Updated August 02, 2023
A residential purchase letter of intent is written by a prospective buyer to formally express their interest in purchasing real estate. The letter is commonly non-binding that sellers will require before efforts are made to draft a legally-binding purchase agreement.
Many of the terms found in a purchase agreement will be contained in the letter of intent; however, it will be outlined in a consolidated format to include those that are most pertinent to the sale of the property.
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What is a Residential Purchase Agreement?
A residential purchase agreement outlines the terms and conditions regarding the sale of residential property. The document begins as the buyer’s written offer to purchase the seller’s home. The seller will have a limited amount of time to evaluate the offer and decide whether they wish to accept the proposal or respond with a counter-offer.
After the parties reach an agreement, they will sign the document to create a legally binding contract that can only be terminated under specific provisions in the agreement or upon a mutual decision to cancel.
Residential Purchase Agreement
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Sample – Residential Purchase LOI
RESIDENTIAL PURCHASE LETTER OF INTENT
Effective Date: December 1, 2019
RE: Intent to Purchase Residential Property
This residential purchase letter of intent (the “Letter of Intent”) represents the basic terms for an agreement between the Buyer and Seller. After this Letter of Intent has been made, a formal agreement may be constructed to the benefit of the Parties involved.
I. The Buyer: Alisha Baynes (the “Buyer”).
II. The Seller: Dominique Rochon (the “Seller”).
III. Property Address: 44 Lancaster St., Sacremento, California 94203 (the “Property”).
IV. Purchase Price: The Buyer shall purchase the Property for Four Hundred Twenty-Five Thousand Dollars ($425,000) (the “Purchase Price”).
V. Purchase Terms: Payment of the Purchase Price shall be made in the following manner: Cash payment (no loan or financing is required). The full Purchase Price shall be paid within 30 days of signing a Purchase Agreement.
VI. Bank Financing: The Buyer has made it known that their ability to purchase the Property is not conditional on their ability to obtain financing.
VII. Closing: The Closing shall occur on March 1, 2020, or earlier by mutual agreement (the “Closing”). Any extension to the Closing must be agreed upon in writing by the Buyer and Seller.
VIII. Closing Costs: All costs associated with the Closing shall be the responsibility of both Parties bearing their own expenses.
IX. Possession: Possession of the Property shall be given on March 10, 2020, or earlier by mutual agreement (the “Possession”). Any extension to the Possession must be agreed upon in writing by the Buyer and Seller.
X. Property Inspection: After a binding Purchase Agreement has been made, the Buyer shall hold the right to have the condition of the Property inspected by a person of their choosing. The inspection shall occur no later than 10 days after a Purchase Agreement has been made.
After the Property has been inspected, the Buyer shall have an additional 3 days to report any new disclosures to the Seller in writing. If the Buyer and Seller cannot reach a mutual agreement within 3 days after delivery of the written disclosures, the Purchase Agreement shall be terminated with any earnest money being returned to the Buyer.
XI. Binding Effect: This Letter of Intent shall be considered non-binding. Therefore, the Parties acknowledge that this Letter of Intent is not enforceable by any Party. The terms outlined herein are solely for the purposes of reaching an agreement in the future, of which the Buyer and Seller are not bound.
XII. Standstill Agreement: Following the execution of this Letter of Intent, and until the Closing, the Seller shall not engage in negotiations for the sale of the Property with any other party unless either the Buyer and Seller agree in writing to terminate this Letter of Intent, or the Buyer and Seller fail to sign a Purchase Agreement by January 1, 2020.
XIII. Additional Provisions: Seller shall pay for the demolishion of the carport adjacent to the property.
XIV. Currency: All mentions of currency or the usage of the “$” icon shall be known as referring to the US Dollar.
XV. Governing Law: This Letter of Intent shall be governed under the laws of the State of California.
XVI. Acceptance: If you are agreeable to the aforementioned terms, please sign and return a duplicate copy of this Letter of Intent by no later than January 10, 2019.
BUYER
Buyer’s Signature ______________________ Date ______________________
Print Name ______________________
SELLER
Seller’s Signature ______________________ Date ______________________
Print Name ______________________