Fillable Form Residential Purchase Letter of Intent

What is a Residential Purchase Letter of Intent?

A Residential Purchase Letter of Intent allows a prospective buyer to express his or her interest in purchasing residential property from a seller. An LOI to purchase residential property is a document that outlines the terms of a residential sale. Its purpose is to create a draft agreement that can be finalized as a contract between the buyer and the seller in the future.

A letter of Intent to purchase residential property is primarily a non-binding document that is used to negotiate certain things about the property prior to drafting an official contract. However, an LOI to purchase residential property varies. Depending on how it is drafted, an LOI can be intended as a binding document. When it is, it is important that both parties must include all the disclaimers and terms in purchasing a property. Some of the most important things that should be present are the following:

• Selling price;
• Payment terms;
• Standstill agreement;
• Binding effect;
• Buying conditions; and
• Other provisions

How to fill out a Residential Purchase Letter of Intent?

A letter of Intent to purchase residential property gives opportunities for both the seller and the buyer to negotiate terms until they reach an agreement. Once an LOI is mutually agreed upon, they can now proceed to draft a formal contract. While hiring a lawyer is not advisable at this point, it is important that both parties go through each concern and request carefully. That being said, both parties should state their intentions clearly. The seller must be transparent about the condition of the property being sold including its flaws and damages. On the other hand, the buyer must state the terms he intends to pay the property, or if his purchase is conditional on the financing grant that he will receive.

Sender’s Name

Enter the full name of the sender.

Address

Enter the house number and the street of the sender.

City, State, ZIP

Enter the city, state, and ZIP code of the sender.

Effective Date

Enter the date.

Recipient’s Name

Enter the full name of the recipient.

Address

Enter the house number and street name of the recipient’s address.

City, State, ZIP

Enter the city, state, and ZIP code of the recipient’s address.

Section I: The Buyer

Enter the full name of the buyer.

Section II: The Seller

Enter the full name of the seller.

Section III: Property Address

Enter the address of the property the buyer intends to purchase, including the house or apartment number, street, city, state, and ZIP code. Enter additional descriptions if applicable.

Section IV: Purchase Price

Enter the price, in word form and number form, the buyer intends to purchase the property.

Section V: Purchase Terms

Enter the agreed-upon terms of payment.

Section VI: Bank Financing

Mark the appropriate box to indicate whether the purchase of the property will be based on the buyer's ability to obtain bank financing. You may select:

• Conditional
• Not conditional on their ability to obtain financing.

If the purchase is conditional on financing, enter the terms of payment.

Section VII: Closing

Enter the date (month, year) the closing shall occur. This section also states that any extension to the closing date must be agreed upon in writing by the parties involved.

Section VIII: Closing Cost

Mark the appropriate box to indicate the party responsible for all the costs associated with the closing. You may select:

• The buyer
• The seller
• Both parties bearing their own expenses.

Section IX: Possession

Enter the date (month, year) the possession of the property will be given. This section also states that any extension to the possession date must be agreed upon in writing by the parties involved.

Section X: Property Inspection

Enter the number of days the buyer can inspect the property after the purchase agreement has been made. In the next paragraph, enter the additional number of days the buyer has to report any new disclosures to the seller in writing.

If the involved parties could not reach a mutual agreement, enter the number of days after the delivery of written disclosures the Purchase Agreement can be terminated with any earnest money being returned to the buyer.

Section XI: Binding Effect

Mark and enter your initials on the appropriate box to indicate the binding effect of the Residential Purchase Letter of Intent. You may select:

• Binding
• Non-Binding.

Binding states that both parties acknowledge that remedies at law will be inadequate for any breach of this letter of intent and that this LOI shall be enforceable by specific performance. Meanwhile, Non-binding states that both parties acknowledge that this LOI to purchase residential property is not enforceable by any party. It also states that the purpose of this LOI is to reach an agreement in the future, to which both parties are not bound.

Section XII: Standstill Agreement

Enter the date (month, year) the seller agrees not to engage in negotiations for the sale of the property with any other party unless there is an agreement to terminate this letter of intent.

Section XIII: Additional Provisions

Enter additional provisions agreed upon by both the seller and the buyer.

Section XIV: Currency

This section states that all mentions of currency or the usage of the “$” icon refer to the US Dollar.

Section XV: Governing Law

Select the state where this letter of intent shall be governed under.

Section XVI: Acceptance

Enter the date (month, year) one should sign and return a duplicate copy of this LOI once he or she agrees to the terms specified in this document.

Buyer

Buyer’s Signature:

Affix the buyer’s signature.

Date:

Enter the date the form was signed.

Print Name:

Enter the full name of the buyer.

Seller

Seller’s Signature:

Affix the seller’s signature.

Date:

Enter the date the form was signed.

Print Name:

Enter the full name of the seller.

What is the difference between an LOI and a purchase agreement?

A Letter of Intent to Purchase Residential Property is a document that offers the most salient details of the purchase offer. Typically an LOI only includes a purchase price, the requested timeline to close, and other contingencies. It does not include specific agreements and conditions unlike how a purchase agreement would look like.

After the parties arrive at an agreement, they proceed to draft a formal offer with use of a formal offer. The purchase agreement now contains all proposed terms included and is more extensive than an LOI.