How to write a letter of intent to purchase land

Written by cameron easey
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Writing a letter of intent is a way for parties in a transaction, when buying land or real estate, to have common ground before finalising an agreement. A letter of intent contains all of the vital information a buyer and seller need to complete the purchase or transaction. This type of letter is non-binding, which means there are no penalties for cancelling or backing out of a proposed agreement. You can write a letter of intent by first determining what to include in the letter.

Skill level:
Moderate

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Things you need

  • Paper
  • Pencil
  • Word processor

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Instructions

  1. 1

    Write an introduction for your letter of intent. You will want to include the name of the proposed buyer, a description of the land to be purchased and the name of the person selling the land.

  2. 2

    Include in the first section of the letter the agreed to purchase price for the land.

  3. 3

    Include in the second section the time frame required to complete certain items, including the inspection and financing.

  4. 4

    Include in the third section the closing date for the transaction.

  5. 5

    Include in the fourth section who will be paying the closing costs. This can be the buyer, the seller or both.

  6. 6

    Include in the fifth section the amount of broker fees that are to be paid, if a broker was used to help complete the transaction. This section is typically included to make sure the broker is paid.

  7. 7

    Provide a summary that includes language indicating the letter of intent is non-binding. This means that a seller or purchaser can walk away from the transaction if one or the other has a change of heart.

  8. 8

    Type up the letter on a word processor program and then print it out.

Tips and warnings

  • A letter of intent establishes an agreement in principle that can help conclude a transaction to buy or sell land.
  • You might want to include more information in your letter of intent if it is appropriate or is required to be disclosed.
  • A letter of intent should not be considered a definite agreement to buy or sell a piece of land.

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