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Earnest money – A sum of money or other consideration given by a prospective purchaser as a deposit or partial payment as evidence of good faith in conjunction with an offer to purchase real property rights which if accepted will become part of the down payment.

Easement – A limited right, privilege or interest to a specific use, privilege, benefit or control purpose which one party has been granted in the land of another party and which runs with the land and is not a personal right of an individual.

Easement appurtenant – An easement which is annexed to the ownership of one parcel of land that allows one party the use of his or her neighbor’s land and which when is the title is transferred to another party runs with the land. Also know as an appurtenant easement.

Easement by condemnation – An easement created by the government or a governmental agency through the exercise of its rights under eminent domain.

Easement by necessity – An easement granted by a court because of the necessity to give the right of ingress and egress over a grantor’s land so as to permit the full enjoyment of a real estate parcel.

Easement by prescription – An easement acquired by continuous, open, notorious and hostile use of a property for a period of time prescribed by law.

Easement in gross – A personal easement which does not run with the land and therefore does not get transferred by a conveyance of title.

Easy money – A financial situation that occurs when lenders have an abundance of funds available for lending and loan terms are favorable to borrowers.

Eaves – The lowest part of a roof that protrudes or hangs over the exterior walls.

Economic base – The major economic support of a community.

Economic base analysis – A technique for analyzing the major economic supports of a community which is used to help predict population, income or other variables having an affect on real estate value or land use.

Economic goods – The goods that have scarcity and utility that provide desired services but which are not sufficiently abundant to be free.

Economic life – The period of time that is usually stated in years from construction or acquisition during which an improvement will add value to the land or will be depreciated for tax purposes. See also Remaining economic life.

Economic obsolescence – A loss in value due to factors outside the property lines of the subject property that adversely affect the usability and value of the subject property or its actual or potential income and which is always considered incurable. Also known as Social obsolencence and Environmental obsolencence.

Economic rent – The reasonable amount of rental income that a property could expect to command if it were available for rent at the time of its valuation.

Economics – The allocation of scarce resources.

Economy – The efficient use of resources with an eye to productivity.

Effective age – The number of years of age that is indicated from the condition of the improvement rather than from its actual chronological age.

Effective date of value – The specific day to which the conclusion of value applies.

Effective demand – The desire for property backed up by the actual ability to buy it.

Effective gross income – The gross income of a property less an allowance for vacancy and bad debts.

Effective gross revenue – A method to determine income, less an allowance for vacancy, possible contingencies and typically collection losses but before any deductions for operating expenses have been taken.

Effective interest rate – A statement as a percentage of interest that is actually being paid by a borrower for the use of the money as distinct from the nominal or named interest rate.

Egress – A way out, an outlet or an exit. See Ingress.

Ejectment – A legal action brought to regain possession of property and to remove a party who is not legally in possession.

Elasticity – The ability of the real estate supply to respond to price increases over a short period of time.

Elevation – A drawing showing the exterior sides of a building incluing the type and placement of windows and other openings such as doors, dormers, vents and skylights as the building will appear when completed.

Elizabethan or half timber style – An English-style, 2 or 2 ½ story house, often with part of the second story overhanging the first with less stone work and less fort like than a Tudor and where stone and stucco walls with half timbers are quite common.

Ellwood technique – An appraisal technique used to estimate the present value of mortgaged income property where the appraiser determines and discounts to a present value the annual cash flow to the owner and the expected resale proceeds which are added together to obtain the equity value, which gets added to the mortgage balance to offer a property value estimate. The late L. W. Ellwood created capitalization rate tables that speed up this process.

Emancipate – A release by a court that sets a child free from his or her parental controls which grants legal capacity or competency.

Emancipated minor – An under age person who has been legally set free by a court from his or her parental control or supervision

Embezzlement – An illegal act involving a fraudulent conversion of another’s personal property by the party to whom it had been entrusted with the intention of depriving the owner of it and which usually involves a violation of fiduciary duties.

Emblements – The annual crops that require care which are being grown on a property and are usually considered to be a possession of the tenant.

Eminent domain – The right of the government found in the 5th Amendment to the Constitution to take privately owned property for necessary public use under condemnation proceedings upon payment of just compensation. Also see Condemnation.

Employee – A person who works as the direct control of an employer holding employee status and for whom the employer must withhold income and Social Security taxes from his or her compensation. See Independent contractor.

Employment contract – A document serving as evidence of a formal employment arrangement between an employer and an employee or between a principal and an agent which in real estate normally shows up as a management or a agreement listing.

Empty nesters – A married couple whose children have established separate households and who frequently are seeking to reduce their amount of housing space.

Enabling act – A state statute that provides a legal basis for zoning codes or other local governmental actions.

Encapsulation – A method of controlling an environmentally hazardous substance contamination by sealing it off.

