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This position expressed by one representative of a seller, a Swedish_based broker, in a recent exchange with this writer's office regarding the seller's offer wherein the prospective buyer's mandate resisted the broker's insistence that the prospective buyer must first sign an LOI, pretty much sums up the traditional rationale offered by sellers and/or their agents for having an LOI:

In sum, the rationale underlying the Seller's demand for LOI, can essentially be summed up as follows: 1) That giving an LOI to a seller by a prospective buyer, is an indication that the buyer is "serious" and willing to purchase; 2) That use of the LOI is the usual way of initiating a purchasing proposal by a buyer, and is the right and proper way to go; and 3) That there is nothing for anyone in the deal to lose by a prospective buyer signing an LOI.

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