Generally presented in the preliminary stages of a purchase, a letter of intent is a common method for expressing an interest in acquiring a property. Though not legally binding on either you or the seller, the letter of intent can be a helpful way to assure a seller of your interest to purchase while stating in common language the conditions under which you intend to buy the property.
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Address the letter specifically to each of the parties involved with this purchase. Include any individual names as well as the names of any legal entities involved (such as LLCs).
Begin writing your letter in a casual yet straightforward manner, mentioning the purchase price of the property and the terms of payment that you propose. Include a time frame for the delivery of necessary documents, such as the purchase and sale agreement. Decide on a sufficient time frame for negotiating the final agreement to purchase, and include a date in your letter that specifies when the letter of intent will expire.
Provide a physical description of the property for sale, making sure to include necessary details such as the square footage, address and acreage (if applicable). If desired, you may also include a general description of improvements.
Include a list of items required for due diligence, such as access to accounting or construction-related information concerning the property.
Write in a financing contingency, as well as escrow costs and prorated payments, wherein you detail a plan of action should the property be purchased on a date not on the first or last day of a month. Mention any broker fees that may be attached to the agreement.
Provide a closing date, which is the date by which the parties intend to finalise the transaction.
End the letter with a legal reassurance, specifically stating that the letter is nonbinding. Including this will allow you the flexibility to walk away from the deal should certain requests not be met, and further distinguishes your letter of intent from the purchase and sale agreement.
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