A letter of intent can help commercial buyers and sellers determine whether they are aligned on the key terms of a transaction before investing time and resources into negotiating a sale agreement. It provides a framework for describing the most significant points, including purchase price, financing terms, earnest money, due diligence, inspections, closing date, and other transaction-specific provisions.
Unlike a purchase and sale agreement, the Letter of Intent is generally not intended to create a binding obligation to buy or sell the property. Instead, it serves as a starting point for negotiations before moving forward with a formal sale agreement. The form also includes an optional Duty to Negotiate provision that, if selected, allows the parties to agree to negotiate in good faith for a specified period and may require the seller to temporarily remove the property from the market while negotiations are underway.
In this training we will walk through the OREF Letter of Intent to Purchase (C-514). You’ll gain a better understanding of how the form acts as the foundation for preparing a Commercial Real Estate Sale Agreement (C-501)
Whether you’re new to commercial transactions or looking to become more familiar with OREF’s commercial forms library, this walkthrough will help you understand the role of the Letter of Intent in the negotiation process.
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Always check with your principal broker or legal counsel to ensure that you are following any policy requirements of your brokerage. All comments and responses from OREF or its staff, managers, and volunteers are non-legal opinions made for general purposes. Each Forms subscriber must rely solely upon their Principal broker or personal legal counsel for specific advice and instruction. You and your client should independently confirm that the Form(s) you use are legally suitable for the purposes intended and that they are current with respect to all laws and regulations.
