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Agree price and contingencies before anyone drafts a purchase agreement. Build your real estate letter of intent in minutes with Document Genius's step-by-step questionnaire.
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A real estate letter of intent sets out the main terms on which a buyer expects to purchase a property, ahead of a formal purchase agreement. It identifies the property, the price, and the conditions still to be satisfied.
Commercial transactions use them heavily. Investment property, land, and larger deals often involve weeks of diligence, and neither side wants to pay for legal drafting before the headline terms are agreed.
The letter does not transfer property or commit either party to complete. What it does is align expectations on price, timing, and contingencies while there is still room to negotiate cheaply.
Residential buyers sometimes use one too, particularly for off-market purchases where no listing agreement or standard contract is driving the process.
Send a real estate letter of intent once the price conversation is specific and both sides want it recorded. Common situations include:
Where a standard purchase contract is already in play, going straight to that contract is usually faster. The letter helps most when the deal is complex, the diligence is expensive, or the parties are still some distance apart.
A real estate letter of intent should run one to two pages and be specific about the property and the timeline.
Name the buyer and seller, including any entity that will actually take title.
Identify it precisely: address, parcel or lot identifier, approximate size, and what is included or excluded.
State the offer price, any earnest money, when it is payable, and who holds it.
Say whether the purchase is cash or financed, and describe the financing you expect to arrange.
Give the buyer a defined window for inspections, surveys, environmental review, and document review.
List everything the deal depends on: satisfactory inspection, clear title, appraisal, zoning or permitting, and any approvals.
Give a date or a window, and say what would move it.
Add an expiry date and signature lines for both parties.
Everything that protects a buyer in a property transaction lives in the contingencies, and a letter that lists them vaguely is doing very little.
Be specific about the diligence window. Saying the buyer has a defined number of days from signing, and naming what may be inspected, gives both sides something to plan against.
Name the professionals you intend to engage. Inspections, surveys, environmental assessments, and title review all take time and cost money, and a seller reading the list understands why the timeline is what it is.
Say what happens if a contingency fails. Whether the buyer may withdraw, renegotiate, or recover a deposit is exactly the question that matters, and it should not be left implicit.
Tip: Property law, disclosure obligations, and how a document like this is treated all vary considerably by location. Have a local real estate attorney review the letter before you sign, and involve your agent early on what is customary where the property sits.
A real estate letter of intent takes about half an hour once you have the property details. Document Genius walks you through each section with simple questions.
Open with the date, both parties, and a precise description of the property.
Give the offer, the earnest money, and how the balance will be funded.
Define the period and what it covers.
Inspection, title, appraisal, financing, zoning, and approvals.
Give a target and note what could shift it.
Date it, sign it, and pass it to your attorney. Start yours now and have it ready today.
The status of this document matters more here than in most transactions, because property deals attract particular scrutiny.
Most are written to be non-binding on the purchase itself, with confidentiality, exclusivity, and expense allocation as the usual exceptions. Say explicitly which sections are intended to bind, because a letter that reads as an agreement can create obligations neither side planned for.
Watch the language throughout. Describing terms as agreed rather than proposed, or omitting a statement that a formal contract will govern, are the two most common ways these letters drift toward being read as contracts.
After signing, expect a full purchase and sale agreement, followed by the diligence period, then closing. The letter is the starting point for that drafting rather than a substitute for any of it.
How property transactions work, what must be disclosed, and whether a preliminary document can bind a party are all jurisdiction-specific and often fact-specific. Take advice from a local real estate attorney before signing anything.
Understanding how the other side reads your letter tends to improve it.
Certainty often beats price. A seller comparing two approaches will frequently take the lower offer from a cash buyer with a short diligence window over a higher one loaded with contingencies, because the second may never complete.
Timing matters more than buyers expect. Sellers with a deadline of their own, whether a purchase they are chasing or a loan falling due, will weight a workable closing date heavily.
Evidence of funding carries real weight. Naming your lender, attaching proof of funds, or showing that approval is already underway makes an offer materially more credible at no cost to you.
Long exclusivity is a cost to the seller. Asking for a shorter window, or offering to shorten it once diligence clears, is often what makes the difference in a competitive situation.
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