How to Write a Letter of Intent to Purchase Land

A letter of intent facilitates the negotiation of a property sale.

A letter of intent facilitates the negotiation of a property sale.

You've decided it's time to buy property, either to build on or hold as an investment. There are clear steps to follow, starting with making an offer for the land. You may write a letter of intent outlining your proposed terms. This creates a reference point from which you and the seller may negotiate. The letter is not legally binding until you come to an agreement and execute a formal contract. The seller may send back a revised letter of intent that reflects the terms of his counteroffer.

Identifying Information

The letter of intent should list all relevant identifying information for the property and the parties involved in the transaction. If more than one party owns the property, include all names and the contact information for each. List the property address, size and a description of any buildings included with the sale. List the name, address and phone number of the seller. If you are offering to purchase any fixtures attached to the buildings or personal property, list the details of each item in your letter.

Financial Terms

List the price you are offering for the property. If you are purchasing a rental property, you may need to add provisions discussing the handling of the existing tenants' rent. This often occurs when the sale takes place mid-month. You must pro rate the rent for that month to determine the amount the seller may collect for himself and the amount that now belongs to you after the sale. If the seller will be transferring any security deposits to you, list the details of these transfers in the letter of intent.

Response Time

Include a deadline for the recipient to respond to your offer. This prevents the other party from using your offer as leverage to increase the bids from other potential buyers. After the deadline, all parties to the letter are released from any obligation to complete the transaction. Either party may also withdraw its interest without incurring a legal obligation to the other at any time prior to the execution of the sales contract. Key dates for payments, completion of improvements and property delivery should also be explicitly laid out in the letter of intent.

Due Diligence

When choosing an expiration date for your letter of intent, be sure to leave enough time for all parties to complete the necessary inspections and due diligence on the property. This is especially important if you are purchasing rental property or an older building that has a lengthy repair history. You may need to examine tenant leases or look up past building permits and tax ledgers.


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Denise Sullivan has been writing professionally for more than five years after a long career in business. She has been published on Yahoo! Voices and other publications. Her areas of expertise are business, law, gaming, home renovations, gardening, sports and exercise.

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