What is the difference between an LOI and a Purchase Agreement?

Letters of intent (LOI) are not typically binding and should not therefore be taken as seriously as a written offer or purchase agreement. Letters of intent are very common for very large transactions; however, this is usually because the buyers are larger corporations or private equity groups, have credibility and backgrounds, and excellent business credit. 
On smaller transactions, we only recommend accepting an offer to purchase or purchase agreement, along with an earnest money deposit. It is too easy for a buyer to walk with a non-binding LOI and no earnest money deposit. Buyers or larger companies invest a significant amount of money and time, and this displaces cash earnest money deposits.