Letter of Intent for Real Estate: Free Template + Generator

A Letter of Intent (LOI) is a written, mostly-non-binding document used early in a real estate negotiation to lay out the basic terms both parties are willing to negotiate around. It's NOT a contract to buy. It's a way to surface the deal points — price, timeline, contingencies — before everyone spends money on attorneys to draft a full purchase agreement.

When to use a Letter of Intent

Private real estate sales where the parties are still negotiating and want to make sure they're aligned on basic terms before committing to a binding contract.
Commercial real estate almost always uses LOIs before contract drafting (the contract is too expensive to draft for a deal that might fall apart on basic terms).
Family / friend sales where you want to document "this is what we're talking about" without immediately creating legal obligations.
Multi-party or syndicated purchases where everyone needs to align on terms before structuring the entity.

When NOT to use one

Hot residential markets with competing offers. Skip the LOI and go straight to a binding purchase agreement; the LOI step gives the seller time to entertain other offers.
Simple intra-family transfers where everyone already agrees on the basics. Just draft the actual deed and skip the negotiation stage.
When you want a binding deal NOW. An LOI is explicitly non-binding (with narrow exceptions). For binding intent, use a purchase agreement.

What's binding vs. non-binding in an LOI

This is the most important thing to understand about LOIs. Most of the document is non-binding — it states what the parties HOPE to agree on, not what they ARE agreed on. Either party can walk away from the negotiation at any time.

However, certain provisions are typically made binding on execution:

Confidentiality: the parties won't disclose the negotiation terms to outsiders.
No-shop: seller won't actively market to other buyers during the LOI window.
Expiration: the LOI itself expires by a date certain.
Governing law: which state's law governs disputes over the binding provisions.

Done right, the LOI says exactly which provisions are binding and which aren't. Done wrong, an LOI can accidentally create a binding contract that one party can sue to enforce. This is real legal risk; if there's serious money involved, have an attorney review the LOI before signing.

What goes in a Letter of Intent

The parties. Full legal names and addresses.
The property. Street address plus legal description (lot/block or metes-and-bounds).
The proposed price and currency.
Proposed earnest money amount and where it will be held.
Target closing date.
Material contingencies the buyer wants to include (financing, inspection, appraisal, title).
Due diligence period length.
Confidentiality and no-shop provisions (binding).
Expiration date of the LOI itself.
Non-binding disclaimer making clear what isn't enforceable.
Signatures of both parties.

Common mistakes

Forgetting to label it non-binding. Without explicit language, courts can sometimes find the LOI to be an enforceable contract. Always include the "non-binding except as stated" carve-out.
Including too much detail. An LOI should hit the major points. Save the granular contract clauses for the actual Purchase Agreement. An LOI that's 15 pages of detail starts to look like a contract.
Skipping the expiration date. Without one, the LOI can hang around forever and create confusion about whether parties are still in negotiation.
Treating it as a substitute for a purchase agreement. An LOI is the warm-up. The real contract is the Purchase Agreement.

Free Letter of Intent generator

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This generator produces a general-purpose Letter of Intent. State law varies on what makes an LOI binding vs. non-binding; an ambiguously-drafted LOI can accidentally create an enforceable contract. For transactions above a few hundred thousand dollars or where the parties have any reason to expect difficulty, have a real estate attorney review the LOI before signing. This is not legal advice.