Letters of intent to sell a house are written to put forth the basic terms of a transaction between a buyer and a seller. While not legally binding, letters of intent are considered a solid basis for clarification when selling houses. Some information (legal terms and clauses) may be considered legally binding due to the manner in which they are written but the legal binding of these letters is dependent on how they are worded and the authority that endorses them.
It is prudent to write a letter of intent when selling a house as it serves as evidence that a verbal agreement has taken place between the parties and a written one will follow. These letters serve as deterrents in case either party wants to back out – they provide a sense of obligation to both parties so that a sale can be proceeded and there is little or no chance of conflict.
A letter of intent to sell a house does not guarantee that a buyer will buy it. However, it does put a potential buyer in a position where he cannot morally refuse the transaction. Some letters of intent are legally binding – legally binding letters of intent need to be written with the involvement of a lawyer – which means that neither buyer nor seller can back out but this is not usually the case.
To understand how a letter of intent is written, have a look at the following example:
December 19, 2014
Letter of Intent
This letter of intent outlines the terms and conditions under which 17 Golf Place, Cleveland, TN 77232, owner of which is Ms. Jessica Parker (Seller), is intended to be sold to Mr. Harris Dodger (Buyer), presently residing at 1022 Hallmark Avenue, Cleveland, TN 7933. The following summarizes the basic, non-binding terms of the imminent sale upon which the Buyer would be interested in entering a contract with the Seller.
Buyer will draft a contract for consideration by Seller within five (5) days of the signage of this letter of intent. Any terms and conditions will be reviewed by the Seller and altered by mutual consensus. The terms and conditions in this letter of intent are served as a proposed basis for preparation of a purchase agreement and are not legally binding.
Purchase Price: $400,000.00
Earnest Money: Buyer will make an initial deposit of $150,000.00 as earnest money which will apply to the purchase price of the said property. Subsequent addendums may be added for deposit of additional money and the entirety of the amount will be deposited at the closing of the deal.
Closing: The closing of the deal will occur within 40 days of the due diligence period.
Due Diligence Period: This contract is valid for 25 days after the execution of the contract so that the Buyer can conduct investigations regarding the property.
Contract: This letter of interest will expire if a formal contract is not mutually accepted within 90 days after its execution and will have no further force or effect.
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