LOI vs. P&S and why?

[Matt Lefebvre]

So there seems to be two different schools of thought about writing up and getting deals done. Some people prefer the much more "informal" letter of intent (LOI) and some just write it up on a purchase and sale agreement and submit that as an offer. What does everyone do and is there a certain deal size where you write one versus the other? I only see LOI's written consistently in my market for deals ~$3M+ and usually they're off-market.

Does it make a difference?