Letter of intent
A non-binding letter outlining the main terms of a potential deal before the full contract gets drafted. More common in commercial and investment deals than residential.
Every term like this one lights up in the step you're on.
Free to set up. No credit card.Part 1 of 4
Why a seller cares
A letter of intent is a handshake on paper, not a contract. If an investor sends one for your home, nothing is agreed until the purchase agreement is signed, and either side can still walk.
Part 2 of 4
A simple example
A developer sends a letter of intent to buy your lot for $400,000, subject to a full agreement in 30 days. Nothing binds either of you yet.
| What the letter says | What it binds |
|---|---|
| Price and closing timeline | Nothing; these are the terms to be drafted |
| A confidentiality clause | Sometimes binding, if the letter says so |
| A signed purchase agreement follows | That is the contract, and the letter has done its job |
A letter of intent sets the table. The purchase agreement is the meal.
Part 3 of 4
What people get wrong
That a signed letter of intent means the home is sold. It is a plan to make a contract, and most say so in the first paragraph.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
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