Again, this is the standard agreement generally used in most real estate transactions. It is a formal proposal, usually drafted by your real estate agent or broker along with you. If the Seller agrees to all of the terms and conditions in the contract, they will simply sign the document. It then becomes a legally_binding contract between Buyer and Seller.
Why use a Letter of Intent?A Letter of Intent is a great tool to use in order to gauge the viability of purchasing a property given the price and terms you are looking for.A lot of times, I will use a LOI when I am trying to purchase an investment property for much less than the Seller is listing the property. I may also use a LOI if I am unfamiliar with the property and the area. I like to use a LOI in these cases to start the negotiating process while I do some due diligence work during the process.