Memorandum of Sale: Everything You Need to Know
[updated in March 2023]
5 takeaways – memorandum of sale
- The memorandum of sale is usually prepared by the seller’s estate agent or conveyancer: While the buyer’s solicitor may also prepare a memorandum of sale, it is typically the responsibility of the seller’s side to prepare the document.
- The memorandum of sale is not legally binding: While the document confirms the details of the house sale and sets out the terms and conditions of the transaction, it is not a legally binding contract. The formal contract is usually prepared by the buyer’s solicitor.
- The memorandum of sale can be used as evidence in case of disputes: Although the memorandum of sale is not a legally binding contract, it can be used as evidence in case of disputes between both the buyer and seller or between the solicitors representing each party.
- The memorandum of sale can be amended if necessary: If there are any changes to the terms of the sale, such as a change in the completion date or the inclusion of additional fixtures and fittings, the memorandum of sale can be amended accordingly.
- The memorandum of sale is an important part of the conveyancing process: The document is an essential part of the conveyancing process, as it provides important information about the sale and helps the solicitors and conveyancers involved in the transaction to prepare the necessary legal documents.
What is a memorandum of sale used for?
Memorandum of sale is a written confirmation that a property sale that has been agreed upon. It contains all the relevant information.
Usually, it’s drawn up by a traditional estate agent, or an auctioneer, or if you are using a house-buying company, they’ll do it after the sale is agreed upon. It is not drawn before completion, though.
Once it has been drafted, it is passed onto the conveyancers (find out what a conveyancer is here who represents the buyers here) who represent the buyers and the sellers. The memorandum of sale document can look different from company to company, so we won’t be sharing an example and getting your hopes up!
What details are included in the memorandum of sale?
The details included in a memorandum of sale can vary depending on the specific circumstances of the sale, but typically include the following:
The agreed-upon sale price:
The agreed price is the amount that the buyer has offered to pay for the property, and which the seller has agreed to accept.
The names and contact details of the buyer and seller:
This includes their full names, property address, and contact numbers.
The proposed timeline for completion:
This is the date by which the sale is expected to be completed, and may be subject to change depending on various factors, such as the results of a survey or searches.
Any conditions of the sale:
This may include details of any fixtures and fittings that are included in the sale, as well as any other conditions that have been agreed upon in the sales process. It will document property defects as well.
The date on which the offer was accepted:
This is the date on which the seller accepted the buyer’s offer, and is an important detail that helps to establish the timeline for the transaction.
The names and contact details of the solicitors representing each party:
This includes the name and contact details of the buyer’s solicitor and the seller’s solicitor.
Who will issue the memorandum of sale?
It is usually issued by a solicitor on behalf of the buyer, but can also be issued by an agent or surveyor.
The memorandum of sale will state the details of the transaction including names of parties involved, agreed purchase price, deposits, and completion dates. It will also include any special conditions that have been agreed upon between the two parties.
When is a memorandum of sale issued?
The memorandum of sale will usually be issued once the buyer has had a survey and there are no major issues with the property. It is typically issued after exchange of contracts, and serves as an agreement between buyers and sellers that sets out all the details of the transaction.
What happens after a memorandum of sale?
We’ve looked at what the document is now the burning question is what’s next? The Memorandum of a sale may be the first step but the process involves a lot of further steps and involves more people from estate agents to solicitors and a few people in between! You might find your estate agent (if you are using one) changes your listing to ‘under offer’ or ‘sold – STC’ – you can find out more about these terms in a blog post we made here – ‘what does STC mean?’
Once the solicitors receive the memorandum of sale the heavy lifting starts! They’ll start the process of doing…
in short, this makes sure that the person buying has the money to buy before you move onto anything else, not much point in doing any more work if there are no financiers eh?! This will normally be something like proof of a mortgage offer (from the mortgage lender) which tends to be known as a Decision in Principle (DIP) or Agreement in Principle (AIP) these will normally last for 2 months before you have to get another, you can find more info about them over here – unbiased.co.uk/life/homes-property/what-is-a-mortgage-in-principle-and-how-long-does-it-last
Don’t also be surprised if you get asked for proof of deposit either, you may even be asked where you got the deposit from before the house sale starts.
Conveyancing is a fancy way to call a specialist solicitor, they’ll get started communicating about the next steps. This is things like checking IDs (they might already have done this) and they may need some fees or upfront cost to cover their service.
Most people don’t like to fill in forms, well it’s best not to get a career as a conveyancer as they need to fill in forms such as:
TA6: Property Information Form;
TA10: Fixtures & Contents Form;
TA7: Leasehold Information Form (if you were selling a flat).
If you wanted to see an example you can see one here – https://www.lawsociety.org.uk/support-services/advice/articles/ta-form-specimens/
Whilst doing this they may also handle:
two forms of (certified) identification.
Warranties, guarantees or planning permissions, building control certificates.
Title plan and/or register – if you don’t have any copy of these your solicitor can help to get a copy.
Any other information you need for the property transaction to move along, if it’s a leasehold property there will be even further checks.
After this, you’ll get be able to get started with the mortgage company (whoever you’re using) this helps ensure that the mortgage is ready for when the contracts are exchanged (the property purchase is finally complete!) and you can move in or out with no holdups.
