Letter of intent to purchase
I was wondering if anyone has experience with these? I have the basic stuff, identifying the parties and the property, saying escrow period will be determined after seeking financing, a pretty solid non-binding clause, etc. I was wondering if anyone else uses the LOI to define terms like "to the best of seller's knowledge" or request detailed financials?
[{"id": "cox0cxb", "text": "We don't define \"to the best of the owner's knowledge\" but it is used in our reps and warranties section.  We also ask for all leases, property records, documents, plans, surveys and environmental reports that affect the property.  We stipulate that the info must be delivered within 5 days of the acceptance of the offer.  If someone is trying to sell their property, they shouldn't be dragging their feet on giving you financials.", "replies": [], "depth": 1}, {"id": "cox57hr", "text": "Keep in mind these things are not legally binding. Just make yours clear enough that both parties are on the same page about key terms. ", "replies": [{"id": "cozlq0o", "text": "^ This, think of them as a \"toothless tiger\". \n\nLOIs are meaningful and meaningless at the same time. Make it as detailed as you feel comfortable with, but not to the point of scaring the other party away. ", "replies": [], "depth": 2}], "depth": 1}, {"id": "coxjs90", "text": "I'm new to this, are there no buyers agents in commercial real estate?", "replies": [{"id": "coxks2v", "text": "Their can be (usually have to sign a exclusivity agreement), often enough though buyers simply represent themselves.\n", "replies": [], "depth": 2}], "depth": 1}, {"id": "coxkpra", "text": "how i sort my LOIs\n-property\n-purchaser\n-purchase price\n-valid time period for sales contract draft and agreement\n- Inspection period (documents, inspections, etc...)\n- closing period\n- 1031 clause \n- date at which LOI terms become null.\n- purchaser and seller (or their respective agents) signatures", "replies": [{"id": "coxqrkz", "text": "Everything above plus I add a section for Earnest Money, Confidentiality and Broker Commission.  ", "replies": [], "depth": 2}], "depth": 1}, {"id": "cozyg6j", "text": "I am a buyer too, looking for CRE.  A friend of mine is representing me for a $1.5M purchase.  I can see he has very little CRE experience because when I ask basic questions, it seems like he has little or no experience.  We plan on buying a Denny's.  Am I getting myself in trouble for not hiring a professional CRE agent?", "replies": [], "depth": 1}, {"id": "cp0vkxc", "text": "This letter sets forth the general terms and conditions upon which xxx Capital Corporation  offers to purchase from Seller (\u201cSeller\u201d), the Property  known as xxxxxxx located at xxx xxxxxx GA consisting of 200 units.  \n\nWithin Seven (7) days of the date this letter is fully executed, the parties shall enter into a Purchase and Sale Agreement (the \u201cPurchase Agreement\u201d) which will be subject to review and approval of Buyer and Seller\u2019s respective legal counsel and shall include the following material points:\n\n1.\tOpening of Escrow.  Within three (3) business days after the full execution of the Purchase Agreement the parties shall open an escrow (the \u201cEscrow\u201d) for the consummation of said purchase and sale transaction with the xxxxx office of First American Title Insurance Company (the \u201cEscrow Company\u201d).\n\n2.\tPurchase Price.  The purchase price (the \u201cPurchase Price\u201d) shall be Twelve Million Four Hundred Thousand Dollars ($12,400,000).\n\n\n3.\tBuyer\u2019s Deposit.  Upon the opening of Escrow, Buyer shall deposit into Escrow the sum of $100,000 (the \u201cDeposit\u201d) which shall be applicable toward the Down Payment and Purchase Price.  The Deposit will be placed in an interest bearing account for the benefit of Buyer and will remain refundable to Buyer until Buyer has delivered notice of its approval of the condition of the Property and approval of the feasibility matters set forth below.  At any time prior to the elapsing of the Feasibility Period Buyer can, in its sole and absolute discretion, cancel Escrow and receive back Buyer\u2019s Deposit. Upon notice of the approval of the  condition of the Property, deposit shall be non-refundable to the buyer, with the exception of the Financing Contingency. \n\n\n\n4.\tFeasibility Period.  Buyer shall have Forty Five Days (45)  to review  in Buyer\u2019s sole and absolute discretion, the condition and suitability of the Property for Buyer\u2019s intended use, including but not limited to development costs, financial and market feasibility, condition of title, and the physical condition of the Property.  Provided Buyer has not expressly exercised its cancellation rights, upon completion of the Feasibility Period, Buyer shall instruct Escrow to release the Deposit to Seller and thereafter the Deposit shall be non-refundable except in the event of default by Seller or failure of a condition which is for the benefit of Buyer.\n\n5.\tDue Diligence Materials.  Within three (3) days of the full execution of this letter, Seller shall deliver to Buyer copies of all tests, surveys, studies, maps, plans, financial records and permits related to the Property and available to Seller which have not already been delivered to Buyer.  As soon as reasonably possible, Seller shall cause Escrow to provide Buyer with a preliminary title report to the Property and copies of all documentation listed as exceptions in said title report\n\n6.\tAccess to Property.  From and after the date this letter is accepted by Seller through the Closing, or until cancellation if Buyer cancels prior to the expiration of the Feasibility Period, Buyer, its agents, employees and contractors shall have the right to enter the Property for the purposes of conducting such investigations, inspections and tests of the Property as Buyer deems necessary in order to determine the condition and suitability of the Property.  Buyer shall indemnify and hold Seller harmless from and against any and all loss, expense, claim, damage and injury to person or property resulting from the negligent acts of Buyer, its employees, consultants, engineers, authorized agents and contractors on the Property in connection with the performance of any investigation of the Property as contemplated herein; provided that Buyer shall have no responsibility or liability for any act or omission of Seller or Seller\u2019s agents, employees or contractors and/or for any adverse condition or defect on or affecting the Property not caused by Buyer or its employees, agents, contractors, or subcontractors.  If Buyer cancels Escrow on or before the end of the Feasibility Period or defaults in the closing, Buyer shall return all tests, surveys, studies, maps, plans, records, and permits related to the Property which Buyer has previously thereto received from Seller as well as all studies, reports and feasibility data collected by Buyer with regards to the Property. \n\n7.\tClose of Escrow.  The close of Escrow (the \u201cClosing\u201d) shall on a mutually acceptable date but no later than three weeks after the end of the Feasibility Period.\n\n8.\tCost and Fees.  Documentary transfer taxes, a policy of title insurance, recording fees and one half of Escrow charges shall be paid by Seller.  Buyer shall pay one half of Escrow charges.  The foregoing notwithstanding, if either party defaults after the lapsing of the Feasibility Period then the party in default shall pay all Escrow fees.\n\n9.\tBrokers Fee : xxxxxx  shall pay xxxxx of xxxxx  of Companies a fee per a separate agreement. Both Buyer and Seller agree that there are no other Brokers involved in this transaction.\n\n\n\nIf the terms of this letter are acceptable to Seller, Seller should execute and deliver to Buyer by fax a counterpart copy of this letter where indicated.  .  Copies of this letter, which are signed and transmitted by via-email, shall have the same effect as originally executed copies.\n\nExecuted \n", "replies": [{"id": "cp13fo0", "text": "Thank you!!", "replies": [], "depth": 2}], "depth": 1}]