Memorandum of sale

Memorandum of sale

You’ve spent weeks—perhaps months—prepping your home for the market. You’ve decluttered the spare room, touched up the paintwork in the hallway, and endured a dozen viewings. Then, the call comes in: an offer has been made, and after a bit of back-and-forth, you’ve accepted. In the world of Scottish property, this is the moment the "Memorandum of Sale" (often abbreviated to MoS) enters the frame.

While the term is frequently used across the UK, its implications in Scotland are wrapped in our unique legal framework. It is the bridge between the handshake (the verbal or informal agreement) and the "Missives" (the binding contract). For a Scottish homeowner, understanding this document is the difference between a smooth transition to your next home and a stressful, delayed "Sold" sign.

This guide will walk you through everything you need to know about the Memorandum of Sale in Scotland. We will explore what it contains, why it matters, how it differs from the English system, and the practical steps you need to take once it lands in your inbox.

What is a Memorandum of Sale?

At its simplest, a Memorandum of Sale is a document produced by your estate agent once an offer has been accepted on a property. It is not a contract. Instead, it is a "heads of terms" document that confirms everyone is on the same page.

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Think of it as the official announcement of the deal. It tells the solicitors involved that the marketing phase is over and the legal "conveyancing" phase has begun. Without this document, solicitors are essentially working in the dark, and mortgage lenders will rarely issue a formal offer.

Who produces it?

In the vast majority of cases, the seller’s estate agent is responsible for drafting and distributing the Memorandum of Sale. They will send copies to:

1. The Seller
2. The Buyer
3. The Seller’s Solicitor
4. The Buyer’s Solicitor

The Scottish Context: MoS vs. Missives

One of the most common points of confusion for those moving to Scotland from South of the border is the terminology. In England and Wales, the Memorandum of Sale kicks off a long period of "Subject to Contract" that can last months, with a high risk of "gazumping" (where a seller accepts a higher offer later).

In Scotland, the process is swifter and more robust, but the Memorandum of Sale plays a slightly different role.

The Comparison: Scotland vs. England

In Scotland, because we use a system of formal letters (Missives) between solicitors, the Memorandum of Sale is the administrative trigger that allows those solicitors to start exchanging those letters.

What Information is Included?

A well-drafted Memorandum of Sale should leave no room for ambiguity. If details are missing, it can cause "friction" later in the sale. A standard Scottish MoS will include:

• Property Address: The full postal address of the property being sold.
• Agreed Purchase Price: The final figure agreed upon (which may be significantly higher than the "Offers Over" price).
• The Seller’s Details: Full names and current contact information.
• The Buyer’s Details: Full names and current contact information.
• Solicitor Details: The names, firms, and contact details for the legal professionals representing both sides.
• Conditions of Sale: Any specific inclusions (e.g., "the garden shed is included," or "the designer chandelier is being replaced with a standard fitting").
• Proposed Date of Entry: The target date for the keys to be handed over (completion).
• Home Report Details: Confirmation that the Home Report has been provided and viewed.

For more detailed advice on the final steps, read our guide on Closing the Sale Efficiently in the current market.

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Why the Memorandum of Sale is Critical for Sellers

You might wonder why you need a formal document just to say you've agreed on a price. For a seller, the MoS serves three vital functions:

1. It Formalises the Buyer's Intent

Until the MoS is issued, the buyer is just someone who made a phone call. By providing their solicitor's details for the MoS, they are demonstrating "financial readiness." It filters out the time-wasters from the serious contenders.

2. It Starts the Mortgage Clock

If your buyer requires a mortgage, their lender will usually demand to see the Memorandum of Sale before they finalise the valuation and the formal Mortgage Offer. The sooner the MoS is issued, the sooner the buyer's funding is secured, which reduces the risk of the deal falling through.

3. It Invokes Law Society Guidelines

In Scotland, solicitors are governed by strict ethical guidelines. Once a solicitor is instructed following an MoS, they generally cannot act for a seller who wants to accept a later, higher offer (gazumping) unless the first deal falls through for legitimate reasons. This gives you, the seller, a much higher degree of certainty.

The Timeline: From Offer to Entry

Understanding where the Memorandum of Sale sits in the timeline helps manage expectations. Here is how a typical Scottish property transaction unfolds:

1. The Offer: The buyer’s solicitor submits a formal written offer to your estate agent.
2. Verbal Agreement: You discuss the price and conditions with your agent and agree to accept.
3. Issuing the Memorandum of Sale: Your agent sends the MoS to all parties (Day 1).
4. Qualified Acceptance: Your solicitor sends a formal letter to the buyer’s solicitor accepting the offer, but with "qualifications" (legal tweaks) (Days 2-7).
5. The Missives Phase: Solicitors go back and forth with letters (Missives) negotiating the fine print (Weeks 2-4).
6. Conclusion of Missives: The final letter is signed. The contract is now legally binding. You are now committed to the sale.
7. Conveyancing & Searches: Solicitors check land registries, local authority permissions, and the title deeds (Weeks 4-8).
8. Date of Entry (Settlement): Money is transferred, and keys are handed over (usually Week 8-12).

