Looking to sell your property fast but not sure who to trust? Complete our contact form
Looking to sell your property fast but not sure who to trust? Complete our contact form
Everything You Need To Know:
You’re planning to buy or sell a home?
Well, you’ll come across dozens of official-looking terms that you may not have heard before.
One of these many terms is the Memorandum of Sale.
In simple terms, a Memorandum of Sale is a mandatory legal document required to finalise a sale.
Continue reading so you understand whether a Memorandum of Sale is legally binding.
And what does legally binding exactly mean?
This article will answer all of your questions.
And you’ll be able to make an intelligent decision based on the in-depth information provided here.
Let’s dive in!
Want to hear why we recommend My Homebuyers above everyone else?
We have independently investigated all the best cash home buyers in the UK.
We ranked them based on their cash offers, reliability, customer service and 15 more metrics.
And we discovered that ‘My Homebuyers’ are superior in every regard to all other companies.
My Homebuyers will give you the best genuine cash offer, without contracts and without any fees.
While other companies will try to lock you into a contract which is rarely in your benefit. Even if they claim they don’t have contracts, the truth is, they do. And they’ll force you to sign it.
Click the button below to see exactly why we recommend My Homebuyers as your best option.
And how you can use the free Safe Connect™ programme to get VIP treatment from them.
In a nutshell, a Memorandum of Sale, also known as MOS, is a legal document that records information relating to the sale of the property.
It acts as a reference document for solicitors and mortgage advisors for future legal processes and issues associated with a sale.
Although not legally binding, a Memorandum of Sale is required to finalise a sale.
But why precisely is a Memorandum of Sale so important and where do you get one?
Read below to find out.
Since it’s often used for legal purposes, a Memorandum of Sale contains the following important information:
● Final agreed cost of the property
● Full address of the property in question
● Buyer and seller’s contact information (name, address, contact number, and email)
● Solicitors’ contact information, for both buyer and seller (name, address, contact number, and email)
● Type of property, i.e., leasehold or freehold
● Deposit amount or any relevant fees
● Mortgage lender that finances the purchase, if applicable
● Details for the mortgage company, if buying with a mortgage
● Property’s land registration number as given by the HM Land Registry
● Confirmation of ownership via HM Land Registry
● Any property chain information the buyer and seller might be involved in after the purchase was complete
● Expected timescale for contract exchange and completion
● Energy Performance Certificate (EPC), which details the property’s energy use and typical energy costs
● Special conditions of sale, if any; e.g., fixtures, fittings, or furniture that are included (or excluded) in the sale
● Any other relevant or useful information pertaining to the sale.
It’s important to note that a Memorandum of Sale doesn’t have a special or legal format to abide by.
Some memorandums provide all the information above plus more, while others list merely a fraction than what’s stated.
That said, always heed the advice of a solicitor when issuing a Memorandum of Sale, regardless of the format you’re following.
Here’s a template example of a Memorandum of Sale:
Memorandum of Sale
123, Example Street, Town/City, County, Postcode
Purchase Price = £XXX,XXX
Deposit Price = £XX,XXX
HM Land Registry No.: HLR 123456
Buyer Information
Full Name: John Smith
Address: 123 Example Street, London Postcode: SE15 3YN
Phone Number(s): 07000000000
Email: johnsmith@email.com
Seller Information
Full Name: Chris Williams
Address: 123 Example Street, London
Postcode: SE15 3YN
Phone Number(s): 07000000000
Email: chriswilliams@email.com
Buyer Legal Conveyancer
Full Name: Julia Jones
Company: 123 Solicitor’s Firm
Address: 123 Example Street, London
Postcode: SE12 5YN
Contact Phone: 08000000000
Email: juliajones@email.com
Seller Legal Conveyancer
Full Name: Taylor Evans
Company: 123 Solicitor’s Firm
Address: 123 Example Street, London
Postcode: SE90 6YN
Contact Phone: 08000000000
Email: taylorevans@email.com
Mortgage Sale Information, If Relevant
Name of Mortgage Lender: Mortgage Co.
Amount of Mortgage Being Granted: £XXX,XXX
Name of Mortgage Broker / Advisor: Keith Johnson
Contact Information: 08000000000
Email: mortgage.co.johnson@email.com
Property Information
Is This an Auction Sale? (Yes/No)
Is This a Quick Cash Property Sale? (Yes/No)
Is This a Freehold Property? (Yes/No)
Is This a Leasehold Property? If So, State the Remaining Years on the Lease:
Has Ownership Been Checked? (Yes/No)
Is the Energy Performance Certificate Included? (Yes/No)
Fixture and Fittings Included In the Sale:
Fixture and Fittings NOT Included In the Sale:
Exchange/Completion Dates
Expected Exchange Date: 25 November 20XX
Expected Completion Date: 25 December 20XX
Additional Notes
Special Conditions of Sale:
Legal Issues of Sale:
Extra Notes:
A Memorandum of Sale should only be issued after an offer has been made and accepted.
