LOI etiquette? Send to seller or broker

searcher profile

January 28, 2024

by a searcher from Louisiana State University - E. J. Ourso College of Business in Atlanta, GA, USA

We developed some rapport with the seller, talking several times a week, during our light due diligence period. The broker has been CC on everything but has not been directly involved since the early days.

Do we submit the LOI to the seller or broker in this case?

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commentor profile
Reply by an intermediary
from Clemson University in Raleigh, NC, USA
You send it ONLY to the broker. An experienced broker will assist you in putting your best foot forward. Too many times, a prospective buyer has sent an LOI to myself and my client with a term or condition that was off-putting to the seller. Use the broker to your advantage. They know their client and have likely discussed many details of their desired outcome. They can serve as a buffer minimizing friction and conflict that you didn't intend. If the broker has a strong relationship with the seller (and most do) and you send it only to the seller, both are going to think less of you.
commentor profile
Reply by an intermediary
from Boston College in Mansfield, MA, USA
I've been cut out 2x's. Both times, the buyer convinced the seller that it would be more expedient if I were cut out. Both times, I reminded my client that our agreement states I get paid if you close with this buyer whether or not you use my services during diligence (which is the worst part of the process buy far). I've only had 2 deals not close after an LOI was signed. Guess which two?
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