What is a letter of intent when buying a business?
Direct answer
A letter of intent (LOI) is a short, mostly non-binding document in which a buyer proposes the key terms of a purchase before lawyers draft the full contract. In a senior housing sale, it sets the price, structure, deposit, due diligence period and closing timeline, and it usually starts a period in which the seller stops negotiating with other buyers.
What to know
The LOI comes after the buyer reviews the Confidential Information Memorandum and tours the community, and before due diligence.
Most terms are non-binding, but LOIs commonly include binding confidentiality and exclusivity provisions. Read them with your attorney.
Compare LOIs on more than price. Buyer qualification, financing contingencies, the length of due diligence and the licensing plan all affect whether a deal closes.
Once an LOI is signed, the seller's attorney typically drafts the purchase and sale agreement, along with any interim management, lease or transition agreements.
This is general information, not tax, legal or investment advice. Talk to your CPA and attorney about your situation.
How Haven helps
Haven helps sellers compare letters of intent and negotiate terms through closing. See how Haven's sales process works.