A non-binding legal document used to communicate the high-level business terms in a real estate transaction. The letter of intent, or LOI, is most often used by the buyer at the early stages of a real estate purchase. The buyer sends a “letter” to the seller conveying the terms under which the buyer would proceed the acquisition of a seller’s property.
Terms outlined in a letter of intent generally include purchase price, amount and treatment of earnest money, timing of closing, the condition of the property upon closing, and other high-level business terms the seller and buyer must agree upon before drafting the lengthier, and binding, purchase and sale agreement (PSA).
Click here to get this CRE Glossary in an eBook (PDF) format.