How important is the Memorandum of Sale when buying a property?

Memorandum of Sale

 

The memorandum of sale is an important document, it confirms the point at which a property sale has been agreed by both the buyer and the seller (vendor). The memorandum of sale should be issued by the estate agent as soon as the property offer is formally agreed.

 

Do you need a Memorandum of Sale and what is it for?

 

As most property sales are agreed verbally over the telephone, the memorandum of sale is vitally important. For a buyer, it is written confirmation by the estate agent who acts on behalf of the vendor (owner of the property) that the sale has been agreed with you.

As mortgage advisors, we need to see the Memorandum of Sale before we can submit your full mortgage application.

As well as being confirmation of the sale, the Memorandum of Sale document also provides mortgage advisors and solicitors with the relevant information that we need to start both the mortgage application and legal process.

Some mortgage lenders often ask to see the sales agreement as part of their request for supporting documentation.

 

What information should the Memorandum of Sale include?

 

The memorandum of sale should include the following information:

  • Name, address, telephone number and email address of the vendor
  • Contact details for the vendor’s solicitor
  • Name, address, telephone number and email address of the buyer and also details of whether they are buying the property with cash or whether they need a mortgage.
  • If the buyer needs a mortgage, their mortgage advisor’s details should be listed.
  • Contact details for the buyer’s solicitor
  • Details of any property chain involved
  • Details of any special conditions or other remarks

 

What does a Memorandum of Sale look like?

 

The memorandum of sale should be no more than one A4 page and it should look similar to this template:

 

ESTATE AGENT LOGO Estate agent address, phone number

MEMORANDUM OF SALE

(Subject to Contract)

ADDRESS OF PROPERTY SOLD

VENDOR INFORMATION PURCHASER INFORMATION

NAME:

RESIDENTIAL ADDRESS / CORRESPONDENCE ADDRESS:

TELEPHONE:

EMAIL:

NAME:

RESIDENTIAL ADDRESS / CORRESPONDENCE ADDRESS:

TELEPHONE:

EMAIL:

Buying with a Mortgage? YES / NO

VENDOR LEGAL CONVEYANCER

NAME:

ADDRESS:

TELEPHONE:

EMAIL:

Mortgage Advisor Name:

Mortgage advisor Company:

TELEPHONE:

EMAIL:

PURCHASER CONVEYANCER

NAME:

ADDRESS:

TELEPHONE:

EMAIL:

SPECIAL CONDITIONS OR REMARKS: SPECIAL CONDITIONS OR REMARKS:

VENDOR CHAIN DETAILS:

Buying another property? YES / NO

Details of onward purchase:

PURCHASER CHAIN DETAILS:

 

When should I receive the Memorandum of Sale?

 

Your estate agent should post or email you this document as soon as the sale is agreed verbally. We recommend asking for the memorandum of sale to be emailed right away to avoid delay, your estate agent should have no objection to this.

Some estate agents may deliberately delay this process whilst trying to convince you to use their in-house services. This is not good practice and you are well within your rights to refuse their in-house services.

 

Do I need to use the estate agent recommended solicitor?

 
No, you do not need to use the estate agents solicitor. Some agents might try to convince you to use their providers by saying that it will be quicker, but this is rarely the case.
 

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Is the Memorandum of Sale legally binding?

 

No. The memorandum of sale should always be written ‘Subject to Contract’.

What is the meaning or purpose of the Memorandum of Sale then? The memorandum of sale is essentially just a written notification of the intention to form a contract between both buyer and seller, but it is not a legally binding contract in itself.

In UK property law, a property sale is binding once you have exchanged contracts. However, the vendor’s (seller’s) legal conveyancer or solicitor will only draft the contract of sale on receipt of the memorandum of sale.

The Memorandum of Sale is, therefore, an important document to get the legal process underway.

 

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Ben - Author
 
Author: Ben, Glow Mortgage Advisor (CeMAP, BSc Hons)

First Published: 4th December 2017