Real Estate Glossary

E

Earnest Money
A sum of money paid in trust by a prospective buyer in favor of the prospective seller to show that the buyer is in "earnest" intent to purchase the property.

Easement
A right, privilege or interest in real property that one individual has in lands belonging to another; a legal right to trespass; right-of-way authorizing access to or over land.

Effective Age
An appraiser's estimate of the physical condition of a building. The actual age of a building may be shorter or longer than its effective age.

Effective Gross Income
Normal annual income including overtime that is regular or guaranteed. The income may be from more than one source. Salary is generally the principal source, but other income may qualify if it is significant and stable.

Elevation
A scale architectural draws showing a particular profile of a structure.

Eminent Domain
A government right to acquire private property for public use by condemnation, and the payment of just compensation.

Encroachment
Unauthorized use of another person's property.

Encumbrance
Unauthorized intrusion of a building or improvement onto another's land. A claim attached to and binding real property.

Endorsement
A writing on a negotiable instrument, such as a check or a note, which assigns interest in such instrument to another party. A notation added to an instrument after execution to change or clarify its contents, such as an endorsement to a title insurance policy.

Equal Credit Opportunity Act (ECOA)
A federal law which prohibits lenders from denying credit to applicants on the basis of a borrower's race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance programs.

Equity
A homeowner's financial interest in a property. Equity is the difference between the fair market value of the property and the amount still owed on its mortgage.

Equity Loan
A loan made, generally as a second mortgage, based on and secured by an owner's equity in real property.

Escrow
The holding of documents and/or funds by a disinterested third party such as a title insurance company, attorney or depository institution pending the settlement of a real estate transaction or mortgage loan, or pending the payment of real estate taxes and/or homeowner's insurance on a parcel of real property.

Escrow Account
The account in which a mortgage servicer holds the borrower's escrow payments prior to paying property expenses.

Escrow Analysis
The periodic examination of escrow accounts to determine if current monthly deposits will provide sufficient funds to pay taxes, insurance, and other bills when due.

Escrow Disbursements
The use of escrow funds to pay real estate taxes, hazard insurance, mortgage insurance, and other property expenses as they become due.

Escrow Payment
The portion of a mortgagor's monthly payment that is held by the servicer to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due. Known as "impounds" or "reserves" in some states.

Estate
The ownership interest of an individual in real property. The sum total of all the real property and personal property owned by an individual at time of death.

Eviction
The lawful expulsion of an occupant from real property.

Exclusive Listing
A written contract that gives a licensed real estate agent the exclusive right to sell a property for a specified time.

Extended Lock
An interest rate lock agreement having a term that is longer than the generally provided 30 or 45-day term, and which typically requires an upfront fee from the borrower. See "interest rate lock".