A letter of intent (LOI) is a non-binding outline of price, terms, and timing agreed before the purchase agreement is drafted.
An LOI helps both sides confirm they agree on key economics before spending money on attorneys and due diligence. It usually covers price, deposit, length of due diligence, closing timeline, and financing. Most provisions are non-binding, although confidentiality and exclusivity clauses can be binding. A careful LOI also states what the buyer expects from the seller, such as leases and estoppels, which reduces surprises when the purchase agreement is written.