A letter of intent is a non-binding document outlining key terms of a proposed LA multifamily transaction. Most LA multifamily deals start with an LOI before moving to a full Purchase and Sale Agreement.
The LOI typically addresses: purchase price, earnest money amount, due diligence period length, closing timeline, financing contingencies, and any unique terms. It's not legally binding for purchase obligations but does often include binding confidentiality and exclusivity provisions.
The LOI stage is where buyers and sellers establish alignment before committing legal costs to a full PSA. Well-structured LOIs accelerate the transition to contract.
In LA multifamily, a well-drafted LOI can move from offer to signed PSA in 10–14 days. Sellers who respond quickly and clearly to LOIs tend to close their deals. Sellers who leave LOIs unanswered for weeks often lose buyers to other opportunities.
From the Sterman LA Multifamily Glossary — defined the way a broker with $1.41 billion across 254 closed transactions actually uses these terms.
Michael Sterman, Senior Managing Director Investments, Marcus & Millichap.
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