Letters Of Intent
Do many people use LOI before they go into writing up a formal contract?
A RE agent told me she got lots of those from investors simply didn't want to waste time unless there is a "tentative" agreement based on a LOI.
Example here:
http://www.oceanwaverealty.com/Real%20Estate%20Forms/ftlaud/Letter-...
Replies to This Discussion
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Permalink Reply by Joseph Alfe on
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An LOI is commonly used in commercial transactions. Anyone using it for residential short sales is an amateur.
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Permalink Reply by Jeff Payne on
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+1 Joseph Alfe
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Permalink Reply by Jack Hampson on
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The few agents I spoke to said they get it from all cash investors all the time.
They all come with proof of fund and most times it's investors from out of town, making a cash offer on a property they never even saw, they write up a LOI with proof of funds and many of them commit in the LOI with at least a 50% deposit and if the listing agent think there is a chance then their instructions would be for the listing agent to write up a contract for them (thus giving them full commission). Some of them have a side letter indicating should they get the property they would hire the agent to do the rental and property management.
Almost all of these are short sale or REO homes.
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Permalink Reply by Diego Marin on
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Ha! No need for "name-calling"... In fact, I happen to be working with a law firm that handles probates... and many of these are short sales as well. While it's not exactly a LOI that we use it is a "Highest/Best" form with a deadline date. Basically the same way many REOs are done. Works great for us, creates multiple offers for the Admin of the Estate to choose from.
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right...for probate. Send one to a lender and see what happens.
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