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Letter Of Intent To Purchase Property

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    The difference between a real estate letter of interest and a letter of intent to purchase property is that the letter of intent is a formal offer. It can be considered a legal document saying “I am offering you this amount for this property”.

    The letter of intent to purchase property documents the terms of the property’s purchase, such as verbally agreed upon repairs to the property and the negotiated property price. The letter of intent sets an agreed upon purchase price, before absolutely committing to the sale and locking it in via a contract.

    A letter of intent does not prohibit the property owner from selling the property to someone else in the interim, unless earnest money has been deposited. It does provide a starting point for the purchasing contract, should the letter of intent be accepted.

    The letter should have a time period for the offer. If negotiations drag on after that point, a new offer may be made or the intended buyer has the right to walk away.

    The letter of intent to purchase property should outline how the buyer will pay for the property, such as stating that the purchase will be made with cash or conditioning the purchase on the ability to secure a mortgage.

    Unlike the final real estate contract, the letter of intent does not have to be notarized or witnessed. You can use a template to create a letter of intent to purchase property, but a real estate agent or attorney should be used to draft the formal purchase agreement.

    Sample Letter Of Intent To Purchase Property

    Date: 01/01/2015
    To: Property Owner
    From: Intended Buyer
    Re: Residential property located at 1234 Street, City, State

    Dear Seller,

    This letter of intent to purchase property is to set forth the terms of our discussed property transaction. The terms and conditions in this letter do not become binding until a purchase agreement is finalized and signed by both parties.

    The basic terms of the agreement are:

    1. Purchaser: Buyer name
    2. Vendor: Seller name represented by realtor name
    3. Property: 1234 Street, City, State, free and clear of all liens, charges and titles at closing except those recorded on the title with the exception of the seller’s mortgage (if any)
    4. Purchase Offer: $123,4567

    The mortgage amounts are listed here
    Initial deposit
    Any additional deposits
    Balance

    5. Deposit: Upon execution of the agreement, the purchaser will deposit the amount of (deposit amount), which is fully refundable if conditions are not satisfied or waived in writing by the purchaser. Otherwise, the deposit is to be applied to the purchase price at closing. If the purchaser defaults, the deposit is retained by the vendor.

    6. Conditions Precedent: The purchaser must meet the following conditions within sixty days of the execution and delivery of the agreement.
    There must be a completed inspection of the property and certification of habitability.
    The purchaser must have satisfactory mortgage financing for the property.
    The title search must be completed and the title must be found to be clean.
    Closing will complete within 45 days of the due diligence / inspection period.

    7. Within thirty (30) days after full negotiation of this limited binding letter of intent, the buyer and seller shall negotiate a mutually satisfactory contract that will meet the terms set in this letter.

    Sincerely,

    Intended Purchaser
    Date

    Purchaser’s Contact Information Here

    Click here if you are looking for letter of intent to vacate.

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