What is a memorandum of sale when buying or selling a house?
A memorandum of sale is an important part of the property buying and selling process, but what exactly is it and what is it used for?
In this guide
- What is a memorandum of sale?
- When is a memorandum of sale issued and by whom?
- What does a memorandum of sale contain and who is it circulated to?
- What does a memorandum of sale look like?
- How quickly will I receive a memorandum of sale once the offer has been accepted?
- What happens after a memorandum of sale has been sent out?
- How long after a memorandum of sale will a house complete.
- Is a memorandum of sale a legally binding document?
What is a memorandum of sale?
A memorandum of sale is a document that records the amount of money being paid for a property. It includes the names of both the property seller and buyer, and the names of the solicitors dealing with both parties.
When is a memorandum of sale issued and by whom?
A memorandum of sale will be put together by the estate agent selling a property as an official notification of sale, once a sale has been agreed.
If it is a private property sale and there isn’t an estate agent involved, the seller will usually put together the memorandum of sale and distribute it.
What does a memorandum of sale contain and who is it circulated to?
A memorandum of sale should include:
- The seller’s details
- The buyer’s details
- Solicitors’ details for both parties
- Information about the property, including whether it is freehold or leasehold – if leasehold, it should contain details about the lease
- The agree price
- Details of any property chain the buyer or seller are involved in
- The buyer’s financial arrangements and mortgage lender (if applicable)
- Details of the proposed timescale for exchange of contracts and completion of the sale
The document will be sent to the buyer, the seller and both solicitors
What does a memorandum of sale look like?
Estate agents will all use a similar memorandum of sale template, which will look something like this.
How quickly will I receive the memorandum of sale once the offer has been accepted?
Timescales will vary, depending on how quickly the required information can be gathered. The estate agent should already have all of the information they need about the property and the vendors, but will have to wait for the buyer to provide details of funds for the sale and their chosen solicitors. If information is provided quickly, a memorandum of sale can be distributed as soon as 24 hours after a sale has been agreed, but it may take considerably longer. If you haven’t received a memorandum of sale within a week of having a sale agreed, you may wish to contact the estate agent to enquire about when you can expect to receive it.
What happens after a memorandum of sale has been sent out?
Once the memorandum of sale has been created, the conveyancing process will begin. The memorandum of sale serves as confirmation for both the buyer and seller that a sale has been agreed, and gives both solicitors the information they need to move forward with progressing the sale.
How long after a memorandum of sale will a house sale complete?
The average property sale takes 2-3 months from the point of a sale being agreed, however it can take longer if you’re part of a property chain.
Is a memorandum of sale a legally binding document?
Whilst a memorandum of sale records the intention of a buyer to purchase a property, it is not legally binding. It can be useful to think of it as the paperwork associated with an offer being accepted on a property, rather than it being sold. A property sale does not become legally binding until sales contracts have been exchanged.
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