Letter of Intent to Purchase Real Estate

[Michael Prim]

Curious if anyone is using or has experience with using a Letter of Intent to purchase real estate? See link: https://www.biggerpockets.com/files/user/PRoob/fil...

In talking with my attorney, he was familiar with this type of letter, and said it could be used for both commercial and residential properties. I asked specifically about multi-family units, be he said it could also be used for SFH.

However, I introduced this to my agent and she had some push back:

"As far as the form is concerned, I do not think a seller or attorney would go for it - there's nothing legally binding in addition to no "skin in the game" for the buyer. If I were representing a seller, I would be under no obligation to present such a form since it does not represent a true bonafied offer.If I decided to go ahead and present, I would advise the seller not to accept - again since it a not a bonafied offer and I would conclude that the form did not represent a "ready, willing and able buyer" In addition, in most of the areas around here and, especially in this price range, it is a seller's market and there would be no reason to accept such a form."

 

 My intention with this letter, as I've heard other investors using them (I believe I heard a biggerpockets podcast talking about them), was to speed up the offer/acquisition process, and spend less time touring properties with a seller who isn't even in the same ball park as me, when it comes to the purchase price.

Any thoughts, suggestions when using something like this? Also, to my agent's point, why would a seller entertain something like this? How is this to their advantage?

Any help is appreciated.

Thanks,

Mike