Letter of Intent to Purchase Real Estate Template

Letter of Intent to Purchase Real Estate Template

[Buyer Letterhead or Buyer Name and Address]

[Date]

[Seller Name]
[Seller Address Line 1]
[Seller Address Line 2]
[City, State/Province, ZIP/Postal Code, Country]

Re: Letter of Intent to Purchase Real Estate – [Property Address or Description]

Dear [Seller Contact Name or “Sir/Madam”],

This Letter of Intent (“LOI”) sets forth certain preliminary terms and conditions under which [Buyer Legal Name] (“Buyer”) proposes to purchase from [Seller Legal Name] (“Seller”) the real property described below. Except as expressly stated in Section 10 (Binding and Non-Binding Provisions), this LOI is intended as a non-binding outline of key terms and a basis for preparing a formal purchase and sale agreement.

1. Parties and Property

1.1 Buyer
Name: [Buyer Legal Name]
Entity Type (if applicable): [Individual / Corporation / LLC / Other]
Address: [Buyer Address]

1.2 Seller
Name: [Seller Legal Name]
Entity Type (if applicable): [Individual / Corporation / LLC / Other]
Address: [Seller Address]

1.3 Property
Street Address: [Property Street Address]
City, State/Province, ZIP/Postal Code, Country: [City, State/Province, ZIP/Postal Code, Country]
Legal Description (if known): [Legal Description]
Property Type: [Single-family residence / Multi-family / Commercial / Land / Other]

2. Purchase Price and Payment Terms

2.1 Purchase Price
The total purchase price for the Property is expected to be:

Purchase Price: [Currency and Amount]

2.2 Payment Terms
The Purchase Price is expected to be paid as follows:

• Earnest Money Deposit: [Currency and Amount] (see Section 3);

• Balance of Purchase Price: [Currency and Amount] payable at closing, subject to adjustments set out in the formal purchase and sale agreement.

3. Earnest Money Deposit

3.1 Deposit Amount and Escrow
Within [Number] business days after execution of the formal purchase and sale agreement (the “Definitive Agreement”), Buyer will deposit the earnest money described above (the “Earnest Money”) with:

Escrow Agent / Title Company: [Escrow Agent Name]
Address: [Escrow Agent Address]

3.2 Treatment of Earnest Money
The Earnest Money will be applied to the Purchase Price at closing or handled as provided in the Definitive Agreement in the event of termination of the transaction.

4. Due Diligence and Inspections

4.1 Due Diligence Period
Buyer will have a due diligence period of [Number] days (the “Due Diligence Period”) beginning on the date the Definitive Agreement is fully signed, to inspect the Property and review information.

4.2 Access to Property
During the Due Diligence Period, Seller will allow Buyer and Buyer’s inspectors, appraisers, and advisors reasonable access to the Property at reasonable times, upon prior notice, to conduct inspections and tests that do not unreasonably disturb occupants or operations.

4.3 Documents and Information
Seller will provide Buyer with copies of available documents reasonably related to the Property, such as:

• Title reports or policies;

• Surveys (if any);

• Leases (for income-producing property);

• Service contracts;

• Recent tax bills and utility information;

• Environmental or structural reports (if any).

5. Contingencies

The obligation of Buyer to close the purchase will be subject to contingencies that will be more fully described in the Definitive Agreement. These are expected to include:

5.1 Inspection Contingency
Buyer’s satisfaction, in Buyer’s discretion, with the physical condition and suitability of the Property after completing inspections during the Due Diligence Period.

5.2 Title and Survey Contingency
Buyer’s approval of title to the Property and any survey obtained, including the ability to obtain an owner’s title insurance policy subject only to permitted exceptions.

5.3 Financing Contingency (if applicable)
Buyer’s ability to obtain financing on terms acceptable to Buyer in an amount of at least [Currency and Amount] or [Percentage]% of the Purchase Price, within [Number] days after signing the Definitive Agreement.

5.4 Appraisal Contingency (if applicable)
The Property’s appraised value being not less than [Currency and Amount] or [Percentage]% of the Purchase Price, if required by Buyer or Buyer’s lender.

