What is a memorandum of sale?

Accepted an offer on your home? Hooray, you are one step closer to getting your sale over the line.

Now it’s time to kickstart the conveyancing process. In other words, the legal work of transferring ownership of the property to the buyer.

But there’s one thing that normally happens first: a memorandum of sale is issued.

Here’s the lowdown on what a memorandum of sale is and how it impacts your sale.

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A memorandum of sale is a document that outlines the key details of a proposed sale. It’s a summary of what has been agreed between the buyer and the seller.

Information in a memorandum of sale generally includes:

• the address of the property

• the agreed sale price

• the names and contact details of the buyer and the seller

• the names and contact details of the solicitors or conveyancers acting for both parties

• the name and contact details of the estate agent selling the property

• information about the property, such as whether it’s leasehold or freehold

• what, if any, fixtures and fittings are included in the sale

• the Land Registry number

• how the buyer will fund the purchase

• the expected dates for exchange and completion.

A memorandum of sale is a record of an agreed deal. This way, all the important details of the proposed sale are in one place and all the parties are on the same page from the get-go.

In short, it sets the tone for a smooth and transparent transaction. Which is handy because there’s normally a lot of to-ing and fro-ing involved with selling a home.

It’s important that both the buyer and the seller check that all the details in the document are correct to avoid any confusion further down the line.

A memorandum of sale may not be a legally-binding document but it is an important one, as it sets in motion the conveyancing process.

This is normally the point at which the solicitors or conveyancers get to work handling the legal aspects of a transaction.

It is confusing but both terms can be used to describe the same thing: a summary of the deal agreed between the buyer and the seller.

The estate agent instructed to sell the property normally draws up a memorandum of sale.

They do this once the seller has accepted an offer and a deal has been agreed. They then send the document to the relevant parties involved. This includes the conveyancers or solicitors representing the buyer and the seller.

A memorandum of sale can be circulated pretty swiftly, often within days of an offer being accepted. That said, the timescale can vary, depending on the property and the parties involved.

With any luck, the seller will have provided most, if not all, of the details for the memorandum of sale in advance. But it may take longer to draft the document if the buyer or the seller doesn’t have all the relevant information to hand. One such example could be if one of the parties has yet to appoint a solicitor or a conveyancer. Selling a home at auction is a slightly different process. And you may find that a memorandum of sale is circulated straight after the successful bidder has paid their deposit and fees.

A memorandum of sale acts as a starting gun for the legal work of transferring ownership of the property.

Once the document has been distributed, the solicitors or conveyancers make contact and the conveyancing starts.

The next steps tend to include:

• the buyer may want to arrange a survey of the property

• the buyer finalises their funding (if required), such as a mortgage

• the solicitors or conveyancers work on the legal aspects of the transaction. For the seller, this includes filling in lots of forms. For the buyer, this includes running local searches and checking that all the paperwork is watertight

• once all the parties are happy with the terms and conditions of the sale, contracts are exchanged and the sale completed.

It takes an average of 185 days to sell a home, according to our data. That’s around six months between marketing the property to getting the sale over the line. But this is just a guide.

The time it takes to complete the conveyancing can vary. There’s a huge amount to do to get to the point of completion and all sorts of factors can impact timings. For example, part of your property chain may collapse, or the results of a property survey may require attention. The key to completing a sale swiftly and as stress-free as possible is: communication. Yes, communication is king! Keep in touch with your solicitor and the estate agent. Ask for updates and respond promptly to requests for information.

The buyer is able to pull out of a sale without legal repercussions at any point up until contracts are exchanged. This is when the transaction becomes legally-binding. Because the memorandum of sale is not legally-binding, some details of the sale may change further down the line. Or the buyer may pull out completely. Let’s say the property survey reveals a problem or defect with the property. The buyer may want to review their offer. This is allowed - as long as contracts have not been exchanged yet.