Earnest Money

Money deposited by a buyer under the terms of a contract, to be forfeited if the buyer defaults but applied to the purchase price if the sale is closed.

Earnest Money Deposit

A deposit made by the potential home buyer to show that he or she is serious about buying the house. A deposit of money paid by a buyer for real property as evidence of good faith. Can not be given back to the buyer unless he obtains written permission from the seller.

Easement

A right of way giving persons other than the owner access to or over a property. A right, privilege, or interest that one party has to use the land of another. Example: A right of way. A legal right to use another's land for one's benefit or the benefit of one's property (right-of-way). A right to use the land of another for a specific purpose, such as for a right-of-way or utilities; an incorporeal interest in land.

Easement Appurtenant

An easement created for the benfit of a particular parcel of property. There is both a dominant and a servient estate. The easement is annexed to and part of the dominant property.

Easement By Condemnation

An easement created by the government or government agency that has exercised its right under eminent domain.

Easement By Necessity

An easement allowed by law as necessary for the full enjoyment of a parcel of real estate; for example, a right of ingress and egress over a grantor's land.

Easement By Prescription

An easement acquired by continuous, open and hostile use of the property for the period of time prescribed by state law.

Easement In Gross

An easement that benefits a particular individual, not a parcel of property. Involves only a servient estate. A public utility easement is an example. An easement that is not created for the benefit of any land owned by the owner of the easement but that attaches personally to the easement owner. For example, a right granted by Eleanor Franks to Joe Fish to use a portion of her property for the rest of his life would be an easement in gross.

Easy Qualifier Mortgage

This may be referred to as "low doc" or "no doc" loan.

Eaves

The lower projecting edge of a roof over the wall.

Economic Life

The remaining useful life of an improvement or structure; that period during which an improvement will yield a return on the investment. The number of years during which an improvement will add value to the land.

Economic Obsolescence

The loss in value to property due to external causes such as zoning or a deteriorating neighborhood. It is also referred to as social obsolescence.

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

The amount of net income that remains after the deduction from gross income of vacancy and credit lossess.

Egress

Exit; the act or avenue or leaving property.

Emblements

Things that grow on the land require annual planting and cultivation. Growing crops, such as grapes and corn, that are produced annually through labor and industry; also called fructus industriales.

Eminent Domain

The right of a government to take private property for public use upon payment of its fair market value. Eminent domain is the basis for condemnation proceedings. The right of the government and certain others, such as public utilities, to acquire property for public or quasi-public use by condemnation, upon payment of just compensation to the owner. The constitutional or inherent right of a government to take private property for public good upon the payment of just compensation. The right of a government or municipal quasi-public body to acquire property for public use through a court action called condemnation, in which the court decides that the use is a public use and determines the compensation to be paid to the owner.

Employee

Someone who works as a direct employee of an employer and has employee status. The employer is obligated to withhold income taxes and social security taxes from the compensation of employees. See also independent contractor.

Employment Contract

A document evidencing formal employment between employer and employee or between principal and agent. In the real estate business this generally takes the form of a listing agreement or management agreement.

Enabling Acts

State legislation that confers zoning powers on municipal governments.

Encroachment

An improvement that intrudes illegally on another’s property.

Encroachment

The projection of a structure onto the land of an adjoining owner. A structure or natural object that unlawfully extends into another's property. A building--or some portion of it--a wall or fence for instance, that extends beyond the land of the owner and illegally intrudes on some land of an adjoining owner or a street or alley.

Encumbrance

Anything that affects or limits the fee simple title to a property, such as mortgages, leases, easements, or restrictions.
Any claim, interest, or right inproperty possessed by another that may diminish the true owner's rights or value in the estate. Examples include mortgages, easements, or restrictions of any kind. A claim, lien, or charge on property. Anything, such as a mortgage, tax, or judgment lien, an easement, a restriction on the use of the land or an outstanding dower right that may diminish the value or use and enjoyment of a property.

Environmental Impact Report

A report that must be prepared whenever any agency or indvidual considers a project that may have a significant impact on the environment, as directed by the California Environmental Quality Act.

Equal Credit Opportunity Act (ECOA)

Prohibits discrimination amongst lenders. A federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance programs. The federal law that prohibits discrimination in the extension of credit because of race, color, religion, national origin, sex, age or marital status.

Equal Housing Opportunity

Prohibits discrimination in the listing, sale, lease, rental or financing of real property due to race, creed, religon, sex, marital status or handicap. Should apply exactly the same in all real estate.

Equal Protection

The Fourteenth Amendment to the U.S. Constitution and similar provisions in the California Constitution require each citizen to receive equal protection of the laws. There are no minimum standards of protection; all equally situated individuals must simply be treated equally. (The due process clause of the Constitution imposes certain minimum standards of protection.)

