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Purchase Letter of Intent

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PURCHASE LETTER OF INTENT

This Purchase Letter of Intent (the "LOI") is entered into as of by and between Buyer Name: with address and Seller Name: with address .

RECITALS

WHEREAS, Seller is the owner of the real property, improvements and appurtenances described as:

WHEREAS, Buyer desires to acquire, and Seller desires to sell, the Property on the terms and conditions set forth herein, and the parties desire to set forth their mutual understanding regarding the principal commercial terms of a proposed purchase and sale transaction.

WHEREAS, except as expressly provided in this LOI, the parties intend that this LOI shall be non-binding and used solely as the basis for negotiation of a definitive Purchase and Sale Agreement.

NOW, THEREFORE

The parties agree as follows:

1. PURCHASE AND SALE

Seller intends to sell and Buyer intends to purchase the Property on the terms set forth in this LOI and subject to the negotiation and execution of a definitive Purchase and Sale Agreement (the "Definitive Agreement"). The Definitive Agreement will include customary representations, warranties, covenants and indemnities for transactions of this type.

2. PURCHASE PRICE

The proposed purchase price for the Property shall be (the "Purchase Price"), payable in accordance with the Definitive Agreement.

3. DEPOSIT / EARNEST MONEY

Upon execution of the Definitive Agreement, Buyer shall deliver to as escrow agent an earnest money deposit in the amount of (the "Deposit"). The terms for release, application and forfeiture of the Deposit shall be set forth in the Definitive Agreement.

4. DUE DILIGENCE

Buyer shall have an exclusive due diligence period of days following execution of the Definitive Agreement (the "Due Diligence Period") to inspect the Property, review title and survey, environmental and financial matters, and to satisfy itself in Buyer’s sole discretion. Seller shall cooperate reasonably with Buyer during the Due Diligence Period and provide access to documents and the Property as reasonably requested.

5. CLOSING

Subject to satisfaction or waiver of the conditions set forth in the Definitive Agreement, the closing of the purchase and sale (the "Closing") shall occur on or before or such other date as the parties may mutually agree in writing. At Closing, Seller shall deliver marketable fee simple title free of undisclosed liens and encumbrances, except as otherwise agreed.

6. CONDITIONS TO CLOSING

Closing shall be conditioned upon, among other things: (a) the accuracy of the parties' representations and warranties as set forth in the Definitive Agreement; (b) Buyer’s satisfaction with title, survey, environmental and physical inspections; and (c) receipt of all necessary consents, approvals and permits. Any material breach by either party of its obligations under the Definitive Agreement prior to Closing shall permit the non-breaching party to terminate the Definitive Agreement as provided therein.

7. TITLE, SURVEY AND TAX MATTERS

Buyer shall, at Buyer’s expense, obtain a title commitment and survey. Seller shall provide reasonably requested documents and cooperate to permit issuance of customary title insurance. Prorations of taxes, assessments, utilities and other customary items shall be as set forth in the Definitive Agreement.

8. REPRESENTATIONS AND WARRANTIES

The Definitive Agreement will contain representations and warranties customary for transactions of this nature, including without limitation Seller’s ownership and authority to sell the Property, compliance with laws and absence of undisclosed material liabilities, and Buyer’s authority and financial capacity to consummate the transaction.

9. CONFIDENTIALITY AND EXCLUSIVITY (BINDING)

For a period of days from the date of this LOI, Seller shall not solicit, initiate or entertain offers from third parties relating to the sale of the Property and shall negotiate exclusively with Buyer. All non-public information exchanged between the parties shall be held in confidence and used solely for the purpose of evaluating and consummating the transaction; provided, however, that disclosures required by law or to legal and financial advisors who are bound by confidentiality shall be permitted.

10. EXPENSES

Each party shall bear its own expenses incurred in connection with the negotiation, preparation and execution of this LOI and the Definitive Agreement, including legal, accounting and other professional fees, except as otherwise provided in the Definitive Agreement.

