Fact 1. What is a Memorandum of Sale?
The memorandum of sale starts the conveyancing process, documenting agreed terms between buyer and seller after offer acceptance on a residential property.
When you buy or sell a home in the UK, one of the first formal steps that marks the start of the legal journey is the creation of a memorandum of sale. This essential document, issued by the estate agent or seller’s solicitor once an offer is accepted, acts as the official record of the agreed sale terms between the buyer and seller and signals the commencement of the residential conveyancing process.
Understanding the memorandum of sale, its purpose, what it contains, and why it matters can empower both buyers and sellers to navigate conveyancing with confidence and clarity.
What is a Memorandum of Sale?
The memorandum of sale is a document that records:
• The agreed sale price
• The property’s full address
• The names and contact details of the buyer and seller
• The solicitor or conveyancer details for both parties
This document ensures all parties involved—including the estate agents and solicitors—have a clear, shared understanding of the transaction basics. Although it is not legally binding, it forms the foundation for all legal steps that follow, such as title checks, searches, drafting contracts, and exchanging contracts.
Key Components of the Memorandum of Sale
The memorandum typically contains:
• Agreement Confirmation: Written evidence of the buyer and seller’s agreed price and terms.
• Contact Information: Details of all parties’ solicitors or conveyancers to facilitate communication.
• Property Details: Full address and description of the property to avoid any ambiguity.
• Non-Legal Binding Status: While critical in the process, it is important to note this document is not a binding contract yet.
Why the Memorandum of Sale is Important in Conveyancing
1. It Signals the Start of Legal Work
Once the memorandum of sale is issued, solicitors and conveyancers on both sides begin the essential legal checks and paperwork preparation. This includes:
• Obtaining title deeds from the Land Registry to verify legal ownership.
• Conducting comprehensive property searches, including local authority, environmental, and flood risk searches that may reveal critical issues affecting the property.
• Drafting the contract of sale and preparing detailed property information forms, which inform the buyer about fixtures, fittings, and other specifics.
2. It Ensures Transparency and Clear Communication
The memorandum helps everyone involved focus on the same agreed facts and facilitates smooth communication between estate agents, buyers, sellers, and solicitors throughout the conveyancing.
3. Supports Mortgage and Finance Arrangements
Mortgage lenders often require confirmation of a memorandum of sale before issuing official mortgage offers, linking legal and financial aspects of the transaction. This integration helps prevent delays later in the process.
4. Reduces Risks and Avoids Surprises
By documenting terms early and clearly, potential disputes or misunderstandings are minimized. Proper documentation at this stage lays the groundwork for a smoother transaction.
The Conveyancing Process After the Memorandum of Sale
Following the issuance of the memorandum of sale, the key steps typically include:
• Instruction of Solicitors/Conveyancers: Both buyer and seller formally instruct their legal representatives if they haven’t already done so.
• Verification and Checks: Conveyancers begin identity checks to comply with anti-money laundering regulations and start reviewing property documents.
• Property Searches and Surveys: Critical to uncover risks related to planning permissions, boundaries, environmental hazards, and structural issues.
• Contract Drafting and Exchange: The seller’s solicitor drafts the contract, which is sent to the buyer’s solicitor for review and negotiation.
• Exchange of Contracts: Once both parties agree, contracts are signed and exchanged, making the transaction legally binding.
• Completion: The final step where ownership legally passes, funds are transferred, and the buyer receives the keys.
Frequently Asked Questions (FAQs) about the Memorandum of Sale
Q: Who drafts the memorandum of sale?
A: Usually the estate agent handling the sale prepares the memorandum and distributes it to the involved solicitors and buyers.
Q: Is the memorandum of sale legally binding?
A: No, it is an agreement in principle and does not commit parties legally until contracts are exchanged.
Q: How long does conveyancing take after the memorandum of sale?
A: Typically 8-12 weeks depending on search results, contract negotiations, and other factors.
Q: Can either party withdraw after the memorandum is signed?
A: Yes, either buyer or seller can withdraw without legal penalty until exchange of contracts.
Tips to Speed Up the Conveyancing Process After the Memorandum of Sale
• Choose your conveyancer early, even before your offer is accepted, to prepare for a smooth start.
• Have your finances and mortgage approvals in place early.
• Respond promptly to any enquiries or requests from your solicitor.
• Be proactive in providing any requested documents or information.