LOI need help!!

General Real Estate Investing
1

I blasted about 50 LOI’s last week and got 1 back. This one is in a trust fund and when I ran the numbers on the property it was not a good deal. No big deal right? Well these realtors are trying to hold me to it and trying to make it seem like it’s a binding contract. I kept telling them how you are going to do that to me if there’s 1) no earnest deposit and 2) there’s no standard purchase agreement.

Is there anyway to back myself up from this? Honestly, I think it’s silly

The LOI is written out like this…

Letter of Intent to Purchase

  1. Parties: ________________________________ as Buyer

And PROPERTY OWNER_______________________ as Seller

  1. Property Address:

city of _______________________________ State of _____

  1. MLS Number:

  2. Purchase Price $ ________________________ CASH.

  3. Period: Closing on or before 30 days.

  4. Provisions: Property purchased in “As Is” condition. Buyer and Seller agree to pay normal closing costs. Earnest money to be deposited upon acceptance of Purchase Agreement. Acceptance to be provided within 48 hours.

Upon Acceptance of the above, both parties agree to move forward with a standard purchase and sales agreement generally accepted by the Board of Realtors.

Buyer: ____________________________________ Date: __________

Seller Acceptance: ____________________________ Date: _________

Seller Acceptance: ____________________________ Date: _________

Seller Declines: ______________________________ Date: _________

Seller Declines: ______________________________ Date: _________

2

Dude, I don’t read anything in here that gives you an “out”. I’m not an atty, but I don’t think I would use a blanket LOI without some contingencies built in.

Upon Acceptance of the above, both parties agree to move forward with a standard purchase and sales agreement generally accepted by the Board of Realtors.

That pretty much says it.

3

Um Seriously,

Friend, what you are sending out is (if you have signed it which I assume you did) a powerful document. You need to understand that 1)earnest money is a symbol to a buyer that you are serious about your offer, the lack of earnest money in no way makes a contract less binding and 2) I could literally write the words “I agree to buy your house at 100 oak way for $100” and, if we both sign it, It becomes a binding contract. If these people chose to, they could sue for specific performance and they might actually have a case. At the very least you would have to hire an attorney which could prove VERY costly.

I’m not quite sure who might have suggested this mailing to you but you basically just sent out 50 signed checks and waited to see who would cash them. I strongly suggest that you re-evaluate your mass mailing strategy. As a BARE minimum, I would include a contingency that stated “upon a satisfactory inspection and review of the property”.

Good Luck,
Biff