Letter of Intent (LOI)
A letter of intent is a non-binding (typically) pre-contract document that outlines the essential terms of a proposed commercial real estate transaction, used to confirm alignment before drafting a purchase agreement.
What it means
The LOI summarizes the principal economic terms: purchase price, deposit, due diligence period, closing date, financing contingency, and any conditions. Most provisions are non-binding, though confidentiality and exclusivity provisions are usually binding.
LOIs are valuable because they align parties on the deal before expensive legal drafting begins. A well-drafted LOI can save weeks of redlines on the purchase agreement.
We walk through the standard terms in our commercial real estate LOI guide.
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