Memorandum of Sale: What You Need to Know
Estimated reading time 5 minutes
Every house sale will require a memorandum of sale to be issued. So, if you’re buying or selling a property, it can be helpful to know exactly what a memorandum of sale is, when it will be issued in the transaction, and what happens once it’s been sent. As property sale experts, we explain everything you need to know about a memorandum of sale in this guide.
What is a memorandum of sale?
A memorandum of sale is a document used when buying and selling a property. It will detail all the essential information of the transaction, such as information about the property itself as well as the buyers and sellers.
Most memorandums of sale will include:
- The address of the property
- The agreed sale price of the property
- HM Land Registry number and proof of ownership
- Whether the sale is from a cash house buyer or with a mortgage, or via auction
- How much deposit will be paid
- Name, address and contact details for the buyer, the seller, and both solicitors
- Whether the property is freehold or leasehold
- Estimated date for exchange and completion
- Any fixtures and fittings that will be included
- Any conditions related to the sale, such as repair work that will be completed prior to completion
It will usually be issued by the estate agent and sent to the buyer’s and seller’s solicitors via email or post. The buyers and sellers themselves will not be able to view the memorandum of sale, as it contains confidential information about each party. The solicitors will act as the liaison to pass on information as needed.
What is a memorandum of sale used for?
The memorandum of sale is used to keep all of the information related to the property sale in one place. It helps the conveyancing solicitors to have one document to refer to when they need to find a specific detail about the sale. It makes it easier to secure a quick house sale and prevents time from being wasted finding relevant information.
When is the memorandum of sale issued?
The document will be issued by the estate agent once the property has been sold subject to contract, usually the day the selling price has been agreed by both parties.
Most estate agents will be keen to get the memorandum of sale out to the solicitors as soon as possible, to help the transaction complete faster. However, sometimes there can be delays, for example, if the seller is still choosing their solicitor. It can be best to keep in contact with the estate agent to see where they’re at with the process. You can also help to speed the process along by making sure you have all your information to hand prior to the memorandum of sale being created.
Is a memorandum of sale legally binding?
The memorandum of sale is not a legally binding document. Neither the buyer nor the seller will need to sign the memorandum of sale, and both are still able to withdraw from the sale after the document is issued.
The memorandum of sale is merely a supporting document to help with conveyancing and to ensure both parties have the information they need to commit to the sale. The sale is only legally binding once the contracts have been exchanged.
What happens once the memorandum of sale is sent?
Once the memorandum of sale is sent, the sales process can really get going. Checks will be undertaken on the buyer for proof of funds, either with a mortgage agreement in principle or with a bank statement showing the necessary funds.
The conveyancing will also begin. This will usually include ID checks for both parties and specific property forms to be filled out. Searches and surveys will also be conducted on the property to ensure it is of good condition and there are no structural issues.
Once conveyancing and checks have been completed successfully, the contracts can be exchanged. As mentioned, this will be when the sale becomes legally binding. Following this, the sale can be completed and the keys can be given to the buyer.
How long does it take from the memorandum of sale to completion?
Typically, it will take anywhere from two to three months for a sale to be completed after the memorandum of sale has been sent. Some sales can take longer if they’re part of a chain.
Selling your property through cash home buyers, like Gaffsy, will often be much quicker. When you sell your home with us, we can give you a chain-free, stress-free property sale. We’ll provide the best cash offer for your property by researching your local market, and work to the timeframe you need to complete the sale. Get your free cash offer today with no obligation.