Equalization

The raising or lowering of assessed values for tax purposes in a particular county or taxing district to make them equal to assessments in other counties or districts.

Equalization Factor

A factor (number) by which the assessed value of a property is multiplied to arrive at a value for the property that is in line with statewide tax assessments. The ad valorem tax would be based on this adjusted value.

Equitable Lien

See statutory lien

Equitable Right Of Redemption

The right of a defaulted property owner to recover the property prior to its sale by paying the appropriate fees and charges.

Equitable Title

The interest held by a vendee under a contract for deed or an installment contract; the equitable right to obtain absolute ownership to property when legal title is held in another's name.

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 and other liens. The interest or value that on owner has in real property over and above the liens against it. A part of our justice system by which courts seek to supplement the strict terms of the law to fairness under the circumstances, rather than on fixed legal principles or statutes. Ownership in property, determined by calculating the fair market value less the amoutn of liens and encumbrances.The interest or value that an owner has in property over and above any indebtedness.

Equity Build-Up

The increase of the owner's equity due to mortgage pricipal reduction and value appreciation.

Equity Of Redemption

The right to redeem property during the foreclosure period. In California the mortgagor has the right to redeem within 12 months after the foreclosure sale.

Erosion

The wearing away of the surface of the land by the action of wind, water, and glaciers, for example. The gradual wearing away of land by water, wind and general weather conditions; the diminishing of property by the elements.

Escalator Clause

A clause in a contract that provides for the upward or downward adjustment of certain items to cover the specific contingencies set forth. A clause in a promissory note, lease, or other document that provides that upon the passage of a specified time or the happening of a stated event, the interest rate shal increase.

Escheat

The reversion of property to the state when there are no devisees or heirs capable of inheritance. Reversion of property to the state upon the death of an owner who has no heirs able to inherit. The reversion of property to the state or county, as provided by state law, in cases where a decedent dies intestate without heirs capable of inheriting, or when the property is abandoned.

Escrow

An item of value, money, or documents deposited with a third party to be delivered upon the fulfillment of a condition. For example, the earnest money deposit is put into escrow until delivered to the seller when the transaction is closed. The deposit of instruments and funds with a third neutral party with instructions to carry out the provisions of an agreement or contract. A complete or perfect escrow is one in which everything has been deposited to enable carrying out the instructions. The neutral third party (stakeholder) who holds deeds or other documents pursuant to instructions for delivery upon completion or occurrence of certain conditions. The closing of a transaction through a third party called an escrow agent, or escrowee, who receives certain funds and documents to be delivered upon the performance of certain conditions outlined in the escrow instructions.

Escrow Account

Once you close your purchase transaction, you may have an escrow account or impound account with your lender. This means the amount you pay each month includes an amount above what would be required if you were only paying your principal and interest. The extra money is held in your impound account (escrow account) for the payment of items like property taxes and homeowner’s insurance when they come due. The lender pays them with your money instead of you paying them yourself. The trust account established by a broker under the provisions of the license law for the purpose of holding funds on behalf of the broker's principal or some other person until the consummation or termination of a transaction.

Escrow Analysis

Once each year your lender will perform an "escrow analysis" to make sure they are collecting the correct amount of money for the anticipated expenditures.

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 Instructions

A document that sets forth the duties of the escrow agent, as well as the requirements and obligations of the parties, when a transaction is closed through an escrow.

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. The degree, quantity, nature, and extent of the interest that a person has in real property. Ownership interest in real estate. The quality and quantity of rights in property.

Estate (Tenancy) At Sufferance

The tenancy of a lessee who lawfully comes into possession of a landlord's real estate but who continues to occupy the premises improperly after his or her lease rights have expired.

Estate (Tenancy) At Will

An estate that gives the lessee the right to possession until the estate is terminated by either party; the term of this estate is indefinite.

Estate (Tenancy) For Years

An interest for a certain, exact period of time in property leased for a specified consideration.

Estate (Tenancy) From Period To Period

An interest in leased property that continues from period to period, week to week, month to month or year to year.

Estate At Will

The occupation of real property by a tenant for an indefinite period. It may be terminated at will by one or both parties. A leasehold tenancy, which at common law could be terminated by either party at any time, without advance notice. Thirty days' notice are now required to terminate this type of estate in California.

Estate For Life

A freehold estate whose duration is measured by and limited to the life or lives of one or more persons.

Estate For Period To Period

A leasehold tenancy that continues indefinitely for successive periods of time, until terminated by proper notice. When the periods are one month in duration, it is often called a month-to-month tenancy.

Estate For Years

A lease that will expire at a definite time or date. A?leasehold tenancy of a fixed duration, being a definite and ascertainable period of a year or any fraction of multiple thereof. It has a definite beginning and ending date, and hence a known and definite duration.

Estate In Land

The degree, quantity, nature and extent of interest a person has in real property.