Do note that a Memorandum of Sale differs from a Contract of Sale.
Even when it’s issued and given to the buyer, it doesn’t mean the property officially belongs to them.
Instead, it acts as a written confirmation that the buyer and seller have mutually agreed to a sale price.
Once an offer has been accepted, there’s no particular timescale for a Memorandum of Sale to be issued.
It can take anywhere between 24 hours to 12 weeks, depending on how quickly the seller obtains the information required.
In most cases, any delay is caused by the additional documentation required to finalize the sale, such as the certificate of Energy Performance, land registration number, confirmation of ownership, etc.
Delay can likewise be caused when acquiring details from the buyer, such as the document requiring details of funds, the solicitor’s contact information, and the final agreed cost of the property.
With that said, estate agents typically issue the Memorandum of Sale as soon as possible to quicken the sales process between the buyer and seller. After all, the faster the sale, the quicker the commission.
If the Memorandum of Sale takes longer than a few short weeks to materialise, there might be an issue with the property documents.
It’s also possible that the seller is waiting on more viewings before accepting your offer.
As mentioned earlier, a Memorandum of Sale isn’t legally binding. In fact, signatures aren’t even required to complete a Memorandum of Sale.
Unlike property transfer documents, changes can still be made in a Memorandum of Sale upon the insistence of the buyer or seller.
The buyer or seller can also pull out after the Memorandum of Sale has been produced if either party has changed their mind.
A Memorandum of Sale is issued by either the estate company or the estate agent once the buyer has accepted the offer by the seller.
The seller will provide the estate agent or the estate company with the necessary details, including the buyer’s contact information, the solicitor they’ve chosen for their conveyancing, and other information such as EPC, land registration number, and confirmation of ownership.
Once the documents are ready, the estate company or agent will issue the Memorandum and proceed with the final aspects of the sale.
If you want a sale to go through quickly and efficiently, issuing a Memorandum of Sale is crucial.
As mentioned above, a Memorandum of Sale lists all the important information related to the sale of the property, including the cost of the property, buyer and seller contact information, land registration number, and any other relevant or useful information pertaining to the sale.
It’s basically a one-stop guide to everything property related. It saves a significant amount of time when selling the house, and acts as a precursor to the final contract.
Furthermore, a Memorandum of Sale gives solicitors, mortgage lenders, and other third parties a consolidated source of information, which can aid in legal proceedings, applications, and so on.
A property sale can’t proceed without a Memorandum of Sale.
If a Memorandum of Sale is delayed, so will the purchase of a property. It’s a mandatory document; without it, the sale won’t legally go through.
With the right agent, a Memorandum of Sale shouldn’t take longer than a week or two to be submitted.
A Notification of Sale is another term for a Memorandum of Sale.
Both contain the exact same information and the exact same function.
A Notification of Sale shouldn’t be confused with a Notice of Sale, which is a legal document a mortgage lender sends to a borrower as part of their mortgage agreement.
Once the Memorandum of Sale has been produced and exchanged, the legal sales process begins.
First, the property will be removed from the open market and marked as SSTC, or Sold Subject to Contract.
Buyer eligibility checks will then be conducted to make sure the buyer is in a financially viable state to proceed and complete the purchase.
The solicitor may ask the buyer for Proof of Deposit or evidence of a mortgage proposal, which includes the buyer’s last three months’ payslips, as well as proof of identity which comes in the form of a passport or driving license.
Additionally, the solicitor will require several documents from the property owner, including an updated Property Information Form (TA6), Fittings and Fixtures Form (TA10), and, if relevant, a Leasehold Information Form (TA7).
After the required forms have been submitted, a number of mandatory searches will be conducted in and out of the property.
The search reviews the local area’s upcoming construction plans that may impact the property, regardless of how small. It also inspects environmental factors that the buyer might need to consider before purchasing the property.
Surveys will also be conducted by the Royal Institute of Chartered Surveyors (RICS), which covers three main surveys: General Condition Report, Homebuyers Survey, and Structural Survey.
The RICS General Condition Report covers the following points:
The RICS Structural Survey helps the buyer make a reasoned and informed decision when purchasing the property. It reports the following:
Upon completing all the required RICS inspections, the finalisation of sale will commence.
The solicitor will issue an official Transfer of Ownership form (TR1) that both the seller and buyer must sign. Once signed by both parties, the sale is legally binding.
The finalisation of a TR1 takes anywhere between several weeks to several months. Usually, though, it takes no more than four to six weeks to complete a transfer of title.
There are several reasons that cause a Memorandum of Sale to fall through, including:
Most of the mentioned problems occur due to issues within the property chain.
For reference, a property chain refers to a group of properties where the finalisation of a sale is dependent on the sale of a connected property.
