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Using Letters of Intent With Real Estate Agents
Some real estate agents and real estate brokers prefer to write up a contract for each offer, while others use a letter of intent to express interest in a property and to work out the details before writing up a full contract to purchase real estate. Many bank owned properties (also known as REO properties) are explicitly telling agents not to submit letters of intent on their listings, but with private sellers, a letter of intent can be a good way to introduce your creative offer to a seller without a huge amount of time invested by your real estate agent. If you are dealing directly with sellers to buy properties, rarely will you need to use a letter of intent. Instead, you'll be meeting with them in person to sit down and discuss options for buying their property. However, if you are working through a real estate agent (or two real estate agents if you're not dealing with the listing agent directly), letters of intent can help you succinctly express your offer in the best light, especially when you don't know if the agent who will be presenting your creative offer will understand the full benefits of it. For example, I usually buy houses directly from sellers, but last week I started to make some creative owner financing offers for some houses through real estate agents. Once I was able to talk to the agents representing me, they immediately saw the benefits of my offer to some sellers. Unfortunately, the agents I talked to would be presenting my offer to another agent that represented the seller. So, I am relying on my agent to express the benefits of my offer to the seller's agent, who in turn will present the benefits of my offer to the seller. With a concise letter of intent, I am hoping to give my offers a better chance of getting accepted by the seller despite all the moving parts and unknowns. So, if you are working with a real estate agent, talk to them about whether using a letter of intent would be better with the offers you are making or if they want to continue to write up full contracts for each offer. James Orr is a professional real estate investor, marketing expert and founder of the LearnToBeRich.com on-line investment game He works with a network of real estate agents, brokers and real estate investors across the United States through the AnalyzedDeals.com website
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