Why a letter of intent versus an offer?
I got a letter of intent offering a bit low on a property and asking 90- days investigation and then will close 30 days after that, with a clause indicating they will get back their earnest money at their discretion if they decide it's not right for them.

At the bottom it says that it's not legally binding in any way.

My real estate agent, in a dual agency state, said it's just so that they can avoid using a lawyer. I'm trying not to be suspicious but I feel like my agent/broker has been pushing me to accept offers that go nowhere.

I know that there's plenty of reasons why sales fall through, but they also just told me that the previous buyer(Different party) who had asked for an extension backed out. We signed the agreement to extend it, but no one told us about him backing out or mentioned him paying out or getting his earnest money returned.

I also have no idea who I'd contact in the event of unfair business practices.

&amp;#x200B;

Edit: Thank you for your input. Not having a lot of experience in commercial real estate and being far from the area where the property is puts me at a disadvantage. 
[{"id": "g0q1ja8", "text": "It\u2019s just better way of saying I\u2019m very serious about this, but you are correct not legally binding", "replies": [{"id": "g0qejmq", "text": "Actually, if you incur costs or damages based on the LOI you absolutely do have legal recourse.   Hoffman v. Red Owl\n   Detrimental reliance.", "replies": [{"id": "g0qihxh", "text": "Interesting, can you tell us what happened?", "replies": [{"id": "g0qjle6", "text": "No contract, family relied on a super market's word that if they sold the bakery and did this and that, and bought a grocery store to get experience that they would franchise a Red Owl location to them.  They did all that, then went to negotiate the price and it was double what they got a verbal on.  They sued for losses based on detrimental reliance of their promises.    \n\nhttps://www.casebriefs.com/blog/law/contracts/contracts-keyed-to-farnsworth/the-bargaining-process/hoffman-v-red-owl-stores/  \n&gt;Synopsis of Rule of Law. Promises that a party can reasonably expect will be relied upon, are relied upon may be enforced to prevent injustice even if the promise itself would not be sufficiently definite to meet the requirements to form an offer for a binding contract.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "g0q2r49", "text": "A Letter of Intent (LOI) is often used to propose a transaction by a buyer without going through the whole rigamarole of writing a formal offer. It is not legally binding, but it is a good way of indicating a serious interest prior to submitting a formal offer. Right now in my state a formal offer is at minimum a 14 page document and it usually has several addenda. Better to work out the details using LOI and then write a formal offer when both parties have a pretty good idea they like the terms. Using an LOI to go back and forth prior to a formal offer is a common practice, and useful to both sides.", "replies": [{"id": "g0q35e9", "text": "This", "replies": [], "depth": 2}, {"id": "g0q4u9k", "text": "What I've read about them is that it frequently is followed by a lower offer.", "replies": [{"id": "g0q5917", "text": "Which you are under no obligation to entertain and are free to market to any other willing buyers.", "replies": [], "depth": 3}, {"id": "g0qeaq7", "text": "How often do people negotiate against themselves? In residential, sometimes. Not often in commercial", "replies": [], "depth": 3}, {"id": "g0qvqk2", "text": "i work in commercial and use LOI\u2019s 95% of the time", "replies": [], "depth": 3}, {"id": "g0qwgni", "text": "That's not accurate.\n\nAn offer has a ton of details, lots of pages, attorneys are going to write/review/modify them.  \n\nA letter of intent is a page (maybe up to 2) that says here are the basic deal points - does that work for you?  If not, let's not waste each other's time.  If so, then we'll go through drawing up a contract, paying our lawyers to argue over the finer points, etc.  If the LOI works for you, we'll both work quickly to get the actual contract done and signed, and in the meantime you're going to work with us and hold off negotiating with other buyers.  \n\nAn LOI is not usually binding (biggest exception is that seller isn't supposed to take another offer while the parties to the LOI are working on getting a contract), but the terms of the LOI should be the same in the contract.  Something could come up during due diligence that affects the price, but not typically at this stage.", "replies": [], "depth": 3}, {"id": "g0sby1o", "text": "LOI are extremely common and are the basis of a purchase and sale agreement    When making an offer on the property I submit an LOI with the main deal terms.  This is then the outline my attorneys follow to draft the PSA.  \n\nA couple things also, 90 days inspection  and 30 close is long 30&amp;30 is more common. Escrow money is fully refundable throw inspection period.", "replies": [], "depth": 3}, {"id": "g0vdj54", "text": "Why would someone draft a full contract if you weren\u2019t going to even consider the terms?", "replies": [{"id": "g0wr26s", "text": "I've done plenty of residential real estate, not commercial. In residential, and the other commercial lots, the buyers contacted the agent, made an offer, we signed it and then the property was under contract. I'm not as familiar with commercial as with residential, so this is the first LOI I've seen.", "replies": [{"id": "g0wrozu", "text": "The commercial deals we do require LOI simply because they can become very complex. Through my lense they are vital to a first round of negotiations. \n\nWe operate in California/Nevada/Utah/Arizona.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "g0qebi5", "text": "It's also a good way of indicating nothing much.", "replies": [], "depth": 2}, {"id": "g0rdgpm", "text": "This, 100%. \n\nThe LOI is for negotiating the material deal points. Once that\u2019s done, let the attorneys handle the fine print and draw up the formal contract.", "replies": [], "depth": 2}], "depth": 1}, {"id": "g0q5clu", "text": "I will go to your realtor. Please submit an offer with deposit. No time for an intend...if buts....