Document background
A Letter of Intent to Buy Property is a crucial preliminary document used in German real estate transactions when parties wish to formalize their initial understanding before proceeding with a full purchase agreement. It serves as a roadmap for the transaction, typically used when dealing with commercial properties or complex residential purchases where significant due diligence is required. While most provisions are non-binding under German law, the document helps establish key terms, timelines, and conditions for the potential purchase, making the path to the final notarized agreement (Kaufvertrag) more structured and efficient. The LOI is particularly valuable in German property transactions due to the formal nature of the final purchase process, which requires notarization and specific legal formalities. It allows parties to address potential issues and align expectations before incurring significant legal and due diligence costs.
