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).
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