11. NOTICES

All notices and other communications required or permitted under this LOI shall be in writing and delivered to the addresses below (or to such other address as a party may designate in writing):

12. GOVERNING LAW

This LOI and any Definitive Agreement shall be governed by and construed in accordance with the laws of the State of , without regard to conflict of laws principles.

13. ENTIRE AGREEMENT

This LOI constitutes the entire understanding of the parties with respect to the subject matter hereof and supersedes any prior discussions, proposals or agreements, whether written or oral, regarding the proposed transaction, except that any separate confidentiality agreement between the parties shall remain in effect.

14. SEVERABILITY

If any provision of this LOI is held to be invalid, illegal or unenforceable, the remaining provisions shall remain in full force and effect and shall be construed so as to effectuate the original intent of the parties to the fullest extent permitted by law.

15. AMENDMENTS; WAIVER

This LOI may be amended or supplemented only by a written instrument executed by both parties. No failure or delay by either party in exercising any right shall operate as a waiver of that right.

16. COUNTERPARTS

This LOI may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart by electronic means shall be effective to bind a party to this LOI.

17. TERM AND TERMINATION

Unless earlier terminated by mutual written agreement, this LOI shall automatically terminate on . Termination of this LOI shall not relieve any party of its obligations under any binding provision of this LOI.

The parties acknowledge that except for Sections 3 (Deposit), 9 (Confidentiality and Exclusivity), 10 (Expenses), 11 (Notices), 12 (Governing Law) and this paragraph, this LOI is intended solely as a non-binding expression of the parties' present intentions and does not create any binding obligation to consummate the transaction unless and until the Definitive Agreement is executed and delivered by both parties.

Buyer Printed Name:

By:

Date:

Seller Printed Name:

By:

Date:

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What a Purchase Letter of Intent Is and when it’s used

A Purchase Letter of Intent (LOI) is a preliminary written document used to record basic terms under which a buyer proposes to purchase assets, real property, or a business. It summarizes core economic terms, deposit arrangements, contingencies, timelines, and closing conditions so parties can confirm shared expectations before drafting a definitive purchase agreement. An LOI is frequently expressly non-binding for negotiations but can include narrowly binding provisions such as confidentiality or exclusivity. Electronic LOIs are commonly executed in the United States consistent with applicable e-signature laws.

Why a Purchase Letter of Intent matters for your transaction

A Purchase Letter of Intent clarifies preliminary terms, reduces misunderstandings, and frames negotiation priorities. It helps parties identify contingencies, set deadlines, guide due diligence, and preserve negotiating leverage while the definitive purchase agreement is prepared.

Why a Purchase Letter of Intent matters for your transaction

Who typically prepares and reviews a Purchase LOI

Typical participants who use a Purchase Letter of Intent include buyers, sellers, brokers, and counsel at the start of a transaction.

  • Buyers — corporate or individual purchasers evaluating price, terms, and due diligence timelines.
  • Sellers — owners or listing agents outlining acceptable terms and preserving leverage during negotiations.
  • Brokers and attorneys — coordinate LOI language, conditions, and transition planning for closing.

Engage the appropriate representatives—agents, escrow officers, and attorneys—when transactions involve specialty assets, regulatory approvals, or significant tax consequences.

Step-by-step: preparing and executing a Purchase LOI

Follow a clear sequence to prepare, review, and execute a Purchase Letter of Intent to avoid misunderstandings and preserve each party's options before a binding contract is negotiated.

  • 01
    Draft LOI: Summarize proposed price, deposit, contingencies, and timeline.
  • 02
    Negotiate Terms: Clarify obligations, confidentiality, and exclusivity windows.
  • 03
    Sign LOI: Execute electronically or on paper per agreed format.
  • 04
    Proceed to Diligence: Open inspections, confirm financing, and draft final agreement.