This means that if a buyer wants to purchase a house, he or she must first wait until the seller buys their next home to finalise the transfer of ownership.
The more people in the chain, the more complicated and lengthy the process. If you want a quick and issue-free purchase, make sure the property you’re buying is chain-free.
A Memorandum of Sale can also fall through if the document takes longer than necessary to issue. The longer it takes to issue, the longer it takes to complete the sale and the higher the risk that the buyer or seller may renegotiate on the price. It also increases the risk of the buyer backing out of the sale entirely.
Selling property is a timely process. Between advertising and searching for potential prospects, it can take months and sometimes even years to finalise a sale. It’s especially frustrating for a sale to fall through while issuing a Memorandum of Sale.
Here’s how to prevent the sale from falling through just as you’re issuing a Memorandum of Sale.
To maximise the chance of a successful property sale, have all the important documentation at an arm’s reach. Collect all relevant paperwork that might be required for the sale.
Here are some of the important documents required to complete a sale:
Gather the above-mentioned documents even before you find a buyer, as it might take weeks to finalise a single document. If you’re not quite sure where to start, ask for the guidance of a solicitor of a legal representative.
In most cases, the sale of your property depends on the expertise of the estate agent.
As such, when choosing an agent, make sure he or she has a ton of experience.
If possible, find an agent that has successfully sold a property in the same area as your property.
Also, make sure they’re proactive in gathering feedback from prospective buyers to make the sale process smoother and more efficient.
An experienced agent will also make sure that the Memorandum of Sale is issued in a timely manner.
As mentioned above, one of the biggest reasons a property sale falls through is due to the delay in issuing the Memorandum of Sale.
Whilst it’s tempting to set the highest price possible for your property, it may save you a lot of time (and heartache) by going for a slightly lower offer to find a more solid buyer. If your property price is set too high, not a lot of people will be interested.
Price your property competitively—but not too competitively. You certainly don’t want to sell your property below the market value.
Setting an appropriate price for your property reduces the chances of your buyer pulling out because they found a “better” or cheaper option. Ideally, your property price should be within 10% to 15% of the average sold price in your neighbourhood within the last six or so months.
If you can’t quite decide how much you want your property to cost, let a real estate agent do it for you. Experienced agents can set a price on a home the minute they step into the property.
They know how valuable your property is and how much it usually sells in the neighbourhood.
While it’s tempting to include your property in a property chain, it might prevent you from selling your property in a timely manner. Avoid this risk by making yourself chain-free.
If the property you’re selling is where you currently reside, it’s often wise to proceed with the sale and move into a rental property while searching for your next home.
This way, the buyer won’t have to wait until you purchase a new property and drop the sale if it takes too long.
Communication and trust are two of the most important aspects of selling property.
It not only keeps all parties connected, but it also ensures transparency from the Memorandum of Sale to the property transfer.
It likewise reduces the likelihood of the buyer pulling out before the exchange, as you’ve already built a personal connection with them.
With that said, keep the relationship between you and the buyer professional.
If the buyer feels too comfortable with you, they might lower their offer at the very last minute, despite having already agreed to a higher price. This is called “gazundering.”
Unfortunately, gazundering is an extremely common tactic among homebuyers. It often backs sellers into a corner, forcing them to sell at a lower price to “get things over with.”
If such a scenario happens, it’s best to step away from the transaction and search for another buyer.
According to the HOA (Home Owners Alliance), one in three property purchases fall through. To avoid financial fees associated with being gazumped or the seller changing his or her mind, it’s worth getting a Home Buyer’s Protection Insurance.
This insurance allows you to claim back some of the valuation fees, mortgage/lender fees, conveyancing fees, and survey fees you’ve spent should your purchase fall through.
The cover returns the following amount:
We want to help out as many people as possible. That’s why we created this comprehensive article.
If you are looking to sell your property, call us on 0333 242 2814 or message us through the live chat.
Depending on your preference and circumstances, we’ll connect you for free with one of our strictly vetted, ethical partners.
They will help you sell your property for the best offer you can realistically achieve.
They will take care of all of the legal processes and fees and you’ll get the cash straight into your bank account.
With our partners you can achieve a very fast sale or a slower one if you’re not pressed on time.
Faster sales usually yield a lesser price but they save you time.
It all depends on your circumstances and preference.
A Memorandum of Sale is a mandatory legal document that records the details of a property sale.
It documents all the relevant information agreed between buyer and seller, including the property cost, deposit fees, seller and buyer contact information, and more.
A Memorandum of Sale isn’t to be confused with a Contract of Sale, as the former isn’t legally binding while the latter is.
Instead, it’s a formal document that shows that the buyer intends to complete the transaction as stated in the document.
More To Explore
The Definitive Guide:
How to Stop Your House From Being Repossessed
Read More >>
All-inclusive Guide:
Selling a Property After the Death of Parents
Read More >>
