Are you diving into the world of property investing and keeping hear the term "LOI" thrown around? In this quick breakdown video, the Dallas-Fincham Team answers a critical question for buyers and investors: What is an LOI, and what is the purpose of it?
Are you diving into the world of property investing and keeping hear the term "LOI" thrown around? In this quick breakdown video, the Dallas-Fincham Team answers a critical question for buyers and investors: What is an LOI, and what is the purpose of it?
Short for Letter of Intent, an LOI is a foundational document primarily utilized in commercial real estate transactions—though you will occasionally see it pop up in residential real estate as well. Think of it as a formal way of saying, "I plan to buy this property, and here are the terms I'm proposing."
But before you rely on one to lock down your next deal, there is a massive catch you need to know. While an LOI is a fantastic tool for initiating contract negotiations and kickstarting your due diligence process, it does not legally hold either party to the terms. To truly secure a property, you need an official, executed agreement of sale. Because an LOI isn't legally binding, anyone can back out of the deal at any point before the final contract is signed.
Watch the full video above to make sure you're protecting your investments!
