Switching…

Configuring SASL is easy, you just need to provide one configuration file called smtpd.conf which should be created in the directory ‘/usr/lib/sasl2/’. Startup your Terminal and create the smtpd.conf file with the following content or download one I prepared earlier at the bottom of this page:

pwcheck_method: authdaemond
log_level: 3
mech_list: PLAIN LOGIN
authdaemond_path:/usr/local/var/spool/authdaemon/socket

There will be an error when running this as it is configured currently because of permissions set on the authdaemond socket. In the mail.log you would see an error appear that says something like:

SASL authentication failure: cannot connect to Courier
          authdaemond: Permission denied

To prevent this error you need to execute the following command in a Terminal:

sudo chmod o+x /usr/local/var/spool/authdaemon

After that everything will be fine and working as expected.

Resources:
smtpd.conf