All Forum Posts by: Jalen DeVine

Here is one I've used before. For extra formality, put it on a nice document with your letterhead.

Re: Non-Binding Letter of Intent to Purchase Real Property Located at [Property Address]

Dear [Recipient's Name]:

This non-binding Letter of Intent ("LOI") is submitted by [Your Name] (the "Buyer") to [Recipient's Name] (the "Seller") with the intention of setting forth certain preliminary terms and conditions for the proposed acquisition of the real property located at [Property Address], inclusive of all improvements, appurtenances, and fixtures thereon (the "Property").

1. Purchase Price
   The Buyer hereby proposes to purchase the Property for a total consideration of $[Amount] (the "Purchase Price"), which shall be subject to adjustment based on the results of the due diligence investigations and final negotiations.
2. Earnest Money Deposit
   Contingent upon the execution of a definitive Purchase and Sale Agreement (the "PSA"), the Buyer shall deposit earnest money in the amount of $[Amount] (the "Earnest Money") into an escrow account designated by the mutual agreement of the parties. The Earnest Money shall be refundable under the terms to be specified in the PSA.
3. Due Diligence Period
   The Buyer shall be afforded a due diligence period of [Number] days commencing upon the full execution of the PSA (the "Due Diligence Period"). During the Due Diligence Period, the Buyer shall have the right to conduct, at its sole cost and expense, any and all inspections, examinations, appraisals, surveys, environmental assessments, and other evaluations deemed necessary or appropriate by the Buyer.
4. Financing Contingency
   The Buyer's obligations under the PSA shall be contingent upon obtaining financing in an amount and on terms satisfactory to the Buyer, in the Buyer's sole discretion. The Buyer agrees to use commercially reasonable efforts to secure such financing within [Number] days following the execution of the PSA.
5. Closing Date
   The closing of the transaction (the "Closing") shall occur on or before [Proposed Closing Date], or such other date as may be mutually agreed upon by the parties in writing, subject to the satisfaction of all conditions precedent set forth in the PSA.
6. Condition of Title
   The Seller shall convey to the Buyer good and marketable fee simple title to the Property by warranty deed, free and clear of all liens, encumbrances, leases, tenancies, easements, restrictions, and other exceptions to title, except as may be expressly approved by the Buyer in writing.
7. Property Documentation
   The Seller shall deliver to the Buyer, within [Number] days of the execution of the PSA, all documents and information relating to the Property in the Seller's possession or control, including but not limited to, title reports, surveys, environmental reports, leases, service contracts, permits, and warranties.
8. Non-Binding Nature
   This LOI is intended solely as an expression of the mutual intent of the parties with respect to the proposed transaction and does not constitute a binding agreement, except with respect to Section 9 below. The parties acknowledge and agree that neither party shall have any liability or obligation to the other with respect to the matters set forth herein unless and until a definitive PSA has been executed and delivered by both parties.
9. Confidentiality
   The parties agree that all information exchanged pursuant to this LOI and the negotiation of the PSA shall be kept strictly confidential and shall not be disclosed to any third party, except as may be required by law or as necessary to obtain third-party consents and approvals.

We trust that the terms outlined in this LOI are acceptable and look forward to your favorable response. Please do not hesitate to contact me at [Your Phone Number] or [Your Email Address] should you have any questions or require further clarification.

Sincerely,

[Your Name]
[Your Title, if applicable]
[Your Company, if applicable]

Hope this helps.

That's a pretty good interest rate and fee cost. Has hard money interest rates increased since this post?