Write a Letter of Intent That Reads Like It Came From a Lawyer

How to Write a Letter of Intent

A letter of intent (LOI) is the document that turns a handshake into something the other side — and their lawyer — can act on. It says, in writing, "here is what I propose, here are the terms, and here is what I expect next." A good LOI is short, specific, and structured so the recipient can see the whole deal in under a minute. This guide walks through the structure using a real worked example: a café owner offering to buy the commercial building she's been leasing, laid out with a formal serif letterhead, an RE matter line, and a boxed key-terms table.

Open With a Clear RE Line and a Statement of Purpose

Before the salutation, head the letter with an "RE:" line that names the matter — the property, business, or position — and a reference number if one exists. The first paragraph should then say plainly what the letter is: a statement of the principal terms on which you propose to proceed, intended to guide a formal agreement. Don't bury the lede. The recipient should know what you want from the first sentence.

Lay Out the Material Terms in a Table

The single most useful thing you can do in an LOI is pull the deal terms out of the prose and into a clean table. For a purchase, that means:

• Purchase price — the headline number
• Earnest money — the deposit and when it goes into escrow
• Financing — how you'll pay, and any pre-approval you can show
• Due-diligence period — how long you need to inspect
• Target closing — the date you aim to close by
• Conveyance — as-is, free of tenancies, with clear title

A reader who sees these six lines knows the entire shape of your offer. Everything in the body of the letter then simply explains and conditions what the table already states.

Make Clear What Is — and Isn't — Binding

This is the clause that separates a careful LOI from a dangerous one. State explicitly that the letter is a statement of intent and is not binding except as to specific provisions — typically an agreement to negotiate in good faith and to keep the terms confidential. Many buyers also ask for an exclusivity window, a short period during which the seller won't market the asset to others while the contract is drafted. Spell out the date that window closes.

Close by Asking for a Countersignature

End by inviting the recipient to countersign and return a copy, and tell them what happens next — for instance, that your attorney will circulate a draft purchase agreement within five business days. Give a direct phone number and email. The sign-off should carry your name, title, and business so there's no ambiguity about who is making the offer.

Common LOI Mistakes to Avoid

Don't make the whole letter binding by accident — vague language like "we agree to buy" can create obligations you didn't intend. Don't leave the closing date or due-diligence period open-ended. And don't skip the confidentiality clause, especially in a business acquisition where the other side is sharing financials. Above all, because enforceability turns on exact wording and your jurisdiction, treat this as a polished starting draft and have a real estate or business letter of intent reviewed for your specific situation.

Once both sides have signed and the deal moves forward, you may need to formally authorize someone to act for you in collecting documents or closing — an authorization letter handles exactly that.