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Letter of Intent

Letter of Intent and the Importance of Due Dilligence in Real Estate

The Letter of Intent (LOI) is signed on the condition that the organization being bought effectively finishes the due diligence process.

The posturing of this inquiry  represents a fundamental shift in the balance of power towards the buyer.

This is on the grounds that the buyer has the right to choose whether or not your organization breezes through this test. Since the buyers frequently pay for the due steadiness, the sellers just about never have the right to see the conclusion of the verification (due diligence report).

Sellers need to comprehend that the fundamental assignment of due diligence is not just checking the states of the target organization, additionally a quest for possible risks, which will be utilized within the last phases of transactions to bring down the value or change the deal structure.

This is paramount in light of the fact that at this phase of the procedure, sellers are as of now practically “partitioning up their millions” agreed upon in the LOI while believing that the negotiations are completed, and that all outstanding questions can be easily answered.

A lot of people even accept that they ought to be as open as could be allowed at this stage, consequently demonstrating that there is nothing to cover up.

This is a common mistake, however, and negative impacts can happen rapidly.

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This article is a content of Brickstone – an integrated multi-disciplinary professional service firm providing advisory, design, construction services and property asset management services.

To know more about the topic highlighted in this article, please refer to the articles listed below:

Importance of DUE DILIGENCE for a Real Estate Investor

My Real Estate Scam Story

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Understanding Zoning and Planning before Property Acquisition

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