Examples of Letter of Intent for Real Estate Agents

Published On: 20/03/2025

A Letter of Intent (LOI) is a formal document that outlines the preliminary terms of a real estate transaction before entering a binding agreement. It is commonly used in residential and commercial real estate to express serious interest in a property, negotiate essential terms, and set the stage for further discussions. Although not legally binding, an LOI serves as a crucial step in ensuring that both parties agree on fundamental terms before proceeding to a formal contract.

In this article, we will discuss the key components of a Letter of Intent for real estate transactions and provide two detailed examples—one for a buyer and another for a seller.

Key Components of a Real Estate Letter of Intent

A well-crafted Letter of Intent should include the following elements:

Date: When the letter is written.
Parties Involved: The buyer(s) and seller(s), along with their contact details.
Property Description: Address, parcel number, or any relevant details.
Proposed Terms: The key financial aspects, including price, deposit, and payment terms.
Due Diligence: Any inspections or contingencies required.
Closing Timeline: The expected date for finalizing the transaction.
Conditions for Final Agreement: Any conditions that must be met before signing a final contract.
Non-Binding Statement: A clause clarifying that the LOI is not legally binding.
Signatures: Space for both parties to sign.

Example 1: Letter of Intent from a Buyer

[Your Name]
[Your Address]
[City, State, ZIP Code]
[Your Phone Number]
[Your Email Address]
[Date]

[Seller's Name]
[Seller's Address]
[City, State, ZIP Code]

Subject: Letter of Intent to Purchase [Property Address]

Dear [Seller's Name],

I am pleased to submit this Letter of Intent (LOI) to express my interest in purchasing the property located at [Property Address]. This letter outlines the preliminary terms and conditions of my offer, subject to further negotiation and execution of a formal Purchase Agreement.

1. Purchase Price & Terms

I propose to purchase the property for $[Proposed Amount], with an earnest money deposit of $[Deposit Amount], to be held in escrow by [Escrow Agent Name].

2. Due Diligence & Inspection Period

I request a due diligence period of [Number] days, during which I will conduct inspections, property evaluations, and a title review. This period will begin upon the mutual execution of the Purchase Agreement.

3. Financing & Closing Date

This purchase is [contingent/not contingent] on financing. If financing is required, I intend to obtain a mortgage loan with an estimated down payment of [Percentage]%. I propose a closing date of [Closing Date], subject to all conditions being met.

4. Conditions Precedent

The following conditions must be met before proceeding with the formal agreement:

A satisfactory home inspection report
A clear and marketable title
Approval of financing (if applicable)

5. Non-Binding Agreement

This letter serves as a good faith effort to negotiate the terms of the transaction. It is not legally binding, and a formal contract must be executed to create an enforceable agreement.

Please review this proposal, and let me know if you are open to further discussions. I look forward to working together to finalize this transaction.

Sincerely,
[Your Name]
[Your Signature]

Example 2: Letter of Intent from a Seller

[Your Name]
[Your Address]
[City, State, ZIP Code]
[Your Phone Number]
[Your Email Address]
[Date]

[Buyer's Name]
[Buyer's Address]
[City, State, ZIP Code]

Subject: Letter of Intent to Sell [Property Address]

Dear [Buyer's Name],

I appreciate your interest in purchasing my property located at [Property Address]. I am pleased to present this Letter of Intent (LOI) outlining my terms and conditions for the sale, subject to negotiation and execution of a final Purchase Agreement.

1. Purchase Price & Terms

I propose to sell the property for $[Asking Price], with an earnest money deposit of $[Deposit Amount], to be deposited in escrow upon signing the Purchase Agreement.

2. Closing & Possession Date

I propose a closing date of [Closing Date], with full possession transferred upon completion of the sale. Any required property repairs or contingencies should be specified in the final agreement.

3. Due Diligence & Contingencies

The buyer may conduct property inspections within [Number] days of contract execution. I agree to provide full property disclosures and necessary documentation.

4. Financing & Payment Method

This sale is [cash/financed], and I request confirmation of the buyer’s financing pre-approval before finalizing the contract. If financing is involved, the buyer must provide a letter of commitment within [Number] days of agreement signing.

