The Letter Of Interest (Real Estate) is a crucial initial document in South African property transactions, typically used before formal negotiations or due diligence processes begin. It serves as a professional way to express serious interest in a property while maintaining flexibility for both parties. This document is particularly important in commercial real estate transactions but is also used in significant residential property deals. While not legally binding except for confidentiality provisions, it helps establish the framework for future negotiations and demonstrates the potential buyer's credibility. The LOI should comply with South African property law and market practices, including considerations under the Property Practitioners Act and Consumer Protection Act. It's commonly used when dealing with high-value properties, complex commercial transactions, or situations requiring extensive due diligence before formal offers.

1. Letter Header: Include sender's details, date, and recipient's details in proper business letter format

2. Subject Line: Clear identification of the property and type of communication (Letter of Interest)

3. Introduction: Formal introduction stating the purpose of the letter and brief background of the interested party

4. Property Details: Specific details of the property including address, erf number, and current ownership details

5. Expression of Interest: Clear statement of interest in purchasing/leasing the property

6. Proposed Terms: Outline of key terms including proposed purchase price range or lease terms

7. Financial Capability: Brief statement of financial capability and funding arrangements

8. Timeline: Proposed timeline for negotiations and due diligence

9. Confidentiality: Statement regarding the confidential nature of the communication

10. Closing: Non-binding nature of the letter, contact details, and formal closing