Letter Of Intent Breakup Calculator

LOI breakups have cost. This calculator sums exposure.

Diligence cost

Legal fees

Brokerage claim

Opportunity cost

Total breakup cost

$123,000

Direct cost

$78,000

Indirect cost

$45,000

How the math works

Direct = diligence + legal + broker claim. Indirect = opportunity cost. Total = both.

LOI breakup cost is routinely underestimated by buyers who treat the LOI as truly non-binding. Even when the language says so, diligence-to-date and reputational cost typically run $40-150k on mid-size deals. Walking is often the right call, but know the full cost first.

How to Use

Enter diligence cost incurred.
Enter legal fees.
Enter brokerage claim exposure.
Enter opportunity cost of delay.
Read total breakup cost.

Frequently Asked Questions

LOI legal force?

LOIs usually non-binding except for specific provisions (confidentiality, exclusivity, breakup fees). Real enforceable cost depends on LOI language. Some LOIs specify liquidated damages for walk.

Soft costs?

Diligence already incurred (Phase I, survey, appraisal): $5-50k. Legal fees: $10-100k. Opportunity cost (other deals missed during exclusivity): variable. Reputation cost (with broker, seller, community): hard to quantify but real.

Broker claims?

If broker relied on LOI and procured other buyer to stand down: potential lost commission claim. Usually no legal basis if LOI non-binding, but pressure to settle to preserve broker relationship often real. Factor into walk decision.

How often should I rerun this?

Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.