What is letter of intent for?

I have never seen a letter of intent or know what it is used for. Is the letter of intent a must have when strinking offers to sellers in a wholesale transaction? I have to present the purchase agreement to the seller as well as the assignment agreement to the end buyer. Where does the letter of intent fit in if any?

Most of the time LOI’s are used for commercial real estate and very rarely used for residential properties.

It’s a letter stating that the buyer is intent to purchase the properties according to specific terms laid out in the LOI. It’s sort of a pre contract but it isn’t intended to be an actual offer it’s just to let the seller know that they are interested in the property and that they want certain terms.

Once the LOI is sent and the seller agrees to the terms, all terms are met laid out in the LOI and the buyers still wants the property then the actual contract to purchase the property is signed.

Thanks. Now I do have the purchase agreement and the assignment contract. I am waiting to hear back from a seller who has property to sell. For most people don’t know the business of wholesale, how do I present my purchase agreement to the seller and the assignment to the end buyer during the transactions? I know what papers to use in the deal. What I want to know is how to sit down and explain to these people what it is I do and my purpose for using the purchase agreement and assignment contract?