What is an L.O.I.?

What is an LOI?As real estate agents and brokers, we might tend to used acronyms freely and may forget that many folks out there just don't speak our same language.  I recently was assisting a commercial client and asked him if he was ready to submit an LOI.  I just assumed that he knew what this was. Thankfully he honestly asked me what an LOI was?  Had he not asked me I to clarify this, we most likely would have been on separate pages for sure.  This certainly gave me pause for thought. I came to the conclusion that I need to make sure that when I am using acronyms in my business that I really do need to make sure that I am clarifying what they are to my clients.  I have no desire to cause any client to feel inadequate if they don't know what I am talking about.  This was a great lesson to me personally. So what is an L.O.I.?  Simply put it is an offer for a commercial transaction put into a letter form called a Letter of Intent or a Letter of Interest.  This letter is drafted with the bones of an offer within the letter and is presented to the other party.  The letter is to show "intent" to purchase or lease a particular property with all of the major parts of a negotiation clearly written. Once the L.O.I. is submitted the other party will commence with a negotiation.  After all points have been negotiated and agreed upon, at that time a formal contract is then written up.  The letter of intent is where the basis of most of the negotiating takes place. An L.O.I. however is NOT a binding contract!  It is important for all parties to have proper representation throughout any real estate negotiation.  And, if you aren't sure about something - ask! We use a lot of lingo in our real estate world.  Make sure that you are letting your clients know what you mean when you speak in terms of acronyms.  When we insure that our clients are on the same page with us in all communications, things will progress a lot more smoothly!        "Have you fully lived today?" Paula L. McDonald ~ REALTOR® Broker ~ The Woodlands, Texas 936-203-0279 Direct Selling The Woodlands real estate and surrounding areas! Paula@ChevauxGroup.com                    Copyright 2015 Paula McDonald