How structured does a letter of intent need to be?

In Buying Property - Asked by Patrick S. - Jun 8, 2011
Report Abuse
Answer this Question

Answer(s)

Eric L.
Owner/Investor
Latham, NY

In my experience, its always a good idea to have a solid structured LOI in place when buying or leasing proeprty as it makes the whole procees easier when both parties have a firm understanding of what is involved in a transaction. Since the stakes are likely a little higher in a purchase, I would advise you hammer out all of the details, who will pay for closing costs, establish your due diligence period, if any etc etc.
It is worthwhile to take your time and review it thoroughly, on either side of the table, just make sure you give the other party some assurance that you are ready and qualified to make the deal.

Jun 9, 2011
Report Abuse
Adebo F.
Owner/Investor
New Castle, PA

In my opinion, your LOI should be very simply written. No more than one page, but be sure to capture all the basic expectations such as: The price you are paying, the due diligence period, the amount of initial down payment, the proposed closing date, and all data and property information that you will expect from the seller. Clarity is very important. If too wordy, you may lose your audience, the seller...........If you want, you can e-mail me at deboprop1@aol.com, and I can send you a copy of a simple LOI

Jun 9, 2011
Report Abuse
Chris R.
Broker/Agent
Denton, TX

An LOI is utilized to set forth the general terms of a proposed deal - sale or lease - to iron out the facts and data of a deal on which both parties can agree and therefore move to enter into a contract.
The point is - use the LOI to come to an agreement that will then be relegated to a full fledged contract. Otherwise - you will be back to using the contract to negotiate with instead of getting most of that done up front with an LOI. Most brokers have an LOI form to go by that sets forth the points of the deal.

Jun 10, 2011
Report Abuse
Gregory G.
Broker/Agent
San Francisco, CA

They can be as loose or detailed as you like. Their main purpose is to get the ball rolling.
.
.
Gregory Garver - Commercial Real Estate Broker
Broker License# 01716531
(415)968-6065
greg@nnnbrokersusa.com
http://www.gregorygarver.com

Jun 11, 2011
Report Abuse
Rob B.
Chandler, AZ

Patrick....
This is an often-asked question. I have found the best way I can answer it is to offer to provide a sample of an LOI that I have successfully used for many years. I will provide this at no obligation in both a short form and a long form and you can decide what will serve your purpose.
You may get this by sending an email to me at rob@capratecommercial.com.
Onward and upward... Rob Baird

Jun 14, 2011
Report Abuse

Welcome to Answers

LoopNet Answers is where the commercial real estate community shares what they know to help each other out. And it's all for free.

Ask a question to get advice from brokers, investors, professionals and local experts.

Answer questions to raise your visibility as a trusted advisor and build new relationships.

Ask a Question

Post Question