As a real estate attorney and business template specialist with over 12 years of experience drafting and negotiating transactions across the United States, I’ve written hundreds of letters of intent (LOI) for buyers and sellers. A well-drafted letter of intent to sell property or real estate purchase letter of intent can save weeks of negotiation time and thousands in legal fees by aligning the parties before full contracts are prepared.
In this comprehensive guide, you’ll learn exactly what an LOI in real estate is, when to use one, key clauses to include, common mistakes to avoid, and—most importantly—you can download my battle-tested, attorney-reviewed real estate letter of intent template in both Word and PDF completely free.
Important Disclaimer: This article and the free template are for informational purposes only and do not constitute legal advice. Always consult a licensed real estate attorney in your state before signing any document. Laws vary by jurisdiction.
A Letter of Intent (LOI) in real estate—sometimes called a real estate letter of intent or LOI for real estate purchase—is a non-binding (or partially binding) document that outlines the basic terms under which a buyer intends to purchase and a seller intends to sell a property.
Think of the LOI as the “deal memo” that comes before the formal purchase and sale agreement (PSA). According to the Internal Revenue Service’s own guidance on real estate transactions (see IRS Publication 544), while an LOI itself rarely creates taxable events, getting the framework right early prevents costly misunderstandings later (IRS.gov Publication 544).
In my experience closing over 400 transactions, an LOI is most valuable in these situations:
For simple residential deals under $1M with standard state forms, many agents skip the LOI entirely and go straight to contract. But for anything complex, a simple letter of intent to purchase property is almost always worth the 30 minutes it takes to draft.
Most LOIs are intentionally non-binding except for specific sections such as:
Courts across the country (including landmark cases in New York, California, Texas, and Florida) consistently hold that vague or incomplete LOIs do not create enforceable contracts unless the parties explicitly say otherwise.
Here’s the exact structure I use in 2025 that has survived scrutiny from institutional buyers, REIT counsel, and high-net-worth individuals:
| Section | Purpose | Binding or Non-Binding? |
|---|---|---|
| Parties & Property Description | Identifies buyer, seller, and exact legal description | Non-binding |
| Purchase Price & Structure | Total price, earnest money, financing contingencies | Non-binding |
| Due Diligence Period | Typically 30-60 days for inspections and approvals | Partially binding |
| Exclusivity / No-Shop | Seller cannot market property during negotiation | Usually binding |
| Closing Date & Possession | Target closing and who gets post-closing possession | Non-binding |
| Representations & Warranties | Limited or none at LOI stage | Non-binding |
| Confidentiality | Protects sensitive financials and lease rolls | Binding |
| Governing Law | Critical for multi-state parties | Binding |
| Termination Rights | Either party can walk if no PSA executed by X date | Binding |
I’ve updated my template for 2025 to include the latest best practices for earnest money handling, environmental contingency language, and remote/online execution clauses.
Download Letter of Intent Real Estate Template – Microsoft Word (.docx)
Download Letter of Intent to Purchase Real Estate – PDF Version
Both versions are 100% free, no email required, and may be used for commercial or residential transactions nationwide.
Below is a real-world sample letter of intent to sell property using the template with typical terms for a $4.2M multifamily acquisition:
[Letterhead or Date]
November 19, 2025
XYZ Investments LLC
123 Main Street, Suite 500
Austin, TX 78701
Re: Letter of Intent – Purchase of 123 Oak Street Apartments, Dallas, Texas
Dear Mr. Smith:
This non-binding Letter of Intent (“LOI”) sets forth the basic terms under which XYZ Investments LLC or its assigns (“Buyer”) proposes to acquire from John Doe Properties LP (“Seller”) the improved real property commonly known as Oak Street Apartments located at 123 Oak Street, Dallas, Texas 75201 (the “Property”).
1. Purchase Price: Four Million Two Hundred Thousand Dollars ($4,200,000), all cash at closing.
2. Earnest Money: $100,000 within 3 business days of execution of a mutually acceptable Purchase and Sale Agreement, non-refundable after expiration of Due Diligence Period except for Seller default or failure of Buyer’s representations.
3. Due Diligence Period: Forty-five (45) days from the Effective Date...
(The full filled example continues in the downloadable template.)
Open the Word version and use Find/Replace:
Most customizations take under 10 minutes.
Q: Is an LOI the same as a purchase agreement?
A: No. The LOI is preliminary and mostly non-binding; the PSA is the enforceable contract.
Q: Can I write an LOI without a lawyer?
A: Yes for simple deals, but I always recommend attorney review before signing exclusivity.
Q: How long should an LOI be?
A: 2-4 pages is ideal. Longer than 6 pages and you’re writing the contract early.
A clear, professional letter of intent to sell property or letter of intent to purchase real estate demonstrates seriousness, protects both parties, and dramatically increases the chances of closing.
Download the free 2025-updated template above, customize it in minutes, and move your transaction forward with confidence.
Remember: This is not legal advice. Always have your final documents reviewed by a licensed real estate attorney in your state.
Wishing you a smooth and profitable closing!
– [Your Name], Esq.
Real Estate & Business Attorney
Former Chair, Commercial Real Estate Committee (State Bar)