Estate Of Inheritance

An estate that may go to the heirs of the deceased. All freehold estates are estates of inheritance, except life estates.

Estate Taxes

Federal taxes on a decedent's real and personal property.

Estop

To ban, stop, or impede.

Estoppel

A doctrine whereby one is forbidden to contradict or deny his or her own previous statement, act, or position. The doctrine that prevents a person from exercising a legal right, because that person previously acted in an inconsistent manner, so that a third person detrimentally relied on the earlier acts. An agency is created this way when an individual knowingly allows another individual to act as their agent without authorizing such acts. Method of creating an agency relationship in which someone states incorrectly that another person is his or her agent, and a third person relies on that representation.

Estoppel Certificate

A document in which a borrower certifies the amount owed on a mortgage loan and the rate of interest.

Et Al

Abbreviation meaning and others (other person).

Et Ux

Abbreviation meaning and wife.

Ethics

A standard of conduct that all members of a given profession owe to the public, clients or patrons, and to other members of that profession. Refers to a branch of philosophhy that deals with moral science and moral principles. It is a debateable subject and can not be legislated. It is based on what each individual feels is good or bad. The system of moral principles and rules that becomes standards for professional conduct.

Ethnic

The seller of a property is not allowed to ask the buyer their ethnic background.

Eviction

The lawful expulsion of an occupant from real property. Dispossession by legal process, as in the termination of a tenant's right to possession through re-entry or other legal proceedings. A legal process to oust a person from possession of real estate.

Evidence

All relevant information, facts, and exhibits admissible in a trial.

Evidence Of Title

Proof of ownership of property; commonly a certificate of title, an abstract of title with lawyer's opinion, title insurance or a Torrens registration certificate.

Ex Parte

By only one party or side. For example, an injunction obtained by evidence presented by only one side, without notice to the other parties.

Examination Of Title

The report on the title of a property from the public records or an abstract of the title.

Exception

(See Reservation.)

Exchange

A reciprocal transfer of properties between two or more parties.

Exchange

A transaction in which all or part of the consideration is the transfer of like-kind property (such as real estate for real estate).

Exclusive Agency

A contract hiring the broker as the exclusive agent for the seller. If anyone, except the seller, finds a buyer, the broker has earned the commission.

Exclusive Agency Listing

A written agreement giving one agent the exclusive right to sell property for a specified period of time, but reserving the right of the owner to sell the property himself or herself without liability for the payment of a commission. A written contract that gives a licensed real estate agent the exclusive right to sell a property for a specified time. A listing contract under which the owner appoints a real estate broker as his or her exclusive agent for a designated period of time to sell the property, on the owner's stated terms, for a commission. The owner reserves the right to sell without paying anyone a commission if he or she sells to a prospect who has not been introduced or claimed by the broker.

Exclusive Right To Sell Agency

A contract hiring the broker as the only person authorized to sell property. If anyone, including the seller, finds a buyer, the broker earns the commissions.

Exclusive Right-To-Sell Listing

A listing contract under which the owner appoints a real estate broker as his or her exclusive agent for a designated period of time, to sell the property on the owner's stated terms, and agrees to pay the broker a commission when the property is sold, whether by the broker, the owner or another broker. A written agreement giving one agent the exclusive right to sell property for a specified period of time. The agent may collect a commission if the property is sold by anyone, including the owner, during the term of the listing agreement.

Exculpatory Clause

A provision in leases and other instruments seeking to relieve one party of liability for his negligence and other acts. In residential leases such clauses are invalid, and in other leases the courts have limited the landlord's ability to escape liability for intentional acts, and for acts of affirmative negligence.

Execute

To complete, make, perform, do or to follow out. To sign a document, intending to make it a binding instrument. The term is also used to indicate the performance of a contract.

Executed Contract

A contract in which all parties have fulfilled their promises and thus performed the contract.

Execution

The signing and delivery of an instrument. Also, a legal order directing an official to enforce a judgment against the property of a debtor.

Execution Lien

A lien arising because of an execution on property. A judgment is not self-executing; however, when a writ of execution has been obtained, the sheriff will levy (seize) property, which creates a lien on the property.

Executor

A person named in a will to administer an estate. The court will appoint an administrator if no executor is named. "Executrix" is the feminine form. A person named by the testator of a will to carry out its provisions as to the disposition of the estate. A personal representative appointed in a will to administer a decedent's estate.

Executory Contract

A contract under which something remains to be done by one or more of the parties.

Expansible House

A home designed for expansion and additions in the future.

Expansion Joint

A fiber strip used to separate units of concrete to prevent cracking due to expansion as a result of temperature changes.

Express Agreement

An oral or written contract in which the parties state the contract's terms and express their intentions in words.

Express Contract

See express agreement

External Depreciation

Reduction in a property's value caused by outside factors (those that are off the property).

Real Estate Dictionary Terms - E