What is the memorandum of sale?
The memorandum of sale is a legal document that records specific information about the sale of a property. It is not legally binding, but it sets out the terms of agreement at the start of the conveyancing process once an offer is made and accepted.
Why is the memorandum of sale important?
Conveyancing work cannot start until the memorandum of sale is in place, so this is a vital document in the conveyancing process. It formalises the sale of the property and puts all relevant parties in touch with each other. It changes the status of a sale from ‘under offer’ to ‘sold subject to contract’ which means the house should be removed from the open market and no longer available for viewings. It also provides the basis for the legal contract of sale and to progress and formulise mortgage applications.
Who issues the memorandum of sale?
The memorandum of sale is put together and circulated to the relevant parties by the seller’s estate agent. Information must be provided by the seller and the buyer to their respective estate agents so that the document can be drawn up. The estate agent sends the document to the buyer’s and the seller’s conveyancing solicitor. It can also be drawn up by an auctioneer if a property has been sold at auction.
What information does the memorandum of sale contain?
The memorandum of sale will contain the following information:
- The address of the property being sold
- The agreed selling price
- The seller and the buyer’s name and address
- The details of the conveyancing company representing the seller and the buyer
- Other information such as proposed timescales, how the property purchase is being financed
- It does not need to be signed
What is the time scale for the issue of the memorandum of sale?
The document can be drawn up as soon as an offer is accepted. However, in reality it will take longer. This can be for a number of reasons such as the information required is not forth coming. the seller or the buyer have not decided on their conveyancer, or the estate agent could simply be taking their time.
It is an important document to get right and to chase your estate up on, so it’s useful to familiarise yourself with the term and what the document is for and what information is required. It is also important to ensure the information provided is accurate to avoid delays in the process.
What happens after the memorandum of sale is issued?
Once issued, the sale of a property is formalised, the respective conveyancing solicitors are in touch with each other, and the conveyancing process can begin.