Encroachment – An unlawful intrusion onto the adjacent property of another of real property improvements such as a patio, a wall or a fence that overlaps across the property line and which reduces the value of the property intruded upon.

Encumber – The voluntarily or involuntarily placing of a lien or a charge on land or property thus limiting its use.

Encumbrance – Any right or claim upon land held by a party other than the property owner which affects or limits the fee simple title or the value of the property and which are divided into two types: monetary liens like mortgages, deeds of trust, mechanics’ liens, local taxes, assessments, judgments, attachments, etc. and non-monetary like deed restrictions.

Endorsement – 1. The act of signing one’s name. 2. An addition to or modification of an insurance policy which expands or changes coverage of the policy.

Energy efficient – An indication of the existence in buildings of extra insulation, weatherproofing and or special features and equipment designed to reduce the cost of energy for heating, cooling and heating water.

Enforceable – A contract or agreement under which ither party can be compelled to perform by a court of law or equity.

English architecture – A design of large stone houses having Elizabethan or Tudor characteristics or of other English styles which frequently have slate shingles on gabled roofs, mullioned casement windows and wainscoted interiors. Authentic Elizabethan houses had exposed timbers between which there was plaster or brick morter as the structural frame although today the half-timbering is purely decorative.

Entrepreneur – A person who envisions, organizes, operates, manages and assumes responsibility for a business.

Environmental Assessment, EA – A study of land which considers everything from endangered species to existing hazardous waste to historical significance which is made to determine if there are any unique environmental attributes and to see if an Environmental Impact Report, EIR is needed or not.

Environmental Impact Report, EIR – A study of how a development will effect the balance of nature of its surroundings.

Environmental obsolencence – See Economic obsolescence.

Environmental Protection Agency, EPA – A U.S. governmental agency that was created to enforce federal pollution reduction laws and to implement various pollution prevention programs.

Equal Credit Opportunity Act, ECOA – A federal law that prohibits discrimination in the extension of credit due to race, color, religion, national origin, sex, age or marital status.

Equality of economic opportunity – A state of being in which all people have equal chances for the same jobs at equal pay, regard-less of race, creed, color or sex.

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 comparable counties or districts. See Equalization factor.

Equalization factor – A numeric factor 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 and on which the ad valorem tax is based.

Equilibrium – The static point somewhere around the middle of the life cycle of a property where the peak of value is reached.

Equitable conversion – A legal principle in some states which, under a sales contract, buyers and sellers are treated as though the closing had already taken place in that the seller is in possession but has a legal obligation to continue to take care of the property for the buyer. See Equitable title.

Equitable lien – A lien granted by the court as a result of a legal action taken rather than as a result of statute. See Statutory lien.

Equitable mortgage – A legal document that although it is not technically a mortgage still encumbers a property due to the existence of some legal error.

Equitable right of redemption – The right of a property owner who is in default to recover his or her property prior to its final sale by paying all appropriate fees and charges.

Equitable title – A future right that exists in equity to obtain absolute ownership of property that a court will take notice of even though the title is held in the name of another party.

Equity – 1. A branch of remedial justice based on fairness, rather than strict interpretation of statutes by and through which relief is afforded to suitors in courts of equity. 2. The interest or value which an owner has in real property over and above any liens against it. 3. Any ownership investment in stocks, bond, real estate, etc. as opposed to investing as a lender in bonds, mortgages, etc.

Equity build-up – The increase of owner’s equity in property due to the reduction of the mortgage principal and appreciation in value.

Equity funds – The capital invested to gain a residual ownership interest in property.

Equity interest – The amount of the value or total combined worth of a property minus any debts outstanding against it which may be established from a cash down payment, the property’s debt amortization or any property value appreciation.

Equity justice – The value of the property owner’s interest exclusive of the encumbrances on the property.

Equity of redemption – The interest that a debtor has in real property prior to foreclosure. See Right of redemption.

Equity participation – A mortgage transaction in which the lender in addition to receiving a fixed rate of interest on the loan acquires an interest in the borrower’s real property and shares in the profits derived from the income or upon the sale of the property.

Equity participation loan – See Co-venture loan.

Equity sharing – A contractual arrangement between an owner-occupant and a nonoccupying investor to pool money to buy a home.

Erosion – The gradual wearing away of the ground surface by the act of water, wind or glacial ice.

Errors and Omissions insurance, E&O – A protection for an insured party against the liability for professional mistakes in business dealings or for malpractice.

Escalation – The right reserved by a lender to increase the amount of the payments and/or interest upon the happening of a certain event(s).

Escalator clause – A contractual clause that provides for the upward or downward adjustment of certain items, often rent, which is used to cover specific contingencies such as increased taxes or maintenance and which is usually tied to a named index or event.

