Memorandum of Sale: Your Guide to a Successful Property Sale
Estimated reading time 6 minutes
Selling a house can be fraught with complications and confusion. The minefield of paperwork, the chains and the checks can all make for it to be quite a stressful process. As a result, it often pays to keep up to speed with the array of property jargon that comes your way. One term you’ll hear a lot of when it comes to looking at how to sell a house fast is memorandum of sale. What is it, though, and why do you need it?
In this edition of our blog, we cover all there is to know so that you can achieve the quick house sale you desire.
What is a memorandum of sale?
A memorandum of sale is a document used when buying or selling property. It contains all the vital information concerning the property transaction and records that the sale has been agreed upon between the buyer and seller. That being said, the memorandum of sale is not legally binding. Either party can still withdraw from the property sale even after a memorandum of sale has been issued.
The memorandum of sale can be seen as a supporting document to others that are relevant to the sale, and assists with the conveyancing process. Think of it as a record of a sale that has yet to take place and a tool for the solicitors to use.
A typical memorandum of sale will include:
- The address and agreed sale price of the property
- The name and contact details of the buying party
- Solicitor information for both the buyer and seller
- Estimated dates for completion of the property transaction
- Land Registry number for the property
- Any conditions of sale. This could include repairs, inclusion of fixtures and fittings etc.
- The deposit value
- Whether the property is sold to a cash house buyer, sold with a mortgage or sold via auction
- Property chain information
- Details of the mortgage lender
- Whether the property is leasehold or freehold
Despite not being legally binding, the presence of a memorandum of sale is extremely important. It’s one of the first steps to confirming that a sale has been agreed before contracts get signed and the transaction becomes agreed in the eyes of the law. Once it has been issued, the rest of the process to facilitate a house sale can begin.
Who issues a memorandum of sale?
A memorandum of sale is typically issued by the estate agent and will be sent via email or by post to your solicitor. The property sellers will tend to issue the memorandum of sale, but this is not a requirement, and it can be completed by either side if need be. Much will depend on how the property is being sold. An auctioneer, for example, would draft the sale for houses being sold at auction, and an estate agent would complete the job for those selling via the traditional methods.
As with anything in property, time can be of the essence, so issuing a memorandum of sale is normally quite fast. Usually, it is issued within a day or two of the property having a sale price agreed upon. It then moves onto the status of “sold subject to contract”. However, this can be delayed by either party failing to provide the correct information or documentation when asked.
Despite this being an important document for both you and the purchasing party, neither of you will ever see the memorandum of sale as it holds confidential information about both parties.
When is a memorandum of sale issued?
The memorandum of sale will be issued as soon as the property has an offer accepted, although there can be delays if either party has failed to provide the requested information. In some cases, a delay can be further exacerbated when one party may not have appointed a solicitor.
For the most part, a memorandum of sale will be issued within seven days of the sale being agreed but not completed. However, it could also be issued in as little as 24 hours.
Is a memorandum of sale legally binding?
A memorandum of sale is not a legally binding document. This means that until the point contracts are signed, either party can withdraw from the sale. Even once the memorandum of sale has been issued, either the buyer or the seller can opt to cancel the property transaction if that becomes preferable. The memorandum of sale simply supports the conveyancing process and ensures that both parties have all the relevant information to be able to commit to a sale.
What happens after the memorandum of sale is sent?
A memorandum of sale being issued is among the very first things to happen during the selling process. Once it has been written up and sent out to the solicitors for the buying and selling parties, conveyancing will begin and you are one step closer to completion. Check out our ultimate guide to buying a house for more information.
The first thing to happen once the document has been issued is for the property to move to a status of “sold subject to contract” or SSTC. This removes the property from the market.
Your buyers will then be checked for suitability to confirm they’re still able to complete the house purchase. A mortgage in principle will help with this, although in some cases, proof of deposit will also be requested.
From here, your solicitor will require you to complete some paperwork. Forms TA6, TA7 and TA10 will all be requested.
The solicitor will then conduct the mandatory searches with the Land Registry, the local authorities and those relating to water authorities and other environmental agencies.
The various surveys will then take place, the main ones ideally being completed by a RICS member. Once all surveys are complete, contracts can be exchanged. At this stage, the sale becomes legally binding, and you have sold your house. Things may not move as fast as you would like, though.
How long from memorandum of sale to completion?
Property sales are never fast when they go through the traditional market. This means that even though the memorandum of sale may have been granted in just 24 hours, you could still be waiting 2-3 months or more before you get to complete the sale on your home. This is perhaps why many sellers opt for fully managed services, like those offered by companies like Bettermove. These methods of selling mean the whole process can be completed in as little as 30 days, and with all legal fees covered, they remove much of the stress associated with property transactions.
Choosing a fast sale expert like Bettermove helps you avoid the delays found on the open market. With our team offering a quick house valuation, we can have your home presented to a team of pre-approved buyers within 24 hours of your instruction for us to proceed. Then, within 30 days, your house should be sold. With no legal fees or commission to pay, the Bettermove way is the best way to sell, as you not only get it done fast, but you get it done free. Contact our team today to find out more.