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Document Description
This Memorandum of Understanding (MOU) for the Purchase of Real Estate sets out the principal commercial terms agreed in principle between a buyer and a seller before entering into a binding purchase agreement. It is designed to record mutual intent, align expectations, and provide a structured framework for negotiations, while expressly remaining non-binding unless and until a formal purchase agreement is executed.
The template covers the core commercial and procedural elements of a real estate transaction, including identification of the property, purchase price structure, financing conditions, closing mechanics, possession timing, inspection rights, seller’s title warranties, dispute resolution, and notice requirements. By documenting these points early, the parties reduce the risk of misunderstandings, streamline due diligence, and shorten the timeline to a definitive agreement.
Importantly, the MOU clearly distinguishes between commercial alignment and legal commitment. The non-binding provisions ensure that neither party is legally obligated to complete the transaction, negotiate in good faith, or proceed to closing unless a formal purchase agreement is signed. This makes the document particularly suitable for early-stage negotiations, cross-border discussions, or transactions subject to financing or regulatory uncertainty.
The template is jurisdiction-agnostic and can be adapted to different legal systems through its dispute resolution and governing law clause. It is suitable for residential, commercial, or mixed-use real estate transactions and can be used by individuals, companies, or institutional buyers and sellers.
How to use this document?
1. Agree on Key Commercial Terms
Discuss and align on price, financing, timing, and inspections before drafting.
2. Complete and Review the MOU
Fill in the agreed details and ensure both parties understand the non-binding nature.
3. Use as a Basis for the Purchase Agreement
Provide the signed MOU to legal counsel to draft the binding purchase agreement.
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