Document background
The Residential Real Estate Letter of Intent (LOI) is a crucial preliminary document in U.S. residential property transactions, serving as a roadmap for negotiations before the creation of a binding purchase agreement. It is typically used when parties want to document their initial understanding and key commercial terms before committing to extensive due diligence or legal documentation. The LOI includes essential elements such as property details, proposed price, payment structure, timelines, and key conditions, while usually maintaining a non-binding nature except for specific provisions like confidentiality or exclusivity. This document is particularly valuable in complex residential transactions or when dealing with sophisticated parties who prefer to establish clear parameters before proceeding with formal negotiations. While requirements vary by state, the LOI must align with both federal and state-specific real estate laws and regulations.