Escalator mortgage – A loan that allows for changes in the interest rate which are normally linked to specific money market or other identifiable rates after a specific period of time.

Escape clause – A contractual provision that permits one or more of the parties to cancel all or part of the contract if certain events or situations do or do not materialize such as a mortgage loan approval.

Escheat – An intestate condition where property reverts back to the state when an owner dies leaving no legal heirs, devisees or claimants capable of inheriting it or no heirs can be found.

Escrow – An independent neutral third party which acts as a disclosed dual agent for a buyer and a seller or for a borrower and a lender to carry out the written instructions of both parties and to disburse documents and funds once the specified conditions have been met and to record all necessary deeds and/or other recordable instruments.

Escrow account – See Trust account.

Escrow agent – A neutral third party who holds something of value such as funds from a grantee or a deed from a grantor in trust for another or others until all of the conditions of the contract have been met.

Escrow contract – An arrangement that is entered into when earnest money is deposited into an escrow account between a buyer, seller and escrow holder that sets forth the rights and responsibilities of each party.

Escrow instructions – A document seting forth the duties, requirements and obligations of all parties including the escrow agent involved in a transaction being closed by escrow.

Estate – 1. The degree, quantity, nature and duration of interest, share, right, equity of which riches or fortune may consist and which a person holds in real property such as a life estate, etc. 2. A large house with substantial grounds surrounding it which gives the impression that it belongs to a wealthy person.

Estate at sufferance – An estate arising out of a tenant wrongfully holding over after the expiration of the term where the landlord has a choice of evicting the trespassing tenant or continuing the tenancy under conditions similar to the tenant’s previous terms. Also known as a Tenancy at sufferance.

Estate at will – The occupation of land and its improvements by a tenant for an indefinite or unspecified period which can be terminated by either party with or without notice depending on the state. Also known as a Tenancy at will.

Estate by the entireties – See Tenancy by the entireties

Estate for life – See Life estate.

Estate for years – A leasehold interest in land created by a lease contract for a definite, specified and limited period of time of possession which may be for one year or less and for which notice to terminate is not required.

Estate from period to period –A leasehold interest in land where the rent is set at a certain amount per period which could be a day, a week, a month or a year and where there is no definite or established termination date and for which notice to terminate is required. Also called a Periodic tenancy.

Estate in expectancy – A classification of estates when possession will be at some future time as to times of enjoyment.

Estate in Fee – The holding of a freehold estate or the most complete form of real property ownership interest possible and one which can be passed by descent or by will after the owners death. Also known as Estate of inheritance or Fee simple estate.

Estate in land – The degree, quantity, nature and extent of interest a party holds in real property

Estate in possession – A classification of estates when possession is present as to the time of enjoyment.

Estate in remainder – A future interest given by the grantor to a third party to take effect upon the termination of a life estate.

Estate in reversion – The remainder of a life estate held by the grantor where possession will begin when a lesser estate granted by himself or herself to another ends.

Estate in severalty – A classification of estates based on the number of owners in which case there is only one number and where the estate is owned by a single party.

Estate of inheritance – All freehold estates except for life estates and are estates of inheritance which permits the estate to descend to one’s heirs. See Estate in fee or Fee simple estate.

Estate taxes – The federal taxes due or paid on a decedent’s real and personal property.

Estimate – 1. A preliminary opinion of value. 2. To set a value or appraise.

Estimated remaining life – The period of time in years that it is believed it will take for an improvement to be reduced to being of no value.

Estoppel – A legal theory under which a person is stopped or barred from asserting or denying a fact because of the person’s previous actions or words.

Estoppel certificate – A certificate showing the unpaid principal and interest of a mortgage which is used if the principal or interest notes are not produced or if the seller asserts that the amount due under the mortgage is different than shown on record.

Et al – And others.

Et ux – Abbreviation for et uxor which means and wife.

Ethics – An area of moral study concerned with acceptable standards of right and wrong behavior, fairness, justness and ideals which addresses in writing the duties that members of a profession owe to their clients, their associates and to the general public.

Evaluation – A study, which does not determine its present value, of a property’s potential uses such as to feasibility or to marketability which is often to aid in making an investment decision.

Eviction – The act of dispossessing or depriving a party of the possession of land following a court judgment. See Actual eviction and Constructive eviction.

Eviction notice – A notice to a tenant to vacate the premises due to the nonpayment of rent or another violation of of the lease agreement covenants.

Evidence – Anything which tends to prove or to disprove a matter in question or to influence the belief respecting something.

Evidence of title – The proof of property ownership such as a certificate of title, an abstract of title with lawyer’s opinion, title insurance, or a Torrens registration certificate.

Ex officio – The power to act arising out of holding of a particular office.

Ex parte – A one sided action or an act done in behalf of only one person.

