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In this video tutorial on writing an agreement letter, the host explains that a letter of agreement is a legal document establishing an official understanding between two parties regarding a transaction. It is binding and can be crafted by anyone. The tutorial provides a step-by-step template for writing an agreement letter. Start by including a header with your name in capital letters, along with your address details (city, state, and zip code). Next, write today's date on the right side, and on the left, add the recipient’s full name, title, and address. Open the letter with "Dear Mr. or Ms." followed by the recipient's name. The first paragraph should introduce the purpose of the letter.