Generate a Letter of Intent to Purchase Real Estate with LegalZone
Generate A Letter of Intent to Purchase Real Estate with LegalZone
What Is a Letter of Intent to Purchase Real Estate?
Primarily used for commercial real estate, a letter of intent to purchase real estate formally informs the property owner that the buyer is interested in it.
Since commercial real estate transactions are more complex than residential real estate transactions, the letter of intent to purchase allows the buyer to express interest without making a total commitment and lock in any negotiations they’ve made with the buyer so far.
When Do I Use a Letter of Intent to Purchase Real Estate?
You should use a letter of intent to purchase when you want to lock in the terms and conditions you’ve verbally negotiated with the owner. Or, if you’re taking out a loan, you may need to show a letter of intent to purchase to the company you’re taking out a loan from.
Some people use a letter of intent to purchase to make a tentative commitment to a property, so they can conduct a formal inspection before making a formal commitment.
How Do I Write a Letter of Intent to Purchase Property?
You can use our generator to draft your letter of intent to purchase property easily, or you can let an attorney take the lead to get started.
If you choose to draft your own letter of intent to purchase, be sure to include:
- The names of the buyers and sellers
- The property address
- The negotiated purchase price
- The negotiated earnest deposit amount along with terms/conditions
- The SPA signing date
- A list of any furnishings included with the property
- A confidentiality clause (if applicable)
What Does a Letter of Intent Mean in Real Estate?
While not a legally binding offer, an intent to purchase real estate letter is used to lock in the details of a negotiated bid. Ideally, the document will discuss the terms of the final deal.
However, the buyer can still walk away, or the owner can sell to someone else until a real estate purchase agreement (REPA) is signed.
What Is the Difference Between a Letter of Intent and a Purchase Agreement?
A letter of intent is not a legally binding offer. A purchase agreement is a legally binding offer.
Is a Letter of Intent a Bona Fide Offer?
A bona fide offer is defined as an offer made in good faith and likely to be accepted, so a letter of intent to purchase can act as a bona fide offer.
Is a Letter of Intent Binding in Real Estate?
No. A letter of intent to purchase is more like a gentleman’s agreement in the sense that the buyer plans to commit to the property, and the owner intends to sell it to them.
But if the deal falls through because of either side and a purchase agreement is not signed, then there is no ground for legal action.
The letter of intent is not a formal offer, just a way to confirm what the purchase would look like for both parties.
What Is a Letter of Intent for a House?
A letter of intent to purchase real estate can also be used for residential properties. If a real estate deal is incredibly complex, it can be a good idea to lay out all of the terms and conditions before moving into the final offer.
If you are looking for help financing your house, having a letter of intent to purchase may help you secure the funds you need.
Create Your Letter of Intent to Purchase Real Estate with LegalZone
When you want to get all of your ducks in a row before making the final offer on a property, drafting a letter of intent to purchase will allow you to understand the full scope of the commitment.
At LegalZone, can help you get everything in order for your letter of intent to purchase. At LegalZone, we make it easy and affordable to get the legal documents you need.
If you have questions about what to include in your letter of intent to purchase, or you’re not sure if you need a letter of intent, reach out to one of LegalZone customer support specialists.
If you’re ready to begin drafting your letter of intent to purchase, use our template to get your document ready to sign in minutes. [AI4]
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