Buying and selling property can be filled with complex terms, swathes of paperwork, plenty of stress, and a little confusion. Hopefully, our guidance and advice will make things a little easier! Today, we look at the memorandum of sale, an important document for both the seller and buyer that ensures the sale can go through. Without one, you won’t be able to buy or sell a house, so it’s pretty vital you have yours in place. In this edition of our blog, we break down all there is to know about a memorandum of sale so when it comes to selling or buying a home, you’ll be fully up to speed.
Let’s take a look.
The memorandum of sale: An overview
A memorandum of sale is needed for both the buyers and sellers of a property. It’s a document created by the estate agent for the selling party and will detail specifics relating to the sale such as the agreed price, scheduled completion date and much more. Essentially, it sets out the terms of the agreement before the transaction becomes legally binding.
Whilst not legally binding, it does start the process of transferring the property from one owner to another, so it is important to make sure that all the information provided is checked thoroughly. At this stage, either side can still pull out of the sale if they wish.
When is the memorandum of sale issued?
A memorandum of sale is issued once the home has had an offer accepted on it. It is normally issued quickly to ensure a fast sale process; however, delays can happen. To avoid them, it’s advised you have all the relevant paperwork to hand before the memorandum of sale is drawn up. You should see a memorandum of sale within a day or so of the offer being accepted but this could be the first of many. If changes are needed, a new memorandum of sale can be issued, and this could continue until a memorandum of sale both parties agree on is created.
What is in a memorandum of sale?
The memorandum of sale contains vast amounts of information relating to the sale of a property. Some may contain more information than others, but you can expect to see the following in all memorandums of sale:
- The names and contact details of both the buying and selling parties.
- The agreed sale price.
- The address of the property being sold.
- How the purchase of the house is being completed (cash house buyer, via auction, with a mortgage.)
- The deposit value.
- The details of the solicitors or conveyancers representing both parties.
- The date the memorandum of sale is issued.
- Details of the estate agent handling the sale.
- Any conditions of sale. This could include mortgage approval, home inspections, and the inclusion of fixtures and fittings.
The memorandum of sale, due to the types of information it contains, will unlikely be seen by the buyer or seller and instead will remain in the hands of the solicitors who sign it on your behalf.
Is a memorandum of sale legally binding?
No, a memorandum of sale is not legally binding. This means that even once it is issued, either party can still withdraw from the sale or purchase of the home.
Its purpose is to act as a supporting document rather than a legal one. The sale only becomes legally binding once contracts are exchanged.
What happens after the memorandum of sale is signed?
Once the memorandum of sale is complete, the property moves onto the status of Sold STC (Sold Subject to Contract). This means things will now get moving to complete the sale.
Conveyancing will begin as will the various surveys. These will help transfer the ownership of the property and include the paperwork relating to fixtures and fittings.
At the same time, checks on the buyers will also take place. These will include ID checks and proof of funds. Proof of funds must come via a mortgage offer (typically offered within the past 2 months) and evidence of the deposit funds.
Once all these checks are completed, contracts can be exchanged, this is when the transaction becomes legally binding and therefore costly if either party were to back out.
How long after memorandum of sale to completion?
The timescale from memorandum of sale to completion can vary per property transaction but it is typically 1-3months. In some cases, chain breaks can delay the sale significantly, and this wait can be greatly increased. Likewise, it can also be extremely fast. Sales to cash house buyers for example may be completed much more quickly. Although, the offers made by buyers like this are likely to be way under the price you could get on the traditional market.
Delays may also arise if the transaction is particularly complex, or the solicitors are discovering problems during conveyancing.
If you are considering moving house and need a conveyancer to help speed up the process, we can help. Our Epsom conveyancing services are no move no fee, freeing you up from the concern of costly fees associated with your move.
Whether you are looking for houses for sale in Epsom and the surrounding areas, or have a house of your own for sale, speak to our team. Cairds estate agents are independent estate agents who specialise in properties throughout Epsom, Ashtead, and the surrounding towns and villages. Contact us today to find out more about buying or selling property today.