Potential Costs Involved

While the Memorandum of Sale itself doesn't cost a specific fee (it is usually included in your estate agent’s commission), it triggers several costs you need to be aware of as a Scottish seller.

Legal Fees

Your solicitor will start charging for their time once they receive the MoS and begin drafting the Qualified Acceptance.

• Estimated Cost: £800 - £1,500 + VAT (depending on property value).

Outlays

These are costs your solicitor pays to third parties on your behalf.

• Title Reports: £50 - £100.
• Property Searches: £150 - £200.

LBTT (Land and Buildings Transaction Tax)

While the buyer pays this, as a seller, you need to understand it because it affects your buyer's budget and their ability to close the deal.

Note: If the buyer is purchasing an additional property (buy-to-let or second home), they will also pay the Additional Dwelling Supplement (ADS), currently 6% of the total price.

Common Pitfalls and How to Avoid Them

Even with a Memorandum of Sale in place, things can go wrong. Here is how to protect yourself.

1. Inaccurate Information

If the MoS lists the wrong solicitor or misspells a name, it can cause delays in the anti-money laundering (AML) checks. Solution: Double-check the draft MoS the moment your agent sends it. Ensure your solicitor’s direct email address is correct.

2. The "Subject to Sale" Clause

Sometimes, an MoS is issued even if the buyer hasn't sold their own home yet. This is a "chain." If their sale collapses, your MoS becomes a piece of paper with no value. Solution: Ask your agent to verify the buyer's position. Are they "under offer" or just "on the market"?

3. Lack of a Mortgage Agreement in Principle (AIP)

If a buyer hasn't even spoken to a lender, the MoS is risky. Solution: Instruct your agent to only issue the MoS once they have seen proof of the buyer's AIP or proof of cash funds.

The Role of the Home Report

In Scotland, you cannot legally market your home without a Home Report (with some very specific exceptions like new builds). The Memorandum of Sale will often reference the Home Report.

The buyer’s lender will use the "Single Survey" part of your Home Report to justify the loan. If the Home Report is more than 12 weeks old when the MoS is issued, the buyer’s lender may request a "Refresh."

• Cost for Refresh: Usually between £150 and £350.
• Who pays? Usually the seller, though this can be negotiated.

FAQ: Common Questions about the Memorandum of Sale

Is a Memorandum of Sale legally binding?

No. In Scotland, the agreement only becomes legally binding when the "Missives are concluded." This is a series of formal letters between solicitors. The MoS is merely the document that tells the solicitors to start writing those letters.

Can I pull out after the Memorandum of Sale is issued?

Technically, yes. Until the missives are concluded, you can withdraw your property from the market. However, you may still be liable for any work your solicitor has already performed, and your estate agent may charge a "withdrawal fee" depending on your contract.

How long after the MoS do I get my money?

The MoS is just the start. It typically takes 8 to 12 weeks from the MoS being issued to the "Date of Entry" when the funds are transferred to your solicitor.

What if the buyer wants to change the price after the MoS?

This is known as "gazundering." While it is less common in Scotland than in England, it can happen if a survey reveals a major structural issue not mentioned in the Home Report. You do not have to accept a lower price, but the buyer may then choose to walk away.

Does the Memorandum of Sale mean the house is "Sold"?

Not quite. On portals like Rightmove or Zoopla, the status will usually change to "Under Offer" or "SSTC" (Sold Subject to Conclusion of Missives). It only becomes "Sold" once the keys have changed hands.

Practical Steps for Sellers Now

If you are at the stage where an MoS is about to be issued, here is your checklist:

1. Confirm your Solicitor: Do not wait for an offer to find a solicitor. Have one ready so you can give their details to your agent immediately.
2. Gather your Paperwork: Find your building warrants, FENSA certificates for windows, and any guarantees for damp proofing or timber treatment. Your solicitor will need these immediately after the MoS.
3. Check the Date of Entry: Ensure the date on the MoS is realistic. If you haven't found a new home yet, don't agree to a 4-week completion.
4. Keep Communicating: The period between the MoS and the Conclusion of Missives is the "danger zone." Stay in regular contact with your agent to ensure the buyer is progressing their mortgage application.

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Conclusion

The Memorandum of Sale is a pivotal document in the Scottish property journey. While it lacks the legal weight of the concluded missives, it is the essential catalyst that moves your sale from a "maybe" to a "process."

By understanding that this document is the starting gun for the legal and financial work, you can take proactive steps—like having your solicitor ready and your paperwork in order—to ensure that the transition from "Under Offer" to "Sold" is as fast and stress-free as possible.

In the unique landscape of Scottish property law, being informed is your greatest asset. Now that you know exactly what the Memorandum of Sale entails, you are in a much stronger position to navigate your sale to a successful conclusion.