Earnest Money
A sum of cash paid to a seller by a buyer prior to the closing to show that the buyer is serious about buying the house. The earnest money is deducted from the purchase price at closing and is not an additional cost. Sometimes referred to as a binder deposit.
Back to top

Easement
A right of way giving persons, other than the owner, access to or over a property.
Back to top

Easement by Prescription
The continued use of another person's property for a special purpose that can develop into permanent use if certain conditions are met.
Back to top

Economic Base
The industry within a certain geographic area that provides employment opportunities which are essential to support the community.
Back to top

Economic Rent
Economic Rent refers to the rent a real estate property would fetch when leased.
Back to top

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

Effective Gross Income
Normal annual income, which may include overtime and bonuses, that is regular, consistent and guaranteed. A person's salary is usually the prime source, but other income may qualify if it is significant, documented and stable.
Back to top

Elderly Applicant
As defined in the Equal Credit Opportunity Act, a person 62 or older.
Back to top

Electronic Fund Transfer (EFT) Systems
A variety of systems and technologies for transferring funds electronically rather than by check.
Back to top

Eminent Domain
The right of a government to seize private property for public use upon payment of its fair market value. Eminent domain is the legal basis for condemnation proceedings.
Back to top

Employment Report
Includes the unemployment rate, non-farm payroll, average work week and overtime. The non-farm payroll is probably the most watched number. Increases in these numbers can be an indication of pending "wage inflation".
Back to top

Encroachment
A property improvement or obstruction that physically intrudes upon the property of another.
Back to top

Encumbrance
Anything that affects the title to a property such as a mortgage, judgement, or easement.
Back to top

Endorsements
Additions to a title insurance policy for special coverage such as surveys, environmental and state particular endorsements that are not included in the standard insurance policy. For our comparison purposes, the fees for endorsements are considered to be a third party fee. Some lenders may include this fee in the cost of the title insurance.
Back to top

Endorser
A person who signs ownership interest over to another party.
Back to top

Equal Opportunity Act (ECOA)
The federal regulations that requires lenders to make credit equally available to all without discrimination based on race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance programs.
Back to top

Equity
An owner's financial position in a property. Equity is the difference between the property's value and the amount that is owed on mortgages.
Back to top

Equity REIT
Equity REIT is a REIT that takes the ownership position in a real estate investment. Is the abbreviation for Real Estate Investment Trust. It is a corporation that uses the pooled capital of many investors to purchase and manage income property and mortgage loans. They are usually traded like stocks.
Back to top

Escrow
Funds paid by one party to another to hold until a specific date when the funds are released to a designated individual. Generally, an escrow account refers to the funds a mortgagor pays to the lender along with their monthly principal and interest payments for the payment of real estates taxes and hazard insurance. This is also referred to as impounds. The money is held by the lender to make payments when they are due.

An escrow can also refer to funds that are held by a third party to insure the completion of repairs or improvements that must be completed on the property but that cannot be done prior to closing.
Back to top

Escrow Account
The account that funds are held in by the lender for the payment of real estate taxes and/or homeowner's insurance. Can also refer to the account that funds are held in for the completion of repairs or improvements to a property that cannot be completed prior to closing.
Back to top

Escrow Analysis
A periodic review of escrow accounts to determine if current monthly deposits balances will provide sufficient funds to pay property taxes, hazard insurance and other bills when they come due.
Back to top

Escrow Payment
The portion of a borrower's monthly mortgage payment that is held by the loan servicing company to pay for property taxes, hazard insurance, mortgage insurance and other items as the become due.
Back to top

Estate
The nature and extent of interest that an individual has in real property (degree of ownership). Also, the combined total of all real and personal property owned by an individual at the time of their death.
Back to top

Eviction
The legal expulsion of an occupant from real property. Usually exercised by a lessor against a lessee to recover possession of property.
Back to top

Exam Fee
A fee associated with an inspection by a title company of public records and other documents to determine the chain of ownership of a property. For our comparison purposes, exam fee is considered to be a third party fee. Some lenders may include this fee in the cost of the title insurance.
Back to top

Examination of Title
The report on the title of a property from the public records. Not as thorough as a full title search.
Back to top

Exclusive Listing
A written contract that gives a licensed real estate agent the exclusive right to sell property for a specific time, but reserving the owner's right to sell the property without the payment of a commission.
Back to top

Executor
A person named in a will to administer an estate. Most Courts will appoint an administrator if no executor is named. (The feminine form is executrix)
Back to top

Existing Home Sales
Reports the number of existing homes sold, expressed on an annual basis. Can be combined with New Home Sales to determine the total volume of home sales, a strong indicator of future national mortgage origination volume. Frequency: monthly. Source: National Association of Realtors.
Back to top