A Memorandum of Sale is a document which includes written confirmation of a property sale transaction and all of the relevant details. It is a record of the sale of a residential property which has been agreed between a buyer and a seller subject to contract. The document is a simple record, rather than a complicated legal document, and is drawn up by an estate agent, auctioneer or home buying company after the sale is agreed.
What Is a Memorandum of Sale?
A Memorandum of Sale is a document which acts as the written confirmation of all the essential details of a property transaction. It is drawn up by the estate agent after the property goes from being Under Offer to Sold Subject to Contract (STC).
The majority of memorandum of Sales will include the following information:
- The complete address of the property being sold
- The agreed price of the property
- HM Land Registry number
- The contact information of both the seller and buyer
- Contact details of the solicitors representing both the buyer and seller
- Information about whether or not the property is freehold or leasehold (leasehold documents should state how many years are remaining on the lease)
- What type of sale i.e. quick cash house sale, auction sale
- Confirmation of ownership
- Details of any mortgage brokers/advisors involved in the sale
- Expected exchange and completion dates
There are multiple other bits of information that may be included. In general, the more information included, the better.
Why Do You Need a Memorandum of Sale?
You need to have a Memorandum of Sale in order to keep all key information in one place which can save a lot of time when selling a house.
Although it is not a legally binding document, it can help the proceedings and can make sure that it is a quicker and more efficient house sale.
Under UK property law, a sale is only legally binding after the exchange of contracts. However, the contract of sale can only be drafted after the Memorandum of Sale has been received. Therefore, even though it is not a legally binding document, the Memorandum of Sale is an essential part of the property transaction and is crucial if you are applying for a mortgage.
Memorandum of Sale for Quick House Sales
Selling your house to a quick buying company is one of the fastest ways to sell your property. In these cases, the process for a Memorandum of Sale is slightly different. For example, depending on the company you are working for, there might be certain stipulations in the document such as a cash advance. Any key information should be included up front so that there is full transparency and no surprises further down the line.
Memorandum of Sale for Auction House Sales
If you are selling your house at an auction, the buyer will exchange contract as soon as the hammer has fallen – once this happens, they are legally committed to the sale. In these instances, the buyer will then need to complete the Memorandum of Sale as soon as possible and also pay the deposit and auction house fees.
For auction sales, all ID checks must be done on the day. The Memorandum of Sale for auction sales will be forwarded to both solicitor along with other relevant documentation including the exchange contract.
How Long Does It Take From Memorandum of Sale to Completion?
From the moment where the sale is agreed, the entire house buying process takes around 2-3 months on average in the UK. However, this is dependent on many different factors and each house sale will vary. For example, if you are a part of a property chain, there are multiple different transactions which are intrinsically linked which means that there are many stages at which the process can be disrupted and delayed.