WHAT IS AN EXPRESSION OF INTEREST LETTER?
An Expression of Interest (EOI) letter in real estate is a document used by a potential buyer, tenant, or investor to formally express interest in a property or real estate opportunity. Unlike a Letter of Intent (LOI), an EOI is often less detailed and more open-ended. It typically signals that the person or entity is interested in exploring a deal or transaction further but does not yet make any binding commitments or propose specific terms.
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The main purpose of an EOI is to:
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Express interest: It signals to the seller, landlord, or developer that the party is interested in acquiring or leasing the property.
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Gather information: It may serve as a way for the interested party to request more information or negotiate details before moving forward.
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Show seriousness: While not a formal agreement, it shows the potential buyer or investor is taking steps to explore the opportunity.
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An EOI letter typically includes:
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Introduction: Identifies the party expressing interest and the property in question.
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Interest Statement: A clear statement that the person or entity is interested in the property.
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Basic Information: May mention the type of deal (e.g., purchase, lease, development) and the general terms they might be considering.
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Request for Further Information: Often includes a request for additional details such as financial terms, access for inspections, or specific terms of the transaction.
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Non-binding nature: Emphasizes that it is not a legally binding offer or commitment.
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An EOI is typically used when the seller or developer is looking to gauge interest in a property, especially in a competitive market or for properties being marketed to multiple parties. It’s a useful tool in the early stages of a real estate transaction when parties want to test the waters without committing to specific terms or conditions.