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LETTER OF INTENT

DATE:  ___________________

Seller’s Name:
Seller’s Address:
City, State and Zipcode:

 

Dear______________________________,

The purpose of this letter is to formally memorialize our interest in and willingness to purchase the above referenced property, on the general terms and conditions set forth herein.  If acceptable, this letter of intent will represent a summary of an initial understanding between us, which can then form the basis of opening an escrow based on a set of forms required by California Civil Code paragraphs 1695 through 1695.17. These forms consist of a Home Equity Explanation and Agreement, a Notice of Default Purchase Agreement and a Seller’s Notice of Cancellation of Notice of Default Purchase Agreement.

THIS LETTER OF INTENT IS FOR SIMPLE CLARIFICATION OF THE TERMS AND NON BINDING ON THE SELLER/LESSEE. UPON ACCEPTANCE BY SELLER, A BINDING CONTRACT WILL BE IMMEDIATELY PREPARED WHICH WILL STATE THE SELLER’S RIGHT TO WITHDRAW WITHIN FIVE DAYS AFTER SIGNING. WE CANNOT ASK YOU TO SIGN A DEED OR ANY BINDING DOCUMENT DURING THE FIVE DAY WINDOW PERIOD. 

  1. PROPERTY TO BE PURCHASED AND LEASED BACK TO SELLER:

 

That certain improved real property located at:______________________

  1. PARTIES TO THE TRANSACTION

 

              The BUYERS/LESSORS are THE BETTER WAY HOME, A Delaware Limited Liability Company registered with the California Secretary of State.  The Seller/Lessee is exclusively represented by Saul Larner, Ph.D., LL.M. a Realtor licensed in California as a duly licensed real estate broker   and discloses that one of the members of the L.L.C. purchasing the property is a relative. However, California Law requires that any broker makes full disclosure to the buyers as to the condition of the property.  (See California Association of Realtors Form BIA).

  1. PURCHASE PRICE:  The purchase price shall be $_________________.

 

  1. PAYMENT OF PURCHASE PRICE:  The payment of the purchase price of the property shall be:
    1. INITIAL DEPOSIT:  BUYER/LESSOR shall make a good faith deposit into an escrow account, established by the parties of $________.  The deposit shall be fully refundable during a 15 working day review period from opening of escrow, in which the BUYER/LESSOR shall be satisfied as to the encumbrances on the property, the agreed  lease between the SELLER/LESSEE and the BUYER/LESSOR, approval of the Preliminary Title Report, Covenants, Conditions and Restrictions, Easements, Condominium By-laws and Articles of Incorporation, if any.  Also, approval, at Buyer’s  expense of an inspection and investigation of the premises, including heating, plumbing and sewage system, electrical, built-in appliances, roof, foundation, mechanical systems and pool and air conditioning (if any), a Geological Study Zone Report and a report of special assessment liens pursuant to local ordinances.  Any disapproval on the part of the BUYER/LESSOR must be reasonable.

 

             5.      (b)   BUYER/LESSOR shall deposit an additional deposit of         $__________ to be placed into a trust account within ten days of opening of escrow.

(c)  Balance due and payable to Escrow Holder five business days prior to the close of escrow, including any additional sums necessary for closing costs and adjustments between BUYER/LESSOR and SELLER/LESSEE and all sums set forth in paragraphs herein.

6. CLOSING DATE:  The purchase sale-leaseback transaction shall   
close on or before __________________ .

 7. TITLE INSURANCE: BUYER/LESSOR will require an ALTA owner’s policy of title insurance in the amount of the purchase price.  Buyer shall pay for any title insurance policy insuring Buyer’s lender, unless otherwise agreed to in writing.  Fee simple title to the property is to be conveyed to BUYER/LESSOR free and clear of all liens, restrictions, encumbrances, excepting only those exceptions to title which are approved in writing by BUYER/LESSOR. 

A. COSTS:  BUYER/LESSOR shall pay all of his legal fees and costs, the premium for the title insurance policy and all endorsements thereto, the cost of any documentary or other transfer taxes applicable solely with respect to the sale of the Real Property, sales tax, if applicable on the sale of the Personal Property, termite inspection, building inspection and recording fees.  SELLER/LESSEE shall pay  all appraisal charges and all legal fees and costs incurred by him.  Both parties will each pay one half of the escrow fees.  SELLER/LESSEE will pay a real estate commission per their agreement with SAUL LARNER, Ph.D., LL.M.

B. Purchase price will include existing attached carpets, all existing window coverings and all built-in and/or attached appliances and fixtures.  Any personal property included is sold in its as-is condition without warranty, express or implied and SELLER/LESSEE shall retain possession of such personal property after closing, subject to the terms of the Lease.  No items of personal property are included except for _______________________________________________________

    

  1. LEASEBACK:  Concurrently with close of escrow, both parties shall enter into a Lease in the form attached as EXHIBIT A for an initial term of one(1)year.  The monthly rent under the LEASE shall be $____________.
  2. NOMINEE CLAUSE:  Buyer(s) may take title in the name of a nominee, provided Buyer(s) notifies escrow of said nominee prior to  _____________________, 2006. Failure to notify escrow by said date should be deemed a waiver of this option.
  3. OPTION TO PURCHASE/LEASE ADDENDUM:  With reference to the attached lease dated ___________, 2006,  It is hereby agreed by the parties that in consideration of the execution of said lease and for other consideration, receipt of which is hereby acknowledged, Lessor hereby grants Lessee an option to purchase subject property (EXHIBIT B) for the sum of $________________. Lessee, at his expense shall obtain his own financing.

Lessee may exercise said option at any time prior to its expiration by delivering a cashier’s check in the amount of five percent (5%) of the above sales price payable to_________________ and, within five (5)days thereafter, signing Escrow instruction providing for closing within sixty (60) days of the date Lessee exercised this option.  Lessor agrees to pay (Saul Larner, Ph.D., LL.M.) a commission in the amount of six percent (6%) of the sales price.

This option to purchase shall expire sixty (60) days prior to the expiration of said lease, or any extension thereof.

            If the foregoing meets with your approval, please indicate your agreement of the general terms and conditions set forth, by executing the enclosed copy of this non binding  letter of intent and returning the same to the undersigned, at which time we will open  escrow and order title insurance with the title company chosen by Buyer/Lessor so that we may proceed expeditiously.

Sincerely,

THE BETTER WAY HOME,
A Delaware LLC.

Tamir Nadborny
Buyer/Lessor
LLC Manager

DATE:

© Copyright, Saul Larner, Ph.D., LL.M., Los Angeles, CA 90067

  
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