5. Non-Binding Agreement

This letter represents a preliminary agreement between both parties and is not legally binding. A formal Purchase Agreement will be drafted and signed to finalize the transaction.

I look forward to discussing the next steps with you and working towards a successful sale.

Best regards,
[Your Name]
[Your Signature]

Example 3: Letter of Intent for Commercial Lease

[Your Name]
[Your Brokerage Name]
[Your Address]
[City, State, ZIP Code]
[Your Phone Number]
[Your Email Address]
[Date]

[Landlord’s Name]
[Landlord’s Address]
[City, State, ZIP Code]

Subject: Letter of Intent for Leasing [Property Address]

Dear [Landlord’s Name],

I am pleased to submit this Letter of Intent (LOI) on behalf of my client, [Tenant’s Name], to lease the property located at [Property Address]. This letter outlines the proposed terms and conditions, which will be subject to a formal lease agreement.

1. Lease Term & Rent

Lease Term: [Number of Years] years
Monthly Rent: $[Proposed Rent] per month
Security Deposit: $[Deposit Amount]

2. Property Use

The tenant intends to use the premises for [Type of Business]. Any modifications or improvements required for business operations will be subject to landlord approval.

3. Renewal & Exit Options

Renewal: Tenant shall have the option to renew the lease for [Number] years with a rent increase of **[Percentage]% per renewal period.
Early Termination: Tenant may terminate the lease early with [Number] months’ notice, subject to an agreed-upon termination fee.

4. Responsibilities

The landlord will be responsible for [List of responsibilities, e.g., building maintenance, property taxes].
The tenant will be responsible for [List of responsibilities, e.g., interior maintenance, utilities].

5. Non-Binding Agreement

This letter is intended to summarize key lease terms and is not legally binding. A formal lease agreement will be drafted and signed to finalize the transaction.

We look forward to discussing this proposal further and reaching a mutually beneficial lease agreement.

Best regards,
[Your Name]
[Your Signature]

Example 4: Letter of Intent for Investment Property Purchase

[Your Name]
[Your Brokerage Name]
[Your Address]
[City, State, ZIP Code]
[Your Phone Number]
[Your Email Address]
[Date]

[Seller’s Name]
[Seller’s Address]
[City, State, ZIP Code]

Subject: Letter of Intent to Purchase Investment Property at [Property Address]

Dear [Seller’s Name],

On behalf of my client, [Investor’s Name], I am pleased to submit this Letter of Intent (LOI) expressing interest in purchasing the investment property located at [Property Address]. The following terms are proposed for further discussion and negotiation:

1. Purchase Price & Payment Terms

Proposed Purchase Price: $[Amount]
Deposit: $[Deposit Amount], to be held in escrow by [Escrow Agent Name]
Payment Structure: [All cash / Seller financing / Mortgage loan]

2. Due Diligence & Contingencies

Due diligence period of [Number] days for property inspections, title review, and financial analysis.
Contingent upon satisfactory [appraisal, financing approval, environmental inspection].

3. Closing Timeline

Expected closing date: [Closing Date]
Transfer of ownership and possession upon closing.

4. Investment Property Income & Expenses

The seller agrees to provide [rent roll, lease agreements, expense reports] for review within [Number] days of LOI acceptance.
The property is currently [occupied/vacant], and all leases will be transferred to the buyer at closing.

5. Non-Binding Agreement

This Letter of Intent represents a preliminary agreement and is not legally binding. A formal Purchase Agreement will be executed upon finalization of terms.

We appreciate your consideration and look forward to finalizing the details of this transaction.

Sincerely,
[Your Name]
[Your Signature]

Conclusion

A Letter of Intent is a valuable tool for setting clear expectations in real estate transactions. Whether you're a buyer or seller, using an LOI allows both parties to agree on key terms before drafting a legally binding contract. By incorporating the essential elements mentioned in this article, you can ensure a smooth negotiation process.

If you're in the market to buy or sell a property, consider drafting a well-structured LOI to streamline your transaction and minimize potential misunderstandings.