Form 1.8 is the “Letter of Intent,” designed to help a potential Buyer and Seller negotiate a transaction. Letters of Intent are nonbinding, detail-light versions of the purchase and sale agreement that parties can go back and forth over without wasting too many trees on the paperwork. In effect, it is a nonbinding wish-list document that outlays the primary terms; how much does it cost, when will it close, what sort of terms do you plan to use, etc.
It can be used for any of the Oregon REALTORS® purchase and sale agreements, and will provide for many of the malleable terms up front in three concise pages. The parties can modify the terms after agreeing to a Letter of Intent, but once the two sides agree to the Letter of Intent, they know that the agreed upon terms are largely acceptable to both sides and will get the deal done.
There are some parts of the LOI that are binding; such as the agreement that parties will negotiate in good faith and make reasonable efforts to arrive at a mutually agreeable contract, the agreement to keep the LOI information confidential and to provide documents back to the other party, and the acknowledgement that the brokers and real estate agents involved in the transaction were a part of the transaction [for the purposes of receiving a commission if a sale successfully occurs]. These “binding provisions” are only binding if the parties both sign the LOI, so it isn’t like a Buyer can just send the LOI and bind the Seller to silence. Binding provisions only bind when the parties agree to them.