Glossary of commonly used terms and phrases

E

Early Occupancy - When the buyer is allowed to take possession of the property before the sale is completed.
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Earnest Money - The deposit money given to the seller or his agent by the potential buyer upon the signing of the agreement of sale to show that he is serious about buying the house. If the sale goes through, the earnest money is applied against the down payment. If the sale does not go through, the earnest money will be forfeited or lost unless the binder or offer to purchase expressly provides that it is refundable.
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Easement - A right, such as a right of way, afforded a person or entity to make limited use of another's real property.
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Easement of Necessity - An easement granted by a court that states an easement is absolutely necessary for the use and enjoyment of the land. Commonly given to landlocked parcels.
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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.
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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.
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Egress - A term concerning a right to come and go across the land of another. The term is usually “ingress and egress.”
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Eighty-Ten-Ten Loan (80/10/10) - See 'combination loan'.
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Eleemosynary Corporation - Created for charitable purposes that allow tax advantages although they operate the same as a profit-making corporation. They are called nonprofit corporations.
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Eminent Domain - The right of the government to appropriate private property for public use, usually with compensation to the owner.
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Employer-Assisted Housing - A special Fannie Mae housing initiative that offers several different ways for employers to work with local lenders to develop plans to assist their employees in purchasing homes.
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Encroachment - Any improvement such as a building, wall, fence, or other fixture which overlaps onto an adjoining property.
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Encumbrance - A legal right or interest in land that affects a good or clear title, and diminishes the land's value.
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Endorsement - Any change or addition to a title insurance policy that affects coverage of the policy as per specific requirements of the insured.
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Endorser - A person who signs ownership interest over to another party. Contrast with co-maker.
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Engineering Report - A report created by an architect or engineer describing the current physical condition of the property and its major building systems. Also known as a "structural report."
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Entitlements - A right to certain benefits specified by contract or law.
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Environmental Site Assessment - A detailed study of the environmental condition of the property and surroundings conducted in accordance with ASTM standard E 1527 or E1528 (Phase I or Transaction Screen Process) Also known as 'ESA'
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Environmental Transaction Screen Report - The report prepared in compliance with the American Society for Testing Materials (ASTM) standards to identify recognized environmental conditions of a property (i.e., the presence, or likely presence, of any hazardous substances on the property).
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Equal Credit Opportunity Act (ECOA) - 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.
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Equitable Conversion - A legal term regarding a land contract which treats the buyer’s interest as a real property interest, even though the seller holds legal title.
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Equitable Mortgage - A lien against real property, which is enforceable in a court of equity but does not legally constitute a mortgage. Also, a deed given as security for a debt will be considered a mortgage rather than a transfer of title. Also known as a constructive mortgage.
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Equity -
1. 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
2. The actual cash value of property after all claims against the property have been paid.
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Equity Capital - Money invested by owners who receive a portion of the profits.
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Equity Line of Credit - A deed of trust is recorded against the borrower’s property for a predetermined maximum loan amount and the borrower can borrow up to the amount of the loan amount as needed. Usually interest only for a period of 5 to 10 years and then the loan becomes a fixed mortgage and no more equity can be borrowed. Payments are then principal and interest until payoff.
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Equity Loan - A loan based on the borrower's equity in his or her home. Also, an account held by the lender into which a homeowner pays money for taxes and insurance.
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Escape Clause - A provision in a contract that allows for the cancellation of all or part of the contract.
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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 deposit by a borrower with the lender of funds to pay taxes and insurance premiums when they become due, or the deposit of funds or documents with an attorney or escrow agent to be disbursed upon the closing of a sale of real estate.
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Escrow Account - The account in which a mortgage servicer holds the borrower’s escrow payments prior to paying property expenses.
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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.
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Escrow Collections - Funds collected by the servicer and set aside in an escrow account to pay the borrower’s property taxes, mortgage insurance, and hazard insurance.
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Escrow Disbursements - The use of escrow funds to pay real estate taxes, hazard insurance, mortgage insurance, and other property expenses as they become due.
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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.
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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.
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Eviction - The lawful expulsion of an occupant from real property.
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Examination of Title - The report on the title of a property from the public records or an abstract of the title.
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Exception - In a title insurance policy, a provision that excludes liability for a specified title defect or outstanding encumbrance.
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Exclusive Listing - A contract that gives a licensed real estate agent the exclusive right to sell a property for a set period of time.
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Executor - An individual appointed in a will to administer an estate.
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Exit Fees - On some transactions, a lender will charge fees upon the repayment of the loan. They can be a penalty for early loan repayment or may be additional compensation for the lender over and above the interest cost.
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Expert Testimony - The testimony that is given by a person with special training or knowledge in a particular subject and is therefore considered an “expert.”
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Exposure - When a property is for sale or lease, the amount of notice or exposure the property gets through advertising, multiple listing groups, or other means.
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