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Intent to Purchase Real Estate FAQs
Real Estate transactions often involve a lot of back and forth negotiations, especially within the commercial real estate market. An Intent to Purchase Real Estate letter provides the opportunity to commit previously negotiated terms to writing and to create an outline of the prospective sale. Use an Intent to Purchase Real Estate letter when you want to hammer out the terms of the deal before committing to the purchase.
The Intent to Purchase Real Estate letter is sometimes called a Letter of Intent to Purchase Real Estate or an Intent to Purchase Real Property Letter.
Let Rocket Lawyer help you create a custom Intent to Purchase Real Estate letter that you can use if:
The Rocket Lawyer Intent to Purchase Real Estate template letter includes the central elements to any Real Estate purchase, including:
An Intent to Purchase Real Estate letter is intended to set in writing terms that have been agreed upon at an earlier date before the final purchase agreement is signed. These agreements are particularly useful in commercial purchases, as well as in purchases where an agent may be seeking properties on behalf of a business and will be bringing the potential deal before a Board of Directors, for example. An Intent to Purchase Real Estate letter can also be used as a means of securing financing before the final deal goes through.
While the letter ideally contains the terms of the final deal, it is not a binding contract. This means that the owner can still choose to sell the property to someone else, and the buyer could decide to pass on the particular property as well. If both parties are ready to pursue a legally binding agreement, a Real Estate Purchase Agreement (REPA) may be signed. Because it is a legally binding document, once a Real Estate Purchase Agreement is in effect, the property owner may no longer sell the property to someone else.
A letter of intent is not an offer, it is a preliminary agreement between two parties, for example a buyer and a seller of real estate. The letter is intended to outline the terms of the potential sale, so that each party can decide whether they want to move forward with the next step of signing a legally binding contract, such as a purchase agreement.
An Intent to Purchase Real Estate letter is not binding. It's similar to the concept of a "gentleman's agreement," where the deal is likely to happen, but if it doesn't happen, there likely won't be a basis for a lawsuit to enforce the terms. Once the letter is signed, the parties can proceed with drafting a Real Estate Purchase Agreement to seal the deal.