The solicitor who is helping the buyer will also start searching for such fun things as:
Local authority checks, environments, water/drainage chancel repairs and mining or brine/common registrations and clay searches. Basically, they’ll search high and low to ensure that what you see is what you get. There is some crossover here between this and a survey, e.g. you don’t want to find the house is fine but then it’s on a flood plain!
Does a memorandum of sale need to be signed?
You do not need to sign a memorandum of sale as it is not legally binding, once you exchange contracts there is no going back. The purpose of the document is to announce the intentions of a sale not a legal contract.
Can changes be made to a memorandum of sale?
Yes, changes can be made to a memorandum of sale. If there are any changes that need to be made, both parties must agree and sign off on them in order for them to be valid. It is important that all changes are recorded clearly in the memorandum of sale document so they are legally binding.
Is a memorandum of sale legally binding?
It is not a legally binding document, in UK property law you can change your mind anytime before contracts exchange, an estate agency has to pass offers on and so this is often where Gazumping and gazundering come from.
Can I still sell my house without a memorandum of sale?
Technically, it is possible to sell a house without a memorandum of sale, but it is not recommended. The memorandum of sale is an important document that confirms the details of the sale and sets out the terms and conditions of the transaction.
Without a memorandum of sale, it can be difficult to ensure that all parties are clear about the terms of the sale and that the transaction proceeds smoothly.
RICS Homebuyer survey
Normally you’ll want to arrange a Survey (We do this for you at SPB) this is to help find out any issues with the building and the ground it sits on.
This should be done by a professional from RICS – the Royal Institute of Chartered Surveyors. Whilst not essential it is recommended and for securing mortgage funds you’ll normally need at least a basic one. (to make mortgage lenders happy)
There is more than one kind of survey too!
‘RICS General Condition’
The RICS general condition report is the minimum requirement for mortgage companies it will involve checking the overall state of the property and doesn’t really go into many details. Normally the surveyor will spend about an hour looking around. It’ll get the job done but might not uncover deeper issues with the property. It’s a bit of a what you see is what you get in the report.
‘RICS Homebuyers Survey’
Bit of a boring name if you ask us but this survey gives more information about any issues your property could/would have. This could be issues like damp, subsidence or structural issues. Unfortunately, it will not tell you if it’s haunted!
When conducting this style of report the surveyor will not move furniture or cause any issue to the seller so the grand piano is safe where it is! You’ll also find you get a valuation which is normally where HM land registry gets their data.
If issues are found it can sometimes be used to renegotiate the price though it’s up to the seller if they want to proceed or not. You shouldn’t need to change the memorandum of sale if you do change the price, letting the solicitors know will suffice. This report is normally a good middle ground between price and covering your bases.
‘RICS Structural or building survey’
Let’s say you want the most bang, the biggest and best survey this is your choice. It has all the bells and all the whistles and It ensures you don’t have any surprises, the house will not be swallowed into another dimension unexpectedly though no there are no guarantees!
The RICS surveyor will spend some time checking the property and it’s normally the type of survey you’d want to get if it’s an old property or hasn’t be refurbished in a long time or anything that’s unusual about it but it all comes at a cost.
For the cost, you’ll get a very detailed report and the surveyor will examine every inch of the property, you’ll also get some information about potential costs to get the property to an acceptable standard if relevant.
It ensures you don’t have any unexpected surprises with the property down the line and gives you a bit more confidence in the property transaction.
It is worth noting though that even if you get a survey the sale may not go through or you find something that means you do not want the sale to go through and this means you might need to get another survey for the next property you want so it could cost you though it is cheaper
Frequently Asked Questions and a few other things:
What to do if an estate agent doesn’t send a memorandum of sale?
If an estate agent doesn’t send a memorandum of sale, it’s important to take action to ensure that the sale process moves forward smoothly. Here are some steps you can take:
- Contact the estate agent: The first step is to contact the estate agency and request that they send a memorandum of sale.
- Follow-up: It’s important to follow up to ensure that the document is sent.
- Consider contacting the seller directly: If you’re unable to get a response from the estate agents, you may want to consider contacting the seller directly to request a memorandum of sale.
- Speak to your solicitor: Your solicitor can also help to ensure that the necessary documents are prepared and exchanged, and can follow up with the estate agents or seller as needed.
- Escalate the matter: If all else fails, you may need to escalate the matter to the estate agent’s manager or to a regulatory body, such as The Property Ombudsman, to seek assistance in resolving the issue.
Who produces the memorandum of sale in a private sale?
In a private property sale, where there is no estate agents involved, the memorandum of sale is typically prepared by the solicitor or conveyancer representing the seller. The document confirms the details of the sale and sets out the terms and conditions of the transaction.
The seller’s solicitor or conveyancer will usually send the memorandum of sale to the buyer’s solicitor or conveyancer to ensure that both parties have a record of the agreed terms of the sale.
How long after the memorandum of sale to the completion of the property sale
The length of time between the memorandum of sale and completion can vary depending on a range of factors, including the complexity of the transaction and the speed at which the necessary legal and financial arrangements are made. In some cases, completion can take place within a few weeks of the memorandum of sale being issued, while in other cases it may take several months. On average it takes 2-4 months unless you are in the property chain involving buyer in a difficult situation.
What about memorandum of sale when buying at auction?
When buying a property at auction, a memorandum of sale is usually prepared by the auctioneer or the seller’s solicitor. The memorandum of sale is typically issued immediately after the auction sale, once the successful bidder has been identified and the sale has been agreed.