Six essential sections to include in a professional LOI

A professional Purchase Letter of Intent contains clear statements of intent, core economic terms, contingencies, timelines, confidentiality provisions, and any limited binding obligations the parties choose to include.

Intent Statement

Begin with a concise declaration of intent describing whether the LOI is non-binding or contains specific binding clauses like confidentiality or exclusivity, and explain scope of the intended transaction.

Price & Terms

Specify purchase price, currency, payment schedule, allocation of adjustments, and whether price is subject to post-due-diligence change; include escrow agent details and payment conditions.

Contingencies

List material conditions precedent such as financing approval, satisfactory inspections, title review, and regulatory consents with explicit deadlines and exit rights or cure periods.

Timeline

Provide a schedule for deposit deadlines, due diligence period, signing of the definitive agreement, and closing date to coordinate expectations and third-party obligations, including milestones.

Confidentiality

Include nondisclosure terms to protect sensitive information shared during negotiations, specify permitted disclosures, duration of confidentiality, remedies for breach, and carve-outs for legal disclosures.

Binding clauses

Identify any provisions intended to be binding — often confidentiality, exclusivity, or reimbursement of due diligence costs — and use explicit language to avoid unintended obligations.

Core data elements every Purchase LOI must capture

Buyer Name: Full legal name as on ID
Seller Name: Full legal name or registered entity
Asset Details: Address or inventory and identifier
Purchase Price: Exact dollar amount and currency
Deposit Amount: Amount, escrow, and deadline
Effective Date: Enter as MM/DD/YYYY format

Practical tips to complete a Purchase LOI accurately

Follow these best practices to make the Purchase Letter of Intent clear, enforceable where intended, and efficient to execute.

Use precise, unambiguous language throughout
Avoid vague terms such as 'reasonable' or 'market value' without definition; define payment mechanics, adjustment formulas, and any deadlines to prevent disputes and minimize the need for costly renegotiation prior to the definitive agreement.
Attach exhibits, schedules, and inventories
Include exhibits for property descriptions, asset lists, title reports, or financial schedules; attach escrow instructions and contact information for agents and counsel so reviewers can verify details without repeated document exchange.
Specify remedies, defaults, and exit rights
If a party breaches a binding clause, state remedies such as liquidated damages or termination rights; for non-binding items, clarify that parties retain negotiation rights to prevent unintended contractual obligations.
Confirm signatory authority and dates
Ensure signers have authority to bind their organization; include job title or officer role, sign date, and, if required, board approvals or corporate resolutions to avoid challenges to enforceability.

How to configure an online LOI workflow

Typical online setup includes template pre-fill, signer order, authentication, reminders, and archival options to streamline execution and recordkeeping.

Field Configuration
Document Template Pre-fill common fields and attach exhibits automatically
Signer Order Sequential or parallel routing as required
Authentication Email, SMS code, or stronger KBA when needed
Reminders & Storage Automated reminders and PDF/A archival for records

Where to send or file the signed LOI

Routing options depend on transaction preferences: send signed copies to counsel, escrow agents, internal stakeholders, and maintain an archival copy in a secure repository.

  • Upload: Place the executed LOI in a secure repository.
  • Add Signers: Assign signing roles and contact details.
  • Send for signature: Deliver via secure link or email to signatories.
  • Archive: Store final PDFs and audit trails per retention rules.

Technical options for sharing and signing a Purchase LOI

Delivery options for a Purchase Letter of Intent include email, secure link, in-person exchange, or filing with counsel or escrow agent depending on preferences and legal requirements.

  • Email / Link: Send as encrypted PDF or signing link
  • In-person exchange: Wet-sign paper and scan to archive
  • Escrow / Counsel: File with escrow agent or attorneys

Common LOI deadlines and typical timelines

Typical Purchase LOI timelines set deadlines for deposits, due diligence, responses, and target closing dates to keep the transaction on schedule.

Response Period:

Typically seven to fourteen calendar days to accept or counter.

