LoA is usually the first stage, then Heads of Terms and the Oprion Agreement follows on.Its not a LOA (letter of Authority) you need to sign. They will want and you want an Option Agreement to enter into a formal lease should planning permission be granted. You have nothing until that is signed. Take legal advice the developer should pay for it
Proper legal advice is vital... The Offer on costs will often be piddling, but the Agent will negotiate for better terms.