What is a memorandum of sale?

When you’re buying or selling a property, there’s a fair bit of paperwork to deal with—but one of the key documents early on is the memorandum of sale.

Think of it as the document that gets everyone on the same page. Once a seller accepts an offer from a buyer, it’s important to have written confirmation of exactly what’s being bought and sold. That’s where the memorandum of sale comes in—it lays out the key details of the transaction, helping to avoid confusion or disputes down the line.

By making everything clear from the start, this document helps keep the legal process running smoothly and reduces the chances of any hiccups along the way.

In this guide, we’ll break down when and why a memorandum of sale is issued, who’s responsible for it, what it should include, its legal significance, and what happens next.

How long does it take from memorandum of sale to completion?

There are no set timeframes or deadlines for the completion of sale that are introduced when a memorandum of sale is issued. The length of the process can vary significantly depending on factors such as the property, parties involved and other circumstances.

With a memorandum of sale in place, however, things will start to progress. With the terms of the sale being agreeable to both parties in principle, the conveyancing process can begin in which the buyer’s solicitors and surveyors can begin to check that everything with the property is okay.

Again, the amount of time this takes can vary. Often, it depends on how quickly the solicitors and estate agents involved can handle the process, and the time required for the buyer to secure a mortgage. Equally, if there’s a property chain, that may also impact the timeframes.

Who issues a memorandum of sale?

Usually, the estate agent that’s been employed by the seller to help market and sell the property will draw up a sale memorandum. This happens once the seller has accepted an offer on their home.

Typically, a memorandum of sale will be issued a few days after an offer has been accepted. However, it might take a bit longer if information about the property is missing or needs to clarified, or if information such as solicitor contact details aren’t available right away. 

When it’s ready, the sale memorandum is then sent to the relevant parties, including the conveyancers and solicitors representing the buyer and the seller, who will sign it. However, buyers and sellers themselves are unlikely to see a copy, as it will contain confidential information about the other party, which is data protected.

What’s included in a memorandum of sale?

As a record of the agreed deal between the buyer and seller, a memorandum of sale includes several important details about the proposed sale in a concise document, so that there’s clarity and certainty over the terms and assets.

Typically, this will include:

• The property address
• The land registry number
• The agreed sale price
• Details on how the buyer will fund the purchase
• The names and contact details of:
  • The buyers and sellers
  • Solicitors
  • Conveyancers
  • The estate agent selling the property
• Information about the property, such as whether it’s a freehold or leasehold
• Fixtures and fittings included in the sale
• Expected dates for exchange and completion

While the buyer and seller are unlikely to be able to see a copy of this, it’s important to ensure that these details are thoroughly checked for accuracy by whoever’s handling your purchase.

Is memorandum of sale the same as a contract?

No. A memorandum of sale and a contract are different.

The memorandum of sale is document that outlines the proposed terms of the agreement between the buyer and seller of a property. It serves to establish a mutual understanding of the terms and timelines of the property transaction before the conveyancing process begins. Issued immediately after the acceptance of an offer, it is a document that is used to ensure alignment and provide clarity on the terms of the deal before the legal processes begin.

With a memorandum of sale in place, the conveyancing process in which the necessary checks with the properties such as a survey will be made and the legal documentation prepared. Once this process has been completed, if both the buyer and seller still wish to move forward with the transaction, the a separate set of documents – known as the contracts – will be drafted.

These contacts formalise the terms of the sale and are legally-binding once they are signed.

What happens after the memorandum of sale is issued?

The memorandum of sale is introduced relatively early in the property transaction process, immediately after the seller accepts an offer from a buyer. With a sale memorandum in place, several steps need to happen before the sale of the property reaches completion:

1. Once the memorandum of sale has been distributed, the solicitors and conveyancers will make contact with each other and begin the conveyancing process.
2. During this phase, the buyer may wish to have a survey of the property carried out.
3. The buyer may also need to finalize their funding, such as securing a mortgage.
4. If the buyer and seller are both happy to proceed once the conveyancing process is complete, they will sign the final contracts which are then exchanged. It is at this point that the sale becomes legally binding.
5. Completion then follows, usually one or two weeks after the exchange of contracts, with the remaining balance being paid and the keys being handed over.

Is memorandum of sale legally binding?

No, a memorandum of sale is not legally binding. It is a preliminary contract that acknowledges an offer has been accepted, formalises that mutual understanding between the buyer and seller, and outlines the key terms of the agreement.

With a sale memorandum in place, the buyer is not obligated to buy the property, nor the seller to sell the property. Either may change their mind and pull out without legal repercussions at any point prior to the contracts being exchanged.

Perhaps the buyer requests that a property survey is carried out, which then reveals problems or defects associated with the property. In this case, the buyer may wish to review their offer or pull out of the property purchase. This is allowed, so long as the contracts have not yet been exchanged.

Both parties only become legally bound following the exchange of contracts, which then leads to completion of the sale.