Whether you’re thinking of selling your property, buying a new property, or already in the process of buying and selling in the UK, you might come across the term ‘Memorandum of Sale‘. But what is a Memo of Sale? What does it include? Why it is necessary? And who issues this document?
Let’s find out all the answers in this short post!
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What is a Memorandum of Sale?
A memo of sale is a legal document containing written confirmation showing the details of the property transaction. In simple words, this document records the details of a property sale and provides an overview of the buyer’s intent and the seller’s terms of sale.
This document is not legally required, but is a great source of information for solicitors and mortgage advisors to start with the sale process and to carry out legal processes linked with it.
What Does Memorandum of Sale Include?
Typically, this document contains the following important details of the property sale:
- A full address and agreed price of the property being sold
- HM Land Registry number
- Details (like their phone numbers, current address and email) of the seller, buyer and solicitors representing them
- Details of the property like whether it is leasehold or freehold (if it’s a leasehold, how many years are there on the lease)
- Deposit amount to be paid
- Whether it’s a quick cash property sale or an auction sale (if auction sale information must be given as to the date of exchange)
- Where possible, the mortgage lender and if there is a principal decision in place
- Ownership confirmation before the property listing
- Whether the purchase is made by a company
- All the relevant details of the mortgage advisors participating in the sale
- Details of expected completion and exchange dates
- Details of legal issues that need investigations
- Any special condition in the sale (like cash advance or delayed completion or an option agreement)
- If the vendor is purchasing another property and if so, all the details of the purchase
- Fittings and fixtures involved in the sale
- Other extra detail relevant to the sale
Why Memorandum of Sale is Necessary?
It is an important document as it acts as a confirmation statement between buyer and seller of the property sold or purchased. In addition, it is crucial as based on it, your solicitor or agent will take the property off the market. This is advantageous for the buyer as it provides less or almost no chances of being gazumped.
Moreover, this document encompasses all the relevant details, in a single place, that are required to do a property transaction. So, with this document, you can save a lot of your time whilst selling your property. The memorandum of sale is also necessary to provide relevant information to a third party like solicitors and mortgage lenders helping them to do legal proceedings and so on.
With this document, you can smoothly perform your sale and purchase transactions of the property. However, it is not legally binding and does not serve as complete confirmation. It means that the buyer can withdraw from the sale anytime. Therefore, to be on the safe side, the seller needs to be honest and share all the details transparently from the start. Remember that you don’t need to sign this document.
Who Issues this Document?
Normally, the seller of the property issues this document and it is not legally binding, so anyone can withdraw this memorandum. Moreover, the issuance of this document also depends on the market route you have taken. If you are doing a sale via an estate agent, then they are responsible to draft and issue this document.
On the other hand, if your property is being sold to a cash house buyer, then the company may issue the memorandum on your behalf to make the process easier. At auction sale, the auctioneers are responsible to issue memorandums of sale.
Quick Sum Up
After reading this blog, we hope you have got a basic understanding of what is a memorandum of sale, what does it include, why it is necessary and who issues it. A memo of sale document can make the buying and selling process of a property quicker and efficient by covering all the required details.
Though with comprehensive details, it may seem overwhelming, but the benefits of this document are worth your time and efforts. So, knowing the Memo of Sale is crucial to effectively manage the purchase and sale of a property. Taking professional help from a solicitor – in this regard – will make the process much easier.
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Disclaimer: This blog is written for your general understanding of the above topic.