You started with a wrong assumption - that the starting point in a commercial transaction is the LOI. As a recovering attorney and now practicing commercial broker I (almost) never use an LOI - I like to cut to the chase and submit my purchasde contract immediately. This has a few advantages: (1) It tends to eliminate the "tire-kikkers" from my practice (2) While other brokers are submitting non-binding LOI's, I am ironing out the nuts and bolts of the actual agreement. This gives my client a competative advantage and saves time. It does take a little more up front time, but I find it well worth it.
But assuming that you did submit an LOI, and assuming you are serious about the purchase, you need to immediately submit a binding offer and then obtain a binding acceptance.
As it appears you are a new investor, it behooves you to assemble a team of advisors before you even start your property search. This team usually consists of attorney, broker, accountant and maybe appraiser, depending on the complexity of the transaction and cross competance of the others in your team.
Often the broker will feel competant to advise you on the relative value of the property you are considering buying, and may have a cookie cutter contract he adapts when submitting offers. Some brokers will submit all the offers to attornies to check before submitting on behalf of the buyer. Some transactions are so complex that the attorneys handle the contracts almost exclusively. The contracts are as varied as the attornies and brokers - each having his preferences. Accountants should be consulted on an as needed basis. Even if you don't use an appraiser your lender will and that will occur after contract acceptance and before and as a condition of closing.
Jan 26, 2009