What Should Be Included in a Letter of Intent to Buy?

A letter of intent to buy, or LOI, is often the first real step toward owning a property. It is a short, written note that tells the seller you are serious and sets out the main terms you are offering. Get it right, and the rest of the deal moves faster and with fewer surprises.

Many buyers rush this or skip it, then run into confusion later. This guide walks through exactly what belongs in an LOI, in plain language. It pairs well with our buyer’s timeline from reservation to turnover, which shows what happens next.

Key Takeaways

• A letter of intent to buy sets out your offer price, payment terms, and conditions before any binding contract is signed.
• Most LOIs are non-binding, but a reservation deposit or an exclusivity clause can carry real commitments, so read it closely.
• A clear, complete LOI protects both sides and speeds up the move to a contract to sell and the deed of sale.

What Is a Letter of Intent to Buy?

A letter of intent is a written offer from a buyer to a seller. It says, in effect, “I want to buy your property, and here are my terms.” It is not the final contract. Instead, it opens the negotiation and puts the key points on paper so both sides are talking about the same deal.

Sellers take a written LOI far more seriously than a verbal offer. It shows you are ready to move, and it gives their agent or broker something concrete to respond to. Good professional brokerage usually means your broker helps you draft it properly.

Is a Letter of Intent Binding?

Usually, an LOI is non-binding. It is a starting point, not a final commitment, and either side can still walk away or renegotiate. That said, some parts can carry weight. If you attach a reservation deposit or agree to an exclusivity period, those specific terms may bind you.

This is why wording matters. A clear “non-binding” line keeps the LOI as an offer, while a reservation fee signals real commitment. When the stakes are high, it is worth knowing when to bring in a lawyer to review it.

What Should Be Included in a Letter of Intent to Buy

A strong LOI is short but complete. These are the parts that matter most.

• Buyer and seller details: full names and contact information for both parties, so it is clear who is offering and who owns the property.
• Property description: the address, the title or tax declaration number, and the lot or unit area. Be specific so there is no doubt which property you mean.
• Offer price: the amount you are offering, written clearly in both figures and words.
• Payment terms: how you plan to pay, such as cash, in installments, or through a bank or Pag-IBIG loan.
• Reservation or earnest money: any deposit you are putting down to hold the property, and whether it is refundable.
• Conditions: anything your offer depends on, like loan approval, a clean title check, or a site inspection.
• Inclusions: fixtures, parking slots, or furnishings you expect to come with the property.
• Proposed timeline: your target dates for signing the contract and completing the sale.
• Validity period: how long the offer stands, giving the seller a clear deadline to reply.
• Signatures: your signature and the date, with space for the seller to signify conformity.

On price, keep it fair and backed by research. Our note on market value versus zonal value helps you avoid lowballing or overpaying.

Spelling Out Your Payment Method

The payment section deserves extra care, because it shapes the whole deal. Be clear about where the money is coming from.

• Paying cash is the simplest and often the strongest offer in a seller’s eyes.
• Bank or in-house financing should say so, since the seller knows the sale depends on approval.
• A Pag-IBIG housing loan is a common route for first-time buyers and should be named in the LOI.
• If you are taking over a loan, see our guide on assume-balance properties before you put the terms on paper.

Conditions and Due Diligence

Your conditions protect you if something turns out wrong. List them clearly so the seller knows what has to be true before you proceed.

Common conditions include a clean title, no unpaid taxes or dues, and the property matching how it was advertised. Checking the title early also guards against scams, as our guide to red flags in property listings explains. It also helps to understand mother title versus individual title before you commit.

Common Mistakes to Avoid

A few simple slips can weaken your LOI or cause trouble later. Watch for these.

• Leaving the price or payment terms vague, which invites disputes.
• Forgetting a validity period, so the offer drags on with no deadline.
• Skipping conditions, which removes your safety net if the title or property has issues.
• Signing a reservation deposit without reading whether it is refundable.
• Describing the property loosely, so it is unclear which unit or lot you mean.

What Happens After the LOI

Once the seller accepts your letter of intent, the deal moves into firmer ground. You typically pay a reservation fee, then sign a contract to sell, and finally a deed of sale once payment is complete. Our explainer on deed of sale versus contract to sell breaks down those documents, and you should budget for taxes and transfer costs from the start.

To see the full journey, from first offer to title transfer, follow the reservation-to-turnover timeline. Buying under a company instead? Read buying property under a corporation name first.

How Cebu Grand Realty Helps

A well-written LOI can make the difference between a smooth purchase and a stalled one. That is where we come in. At Cebu Grand Realty, we help buyers draft clear, fair letters of intent and guide them through every step that follows.

See how we handle a deal from start to finish behind the scenes, browse the best condos in Cebu to find your target, and when you are ready to make an offer, get in touch and we will help you put it in writing.

Frequently Asked Questions

Is a letter of intent to buy legally binding?

Usually not. Most LOIs are non-binding offers. But a reservation deposit or an exclusivity clause inside it can create real commitments, so read every line.

Do I need a lawyer to write an LOI?

Not always, but it helps on larger or complex deals. A broker can draft a standard LOI, while a lawyer is wise when the terms or the title are complicated.

How much earnest or reservation money should I include?

It varies by property and seller. State the exact amount and, most importantly, whether it is refundable if the deal does not push through.

How long should a letter of intent be valid?

A short, clear window works best, often a few days to two weeks. It gives the seller time to decide without leaving your offer open forever.

What is the difference between an LOI and a contract to sell?

An LOI is an early, usually non-binding offer. A contract to sell comes later and is a binding agreement with the final price, terms, and obligations of both sides.

This article is general guidance, not legal advice. For your specific purchase, confirm the terms with your broker or a licensed lawyer.