In our experience, an LOI is a critical component in structuring a win_win transaction. We use them on virtually every deal. Here are the main benefits we see: More efficient use of time Proceeding with a clear understanding and agreement in principle. Trigger point for taking the next steps. More efficient use of time: Some people feel an LOI puts the cart before the horse.
In the real estate world a letter of intention to buy is most often the first step a buyer takes when they have found the home that they wish to purchase. While it is a non_binding contract, once the letter has been received the seller will usually take the home off the market and stop considering other offers. For those who have never written one a letter of intent sample can be found at several websites on the Internet along with instructions covered how to fill it out effectively. You will find many different versions making it easy to find one that suits your specific needs.