http://www.REIClub.com - What are Letters of Intent and How Do You Write One? A Quick Video Explaining What To Include In A Letter of Intent...
COMPONENTS 1) Your Personal Contact Info or Business Information at the top - Include From and To - names, phone, email. 2) Brief “Dear John” explaining your intent to buy - 2-3 sentences. 1 Paragraph tops. 3) Desired Purchase Price by Investor 4) Inspection Period / Due Diligence - 3-30 days, depends on condition of home, buying as-is? 5) Financing Period - All cash offer? Pre-Qualified? 6) Desired Cash Deposit/Earnest Money at execution of LOI and of Purchase Agreement - $10-$1000, or percent at closing 7) Purchase Agreement Deadline - Let them know you will draft this up based on the agreed terms and provide them with an exact date of when they need to sign by - usually 24-48 Hours. 8) Additional terms - Have seller fix the roof, replace the broken window, etc… If you’re buying as is, not necessary. 9) Broker and Closing Costs - You don’t want to hide any fees from the seller that might surprise them later. Are you having the seller cover the closing costs, or are you paying for all of it? Smart investors usually get the seller to cover the closing costs, especially if it’s an all cash offer. 10) Investor and Seller Signatures at bottom with Dates (Print Option).
Many homeowners will take an LOI very seriously, even though it is not legally binding, but that’s no reason to move slowly because all it takes is a sly Investor to come in after you “INFORM” the seller that it’s better for them to work with someone else that “Really Cares”.
Again, this is Frank Chen with REIClub.com. Please take the time to leave your comments for this video below and please subscribe to our YouTube channel so you’ll be automatically notified when we upload more quick video tips for you. Take care and good investing.
