The LOI as it is now used is a misunderstood application of poorly informed brokers and traders. A more proper application based on established custom and practice in International trade, going back even to the old medieval "Law Merchant" (Lex Mercantilis) isɅ. Buyer requests a quotation _ in modern usage this is an RFQ/Request For Quotation _ NOT an LOIǎ. Seller may then reply with a Quote. Buyer confirms receipt of quoted prices, and requests an OfferǏ. Seller replies with an offer (the firm or full offer is the so_called "FCO" in Internet Broker_speak).
A professionally written LOI should contain the following information: Name of the Company the Buyer is representing, Address of the Corporation, Name of the Buyer's Mandate, Dated within the last 30 days, Information on the geographical area where property is desired, Purchase price the buyer is willing to pay including fees, Type of property desired (residential, commercial etc), Level of rehab acceptable (low, medium, heavy etc), Due diligence period the buyer is willing to accept, Closing time after due diligence, How the buyer will show Proof of Funds (POF) to the seller, Sample Letter for LOI, Real Estate Corporations, Inc. , 123, Main Street , San Francisco, CA 94101 , 鲻) 456 , November 27, 2009