\n\nThey will come back asking for a discount because of this and that execuses.", "replies": [{"id": "g0qdhd4", "text": "What the fuck? MODS START DELETING FUCKING SHIT LIKE THIS JESUS CHRIST!!!!!!!", "replies": [{"id": "g0qfasq", "text": "What mods lol?  This sub is full of Marcus &amp; Millichap sleezebags and people with close to zero experience.", "replies": [], "depth": 3}, {"id": "g0quv0y", "text": "It says he\u2019s from Silicon Valley lol. I think he\u2019s parodying a tech bro investor and doing a great job.  He\u2019s got it down to a T: just pull stuff out your ass but say it like you mean it.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "g0q5yhj", "text": "What are you selling? LOI's are very typical in my experience, it's simply to state the terms they wish to agree on high level and pursue an actual written contract which works out the details. \"soft\" earnest money is also typical during DD but it usually goes non-refundable after DD is waived.", "replies": [{"id": "g0q7rg8", "text": "A piece of property, and they're offering a bit low, and they want 90 days to do research and then 30 to close. They also want the discretion to get earnest money back if they decide it's not suitable for any reason.", "replies": [{"id": "g0q7wy2", "text": "Right, that all sounds pretty standard to me in commercial. 90 is a little long but it depends on the type of asset you\u2019re selling, what is the piece of property, a large office building, a small apartment complex, etc?", "replies": [{"id": "g0qdekn", "text": "Eh right now during COVID I'd say 90 day DD is okay. It's taking everyone about 2x longer than normal to get their jobs done and 60 days is usually \"standard\". If its land for a development, than standard is typically 180-270 with 60 to close.", "replies": [{"id": "g0qdq99", "text": "Depends on the market. Denver and Phoenix are pre-Covid pricing and terms from what I\u2019ve seen.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "g0qd4fz", "text": "Dude. This is all standard language and standard practice. A letter of intent is 1000000000% standard. Why are you surprised? \n\n90 day DD with 30 to close is standard across the board. And if the buyer finds anything wrong with the property and wants to back out of the transaction, why would they allow you to keep the earnest money? \n\nI don't understand your rationale. You have zero experience and a shitty broker. Is this a piece of land or is there a building on the property? Why are you getting so caught up in the minute details? Is there something wrong that you know about that you're worried they'll find?", "replies": [{"id": "g0r95vv", "text": "Agree with this although regarding due diligence it really depends on the property...a property leased long term NNN to credit tenant you could see 15-30 day DD standard, an owner user deal with an SBA loan  45 days, large multi tenant office deal 60 days to get estopples and such, 90 if environmental issues are suspected, 180 if development entitlements are at issue, and even longer for complex sites involving EIRs or when there are known title issues. Number one thing is to get broker experienced with the specific property type and market", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "g0q9pmk", "text": "As others said, LOIs are common in the industry, especially in some jurisdictions that have statutory offers that can be too complex. 90 days for due diligence + 30 days for closing is pretty standard, too. If/when they are satisfied or waive the due diligence clause, then you should move to a binding offer with a non-refundable deposit.", "replies": [], "depth": 1}, {"id": "g0qaqsf", "text": "I want what you\u2019re selling but I don\u2019t love your list price and I want certain terms. I can write up a one page LOI from a template to see if you\u2019ll bite on my offer, before I pay my attorney a couple grand to write up a formal offer. Simple as that.", "replies": [], "depth": 1}, {"id": "g0qbfrm", "text": "My understanding of an LOI (letter of intent) is the first step in making an offer.  At the LOI stage, you don't really require an attorney (though we've had attorney's involved in this step in crafting the deal and even delivering the LOI itself).  The LOI is about making an offer and negotiating the deal details with the other party to come to terms.  Once agreed to the terms, the final LOI is used to draft the PSA (purchase of sale) and move the offer forward.", "replies": [], "depth": 1}, {"id": "g0qdlwk", "text": "LOI and offers are the same thing. LOI is just writing. Neither are legally binding they just show intent. \n\n90 days is a crazy long time for due diligence. 30 to close is typical. What kind of property?\n\nTime kills deals", "replies": [], "depth": 1}, {"id": "g0qls2p", "text": "Letter of intents are used so people don't need to spend thousands of dollars on legal fees in advance. An effort (usually sincere) to negotiate the high level terms. It's customary, not shady. Though not usually legally binding, if either party goes back on their word \"just cause that wasn't legal\" then there is a serious loss of reputation with the owner of that property- the damages aren't technically concrete, but they're real from a negotiating perspective.\nEdit, words", "replies": [], "depth": 1}, {"id": "g0qmbud", "text": "An LOI is a framework for working out terms that are acceptable to both sides, but is not (usually) legally binding on both sides. A legally binding contract is then created based on those terms.\n\nIt is used instead of an \"offer\" because:\n\n1) An offer CAN be legally binding, and then it gives the other party 100% power to accept or reject it without further input from the party making the offer. Most people making an offer prefer a chance to review all terms one more time prior to making it binding.\n\n2) An LOI can be modified several times, back and forth, until terms are agreeable, before getting expensive attorneys involved. It just lays out the basic business terms, to which more detailed legal language and protections can be added prior to becoming legally binding.", "replies": [], "depth": 1}, {"id": "g0qs9jn", "text": "An LOI is the equivalent to asking you out. \n\nIf you say yes then a contract makes it formal.", "replies": [{"id": "g0qt0wd", "text": "haha", "replies": [], "depth": 2}], "depth": 1}]