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.