A letter of intent gives a preview of the terms and conditions of an upcoming sale before a contract is signed. It provides information that is useful to the state of the deal. It also helps highlight or outline potential areas that need to be addressed relatively soon. A letter of intent for your commercial real estate can serve as an integral part of your checklist before you sign a final contract for your prime real estate.
A letter of intent can be beneficial as it often highlights the terms and conditions of the contract. Some things you can include are:
- Parties of those involved
- Sale price, before and after concessions, closing costs and taxes
- Key terms like length of lease, lease renewal
- Expected closing or signing date for contract to ensure quoted costs/rates
- Clear indication that the letter of intent is non-binding, meaning no final decision has yet to be made
- Any additional information that needs to be addressed prior to signing a contract
A true letter of intent helps keep the commercial real estate purchase process moving forward. It shows goodwill from both parties involved.
The key advantage to a letter of intent is to hash out any big pieces of information before dealing with all of the legal information and requirements. It is also a reference point when it comes to finalizing a contract, in case there are any discrepancies.
Additionally, a letter of intent can help a buyer feel more comfortable with pursuing a property. It allows for due diligence in investigating and inspecting the property. Because a letter of intent takes less time to draft than an official contract, it can serve as an ideal starting point for commercial real estate purchases.
If you are in the market for commercial real estate property, contact us at the Menlo Group. We specialize in buyer representation and can help you with your letter of intent as well every other aspect of your purchase.