Deposit Deadline:

Deposit due within three business days after LOI execution.

Due Diligence Period:

Commonly thirty days, extendable by agreement of the parties.

Definitive Agreement Deadline:

Set date when purchase agreement must be signed before closing.

Closing Window:

Targeted closing date and any drop-dead cutoff for the transaction.

Sequential milestones from LOI to closing

Sequential milestones help parties track LOI progression from offer to closing and coordinate dependencies effectively.

01

LOI Issued

Buyer delivers draft LOI with core terms for seller review.

02

Negotiation Period

Counteroffers and redlines exchanged until mutual agreement.

03

Signature and Deposit

Parties sign LOI and buyer provides agreed deposit.

04

Due Diligence & Closing

Inspections, title checks, financing and scheduling final closing.

Common mistakes to avoid when preparing an LOI

  • Stating detailed obligations in an LOI without clear 'non-binding' language can create unintended contractual commitments and increase litigation risk.
  • Using open-ended contingencies or undefined timelines leads to disputes over entitlement to deposit refunds or extension rights.
  • Allowing an unauthorized signer can render the LOI unenforceable or require ratification, delaying closing and adding expense.
  • Poorly describing assets or omitting exhibits creates ambiguity in scope and increases due diligence costs and delay.

Risks and negative consequences of an incorrect LOI

Unintended binding terms: May create enforceable obligations
Deposit disputes: Risk of forfeiture or litigation
Missed contingencies: Loss of withdrawal rights
Tax implications: Allocation affects tax reporting
Regulatory noncompliance: Permits or approvals delayed
Ineffective signatures: Improper signature format invalidates

How a Purchase LOI differs from a purchase agreement

A short comparison highlights the LOI's role in negotiation versus the purchase agreement's role as the final, enforceable contract.

Criteria Purchase LOI Purchase Agreement
Binding Status typically non-binding typically binding
Typical Use outline terms final contract
Signing Formalities rarely notarized may require notarization
Legal Remedies limited remedies full contractual remedies

eSignature vendor comparison for executing Purchase LOIs

The table compares core pricing and capabilities across common eSignature providers; signNow appears first for reference in vendor listings.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Bulk Send Yes (Premium plan) Varies by plan Varies by plan Varies by plan Varies by plan
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes (BAA required) Yes (BAA available) Yes (BAA available) No No
Envelope Cap No envelope cap 100 envelopes/user/year Varies by plan Varies by plan Varies by plan

Who signs and why their role matters

Buyer — Purchasing Officer

The buyer's authorized representative must have authority to commit funds and approve contingencies; lenders and internal finance should confirm the funding source before executing any deposit obligations.

Seller — Owner or Authorized Agent

The seller or its authorized agent must have authority to negotiate transfer terms and disclose material facts; if the seller is an entity, include officer title or resolution language confirming signing authority.

Real examples showing how LOIs are used in practice

Real-world examples show how Purchase Letters of Intent speed negotiation, document expectations, and protect parties before a final agreement.

Martin Properties — Tim Martin

Martin Properties used an LOI to summarize terms for a multi-unit purchase, aligning buyer and seller expectations early in the process.

  • LOI clarified escrow and closing timeline.
  • The LOI's clear contingencies allowed a thirty-day due diligence window, avoided misunderstandings about property inclusions, and expedited drafting of the final purchase and sale agreement, reducing closing delays and renegotiation costs.

Fertility Centers — John Butler

A healthcare practice used an LOI to record purchase price allocation and transitional services, enabling fast engagement with lenders.

  • LOI outlined tax and transition responsibilities.
  • By documenting responsibilities and timelines in the LOI the buyer secured interim funding faster, protected PHI transfer processes, and gave both sides a clear roadmap for the asset transfer.

Frequently asked questions about Purchase Letters of Intent

Common questions about LOI enforceability, electronic execution, amendment, revocation, and supporting documents with concise answers to guide practical next steps.


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