Exception – A matter which is excluded from coverage in a title insurance policy such as a reservation, an objection or a contradiction that affects title to a particular parcel of real property.

Excess depreciation – The amount of depreciation being applied beyond the normal rate allowed.

Excess rent – The monetary difference between contract rent and economic rent.

Exchange – A means of trading equities in two or more real properties which are handled as a single transaction and with a single closing.

Exchange brokerage – A real estate activity that brings two or more parties involved in trading real properties together in a real estate transaction.

Exclusion – 1. Any matter that is not included in the coverage of an insurance policy. 2. Any matter affecting title to real property that is not included in the title insurance policy coverage.

Exclusionary zoning – An illegal zoning law that would be used to exclude low- and moderate-income housing in an area.

Exclusive agency listing – A listing agreement where a seller employs one broker to assist the owner to sell the property and as part of that employment appoint him or her to be the exclusive anget of the owner in the transaction and agrees to pay that broker if a buyer is secured under the terms of the contract by the broker or any other broker but not pay a fee if a sale is negotiated directly by the owner without the services of any broker.

Exclusive listing – A general term applied to a listed property where the owner(s) is represented by a broker who is acting exclusively in an agency capacity for the owner under an exclusive right to sell or exclusive agency contract.

Exclusive right to sell listing – A listing agreement where a seller employs a broker and agrees to pay a commission if a buyer is secured under the terms of the contract and if it is sold by anyone including the owner during the term of the agreement and simultaneously also employs and authorizes the broker to act as the sole or exclusive agent in an agency capacity relationship for the owner for the entire transaction process.

Exculpatory clause – A clause often included in leases that clears or relieves the landlord of liability for personal injury to tenants as well as for property damages.

Execute – 1. The signing of a legal document such as a deed or will so as to formalize it and make it binding. 2. The performing or completing of a contract, following it out to the end, making it happen or doing it. 3. A legal order directing an official to enforce a judgment against the property of a debtor.

Executed contract – A contract in which all parties have fulfilled their promises and whose terms have been performed and completed.

Execution – 1. A court order directing a sheriff, constable, marshal or other court-appointed party to enforce a money judgment against a debtor’s property by selling the property if necessary to satisfy the judgment.2. The completion of an act or process such as an escrow

Execution of judgment – The formal action of completing a final judgment decree of a court which usually involves selling property.

Executor – A man named in a will and affirmed by the probate court who has agreed in accordance with the will to carry out its provisions as to the disposition of the deceased person’s estate. See executrix, a woman so appointed. See testator, one who makes the will.

Executor’s deed – A deed given by an executor of an estate.

Executory contract – A contract in which something remains to be done, or executed, by one or more of the parties.

Executrix – A woman named in a will to carry out the provisions of the will as to the disposition of the deceased person’s estate. See Executor.

Exempt – To release, discharge, waive, relieve from liability.

Exemption – In taxation, usually something on which tax does not need to be paid.

Existing mortgage – The debt contract which is to be assumed by the purchaser in which the seller of real estate is the mortgagor.

Exoneration – The right which a party guaranteeing performance or payment has upon paying the principal debtor’s obligation to look back to the principal debtor for reimbursement.

Expansible house – A home created for future additions.

Expansion joint – A flexible metal, rubber, bituminous fiber strip used to separate sections of concrete to prevent cracking caused by expansion due to temperature changes.

Expenses – The items that are a financial burden or outlay which appear on a closing statement in connection with a real estate sale.

Express agency – An agency relationship based on clearly-presented words in a formal oral or written agreement between the parties. See Implied agency.

Express agreement – See Express contract and opposite Implied contract.

Express contract– An oral or written agreement in which the parties have clearly stated their intentions and terms in words. See opposite Implied contract.

Expropriation – The act or process whereby private property or the rights therein is acquired for public use by a sovereignty or any entity vested with the necessary legal authority typically such as under eminent domain.

Extended coverage – A fire insurance policy having an additional endorsement which extends the coverage to include losses caused by windstorm, hail, explosion, riot, aircraft, vehicle and smoke damage.

Extended policy – A casualty, liability, title or other insurance policy with broader coverage than normal.

Extension – An agreement between two or more parties to lengthen the the time period identified in a contract such as when a tenant is unable to vacate at the termination of the lease.

Extensive margin – The extra benefits derived from adding increasing amounts of land to a productive state.

External depreciation – The reduction in a value of a property that are caused by factors outside the property lines and which normally require governmental action to cure.

External obsolescence – The depreciation caused by issues outside the property lines such as environmental, social or economic factors and which are always considered to be incurable.

Extinguishment – The destruction or cancellation of a right, power, contract or estate.

Extra use – The use or activity level in excess of what would be considered to be a real or normal level.

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Categories: Real Estate Words Glossary