Apartment Investing _ Letter of Intent Or Offer to Purchase? Which is better, a Letter of Intent or Purchase Offer? This is a frequent question for apartment investors looking to make a purchase. Before we get too far, here is my quick definition of the two documents: 1. Purchase Offer, or Purchase Agreement _ A legal document that describes the price, terms, contingencies, and other details of how a buyer would be willing to purchase a piece of real estate. 2. Letter of Intent (LOI) _ A preliminary document outlining the price, terms, and other transaction details that a buyer would be be interested in purchasing a piece of real estate.
What is the letter of intent? The letter of intent states an understanding of the proposed terms of the impending sale between the two parties. It is not merely a preliminary document that defines the terms and conditions of a proposed sale but is also not a legally binding contract nor is it enforceable in a court of law. It does, however, specify the rights and obligations of the parties concerned. The parties are only stating that they intend to enter into an agreement, the contents of which are covenants that will later bind the parties together in their proposed business acquisition.