6. Closing and Closing Costs

6.1 Target Closing Date
Subject to satisfaction or waiver of the contingencies described above, the closing of the purchase and sale (the “Closing”) is expected to take place on or about:

Target Closing Date: [Target Closing Date]

6.2 Location and Method of Closing
Closing may occur at the offices of the Escrow Agent, by mail, or by electronic exchange of documents, as agreed by Buyer and Seller.

6.3 Closing Costs
The parties expect that closing costs will be allocated as follows (subject to local custom and the Definitive Agreement):

• Seller to pay: [Items, such as transfer taxes, Seller’s share of escrow fees, broker commissions];

• Buyer to pay: [Items, such as recording fees, Buyer’s share of escrow fees, lender costs and charges];

• Real estate taxes, rents, and utilities to be prorated as of the Closing Date.

7. Brokers (If Any)

Each party represents that it is working with the following real estate broker(s), if any:

Buyer’s Broker: [Broker Name or “None”]
Seller’s Broker: [Broker Name or “None”]

Responsibility for any broker or commission fees will be addressed in the Definitive Agreement or separate broker agreements.

8. Confidentiality and Exclusivity

8.1 Confidentiality
Buyer and Seller will keep the terms of this LOI and any non-public information received from the other party confidential, except as required by law or as needed to consult with their own advisors, lenders, or prospective investors who are under similar confidentiality obligations.

8.2 Exclusivity / No-Shop (If Desired)
Upon Seller’s countersignature of this LOI, Seller agrees that until [End Date or Number] days after the date of this LOI (the “Exclusivity Period”), Seller will not enter into any binding agreement to sell the Property to another party. Any additional exclusivity terms may be set out in the Definitive Agreement.

9. Preparation of Definitive Agreement

9.1 Form of Agreement
Buyer or Buyer’s counsel will prepare a draft of the Definitive Agreement setting out the detailed terms and conditions of the purchase and sale, consistent with this LOI as modified by further negotiations.

9.2 Negotiation
Buyer and Seller will work in good faith to negotiate and finalize the Definitive Agreement during the Exclusivity Period or within another period agreed in writing. The transaction will not be binding until the Definitive Agreement is signed by both Buyer and Seller.

10. Binding and Non-Binding Provisions

10.1 Non-Binding Terms
Except as stated in Section 10.2, the parties acknowledge that this LOI is non-binding and does not create a legal obligation to buy or sell the Property or to sign a Definitive Agreement. Either party may discontinue negotiations at any time.

10.2 Binding Provisions
The following provisions are intended to be legally binding when this LOI is signed and delivered by both Buyer and Seller:

• Section 4.2 (Access to Property), during the Due Diligence Period, if the parties rely on this LOI for access;

• Section 8.1 (Confidentiality);

• Section 8.2 (Exclusivity / No-Shop), if included;

• This Section 10.2 (Binding Provisions); and

• Section 11 (Governing Law and Dispute Resolution).

All other sections of this LOI are statements of current intent only and are not legally binding commitments.

11. Governing Law and Dispute Resolution

11.1 Governing Law
This LOI (to the extent of the Binding Provisions) will be governed by and construed in accordance with the laws of [State/Province, Country], without regard to conflict-of-law rules.

11.2 Dispute Resolution
Any dispute arising out of the Binding Provisions of this LOI will be resolved by [specified court jurisdiction or arbitration forum] located in [City, State/Province, Country], unless the parties later agree otherwise in the Definitive Agreement.

12. Expiration

If this LOI is not signed by both Buyer and Seller on or before [Expiration Date], it will be of no further force or effect unless the parties agree in writing to extend this period.

13. Signatures

If the terms of this LOI are acceptable, please sign below to indicate your agreement to the Binding Provisions and to the non-binding business terms as a basis for preparing a formal purchase and sale agreement.

Buyer

[Buyer Legal Name]

By: _______________________________
Name: [Authorized Signatory Name]
Title (if applicable): [Title]
Date: [Date]

Seller

[Seller Legal Name]

By: _______________________________
Name: [Authorized Signatory Name]
Title (if applicable): [Title]
Date: [Date]