What Is A Letter of Intent?

What makes a letter of intent and why some listing agents request it, especially in commercial real estate? Is it really necessary?
In Buying Property - Asked by Iyabo O. - Apr 23, 2009
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Aaron M.
Schererville, IN

It helps save time and money is the easiest way to justify a Letter of Intent (LOI) Instead of paying for a lawyer for purchase agreement or lease before you may know if you have a deal. A LOI helps guide the purchase agreement/lease later after it is accepted. LOI's are typically non-binding and are almost an abstract of the final agreement.

Apr 23, 2009
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Julie T.
Listing Administrator
Houston, TX

A letter of intent or LOI is a document outlining an agreement between two or more parties before the agreement is finalized.
The purposes of an LOI may be:
- to clarify the key points of a complex transaction for the convenience of the parties.
- to declare officially that the parties are currently negotiating, as in a merger or joint venture proposal.
- to provide safeguards in case a deal collapses during negotiation.

Apr 23, 2009
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