CRE

Letters of Intent (LOI): Structure, Terms & Templates

By Khai Tran · January 26, 2026 · 5 min read

A clear, well-structured LOI can move a CRE deal forward or quietly kill it before it starts. This guide breaks down how to structure, negotiate, and present LOIs with confidence so you protect leverage and look professional to investors and principals.

Why the LOI Matters More Than Most Agents Think

In commercial real estate, the LOI is where deals are won or lost quietly.

Before attorneys get involved and before money is spent on diligence, the LOI sets expectations, use, and tone. A sloppy or vague LOI signals inexperience. A tight one builds confidence with sellers, buyers, and investors.

I’ve seen strong deals die not because the numbers were wrong, but because the LOI created confusion, fear, or mistrust.

Let’s fix that.

What a CRE Letter of Intent (LOI) Actually Is

A Letter of Intent is a non-binding document that outlines the major business terms of a proposed commercial real estate transaction.

Think of it as:

A business agreement before the legal agreement
A negotiation framework
A filter to see if both sides aligned before going deeper

According to NAR Commercial data, most CRE transactions that fail do so during early negotiation phases, often before a PSA executed, due to misaligned expectations on price, timing, or terms.

That’s exactly what a good LOI designed to prevent.

Core Sections Every CRE LOI Should Include

1. Purchase Price & Deal Structure

Be specific and clean.

Purchase price
Asset type
Address or legal description
All-cash vs. financing contingency

Coach’s tip: Avoid “TBD” language here. Uncertainty early weakens use.

2. Earnest Money Deposit (EMD)

Clarify:

Amount
When it goes hard
Who holds it (escrow/title)

Example:

Buyer to deposit $250,000 in earnest money within 3 business days of PSA execution; hard upon expiration of due diligence.

3. Due Diligence Period

This is one of the most negotiated sections.

Include:

Length (e.g., 30, 45 days)
Access rights
Extension options (if any)

Field-tested insight: Shorter DD with clear access rights often beats longer DD with vague language.

4. Closing Timeline

Outline:

Target closing date
Flexibility for lender delays
Conditions tied to DD or financing

This reassures sellers you can execute.

5. Financing Terms (If Applicable)

If the buyer is financing, state:

Loan type (agency, bank, bridge)
LTV range
Financing contingency length

Even sellers who prefer cash want transparency here.

6. Prorations & Closing Costs

Clarify who pays for:

Title
Escrow
Transfer taxes
Survey

Small details prevent big friction later.

7. Confidentiality & Exclusivity

Optional but powerful.

Confidentiality clause
No-shop or exclusivity period

These terms signal seriousness without being aggressive.

8. Non-Binding Language

This protects everyone.

Include clear language stating:

LOI is non-binding
Only PSA is binding
Exceptions (confidentiality, exclusivity)

Never skip this.

CRE LOI Template (Simplified)

Letters of Intent (LOI) , Commercial Real Estate

Buyer: Seller: Property:

Purchase Price: $________ Deposit: $________ Due Diligence: ___ days from PSA execution Closing: On or before __________ Financing: ☐ Cash ☐ Financing (details) Prorations & Costs: __________

This LOI is non-binding and intended solely as a framework for negotiation. No party shall be bound unless and until a formal Purchase and Sale Agreement executed.

Common LOI Mistakes Agents Make

Overlawyering Too Early

LOIs should be clear, not complex.

Being Vague to “Stay Flexible”

Vagueness creates fear, not flexibility.

Forgetting the Seller’s Perspective

A strong LOI answers:

“Can you close, and will this be smooth?”

How I Coach Agents to Present an LOI Confidently

Here’s the exact script I’ve used and coached:

“This LOI designed to be clean and executable. We focused on clarity around price, timeline, and diligence so both sides know exactly what success looks like before attorneys step in.”

Simple. Calm. Professional.

That tone matters, especially if you’re an introverted agent who prefers preparation over pressure.

When to Push, and When to Hold

Push on:

Due diligence access
Financing clarity
Timeline certainty

Hold on:

Minor cost allocations
Cosmetic language edits

Use isn’t about aggression. It’s about clarity.

Final Thoughts

If you can structure a strong LOI, you instantly elevate how principals see you.