When "LOI" is used, it actually refers to the Letter of Indemnity. This is standard usage of the term and has been for decades. The Letter of Intent (hereafter referred to as LOI) is often used in specific domestic trades, such as in real estate or corporate mergers, but it has no standard usage in International Trade itself.
It is good to use an LOI to gauge the viability of purchasing the property based on the price an terms you are considering. IN other words, it is good to use to gauge whether or not the offer you have in mind is even going to come close to making sense to the seller.