Dispositions

How to get a cash buyer to sign a memorandum of contract

To get a cash buyer to sign a memorandum of contract, explain its purpose as a simple, public notice of your equitable interest, protecting his or her position as the ultimate buyer. Emphasize that it's a standard practice that secures the deal without revealing sensitive contract details.

October 28, 2026 · 3 min read

Why a memorandum of contract matters to the buyer and you

A memorandum of contract is a short, recordable document that puts the world on notice that you have an equitable interest in a property. For your cash buyer, it publicly protects his or her eventual interest as the end buyer, ensuring no other transactions can occur that would jeopardize the deal.

It acts as a public lien against the property, preventing the seller from selling to another party or taking on new liens. This added layer of security gives your buyer confidence that the deal will proceed as planned.

Explain the 'what' simply, not the 'how'

When introducing the memorandum, focus on its simple function: it’s a notice that a contract exists for the property. Avoid getting bogged down in legal jargon or over-explaining the nuances of equitable interest or recording processes.

Tell the buyer it's a standard safeguard in real estate to protect everyone involved. Think of it as a flag planted on the property to signal that it's under contract and committed.

Address the buyer's security and commitment

Your cash buyer wants to know his or her investment of time and money is secure. The memorandum provides that security by making your contract public. It shows him or her that you are serious about the deal and have taken steps to prevent any outside interference.

Reassure him or her that signing the memorandum is a routine step that reinforces the integrity of the transaction. It doesn't change the terms of the underlying assignment contract; it just makes it harder for anyone to mess with those terms.

Keep it brief and to the point when presenting

Cash buyers are busy; they appreciate efficiency. Present the memorandum as a quick, necessary formality. Have it prepared in advance with only the essential details: names, property address, and a reference to the underlying agreement.

Do not use it as a moment to renegotiate terms or introduce new complexities. Get it signed, then move forward with the rest of the disposition process.

Record the memorandum quickly after signing

Once the memorandum is signed by both you and the buyer, arrange for its prompt recording with the county recorder’s office. The power of the memorandum comes from its public notice, which only happens once it’s recorded.

The sooner it's recorded, the sooner the property is formally encumbered by your contract, providing maximum protection for all parties involved until closing. Ensure the recording is handled by a reputable title company or attorney.

What if the buyer resists signing?

Some less experienced cash buyers might be hesitant or unfamiliar with the memorandum. If a buyer pushes back, calmly reiterate its protective purpose for him or her, and explain it is a standard practice for investors. This is not legal advice, but you can also mention that your title company will expect it to be recorded to ensure a smooth closing.

If he or she still refuses and it is a requirement for your deal, you may need to reconsider if he or she is the right buyer or if you can proceed without this layer of protection. Sometimes, showing an example of a previously recorded memorandum can help ease his or her concerns.

Questions people ask

Does a memorandum of contract get recorded?

Yes, a memorandum of contract is designed to be recorded with the county recorder's office. This public recording is what provides notice to third parties of your contractual interest in the property.

Is this the same as a purchase agreement?

No, it's not the same. The memorandum is a summary document that refers to the existence of a purchase agreement. It typically doesn't contain all the detailed terms of the full purchase contract, which remains private between the parties.

Why would a cash buyer need to sign this?

The cash buyer signs it to acknowledge the existence of the underlying contract and to protect his or her eventual interest in the property. It prevents the seller from selling the property to someone else or incurring new liens that could jeopardize the deal.

Does this commit the buyer to the deal?

It reinforces the commitment established in the underlying purchase agreement. While the memorandum itself doesn't contain all the terms of commitment, its public recording makes it clear that a contractual agreement exists, making it harder for any party to back out without consequence.