivity period.
Seller
  1. Specify the property being sold, adding any pertinent details and disclosures.
  2. Acknowledge the receipt of the intention to purchase and provide consent for further negotiations.
  3. Elucidate all terms of the purchase, including the price, terms of payment, and contingencies.
  4. Clarify any expectations or conditions, such as due diligence requirements or timeframes for inspections.
  5. Affirm any binding conditions in the letter, emphasizing areas like confidentiality and exclusivity.

Both parties should carefully review the sample letter of intent real estate, ensuring that they fully understand the stipulated terms and conditions. Getting assistance from legal professionals is usually advised to protect the interests of everyone involved. 

Remember, achieving a mutual understanding regarding key elements of the LOI real estate template is vital to facilitating a smooth real estate transaction process. Finding a well-drafted letter of intent to buy real estate PDF online is always a good idea. Using this real estate LOI template can streamline the writing process and ensure all essential elements of the document are included. 

Generally, a letter of intent to purchase property is both a strategic and practical step forward in acquiring real estate. It represents a precautionary measure, establishing a clear pathway for the transaction, which is beneficial for both parties involved. Therefore, considering a letter of intent template real estate might be of great value to you.

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