You must know the word memorandum of sale when selling or buying a property. Some individuals must have come across the word but need help understanding it. Whether you are looking to sell your property or buy a new house, remember that this is considered a critical document you might encounter. The Document is needed for the sale to go through quickly. Note that the property sale may only be complete with a memorandum of sale. The term may seem complex. However, this article will help you understand everything that the Document entails. Keep reading and learn more.
Definition of a Memorandum
A Memorandum of sale implies a valid document that records the details regarding the sales of the property. The Document records that there has been an agreement between the buyer and the seller on the sale of a particular property. Keep in mind that the Memorandum of Sale is composed of as much crucial information as possible. These include:
- The location of the property
- The price of the property.
- The contacts and the name of both buyer and seller.
- Critical information about the property, including whether it is a leasehold or a freehold.
- The land registry details
- Contact details of the realtor who is representing the buyer and the seller
The memorandum of sale is considered a vital document since it acts as a hard copy or written evidence that there has been an agreement. Most significantly, the Document records the amount the buyer will pay. It is considered a contract even though it is not lawfully binding.
Who is supposed to Issue the Memorandum of Sale?
Note that the real estate realtor should issue the memorandum of sale. It is required to be completed within a couple of days. However, it can take longer when some crucial parts of information are missing. Additionally, it is recommended that both property buyer and seller have all documents ready in advance.
When is the Document supposed to be issued?
The memorandum of sale must be drafted immediately after the offer is made and agreed upon. The Document will then be circulated typically through email but sometimes by post. Being that the Document is not validly binding, as stated earlier, remember that changes can still be made when there are further negotiations.
Moreover, remember that a memorandum of sale does not have a set timeline to be issued after acceptance of the offer. It can take a couple of days or weeks. This will be based on how fast the relevant information can be attained. However, during this time, the seller should have all the critical details regarding the property.
Things that Memorandum of Sale May Encounter
In some circumstances, once the memorandum of sale has been issued, it may experience issues related to the property chain. You may find that the purchasers and the sellers’ transaction depends on another property sale. For instance, when the sale is falling apart, perhaps due to a change of mind on the sale of the property, then the rest of the chain might be interfered with
For a successful Memorandum of sale, there should be a well-calculated time frame. When it takes longer to complete a specific sale, the higher the chances that the seller or buyer may attempt to renegotiate the property’s price. Some may even change their minds about the sale entirely. With this informative guide, you will be able to understand the significance of a memorandum of sale in property buying or selling.