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Glossary of Terms - E

Earnest Money Deposit:

The deposit money given to the seller by the buyer at the time the offer is made as a sign of the buyer’s good faith to purchase the property.  If the sale is completed, the earnest money deposit is applied as part of the down payment on the property.  If the sale does not go through, the earnest money deposit may be forfeited or lost depending on the language used in the agreement.

Easement:

A right, privilege or interest limited to a specific purpose which one party has in the land of another party.

Eminent Domain:

The right of a government to acquire privately owned property for public purposes under condemnation proceedings upon payment of its reasonable fair market value. 

Employer-Assisted Housing:

A program in which companies assist their employees in purchasing homes by providing assistance with the down payment, closing costs or monthly payments.

Encroachment:

An obstruction, building or part of a building that intrudes beyond a legal boundary onto neighboring private or public land, or a building extending beyond the building line or into an easement.

Encumbrance:

A legal right or interest in land that affects a good and clear title and diminishes the land’s value.  An encumbrance can take many forms, such as zoning ordinances, easement rights, claims, mortgages, liens, charges, pending legal actions, unpaid taxes or restrictive covenants.

Endorsement:

An addition to or modification of a title insurance policy which expands or changes the coverage of the policy, fulfilling specific requirements of the insured party.

Equal Credit Opportunity Act (ECOA):

A federal law that requires lenders to make credit equally available without regard to the applicant’s race, color, religion, national origin, age, sex or marital status; the fact that all or part of the applicant’s income is derived from a public assistance program; or the fact that the applicant has in good faith exercised any right under the Consumer Credit Protection Act.

Equity:

The interest or value of the property minus the amount of any liens attached to the property.

Escalation:

The right reserved by the lender to increase the amount of the payments and/or interest upon the happening of a specified event.

Escheat:

The reversion of property to the state when an owner dies leaving no legal heirs, devisees or claimants.

Escrow:

Funds paid by one party to another party (the escrow agent) to hold until the occurrence of a specified event, after which the funds are released to a designated individual.  In mortgage transactions, an escrow account usually refers to the funds a mortgagor pays the lender at the time of the periodic mortgage payments.  The money is held in a trust fund, provided by the lender for the buyer.  Such funds should be adequate to cover yearly anticipated expenditures for mortgage insurance premiums, taxes, hazard insurance premiums and special assessments.

Escrow Account:

An account that a mortgage servicer establishes on behalf of a borrower to pay taxes, insurance premiums and other charges when they are due.  This is also referred to as an “impound” or “reserve” account.

Escrow Agent:

A neutral third party holding funds or something of value in trust for another party.

Escrow Analysis:

The accounting that a mortgage servicer performs to determine the appropriate balances for the escrow account, compute the borrower’s monthly escrow payments and determine whether any shortages, surpluses or deficiencies exist in the account.

Exception:

A provision in a title insurance binder or policy that excludes liability for a specific title defect or an outstanding lien or encumbrance.

Exclusive Agency Agreement:

An brokerage relationship agreement employing a broker as the sole agent for the buyer or seller of real property under the terms of which the broker is entitled to a commission if the property is bought or sold through any other broker, but not if the purchase or sale is negotiated by the owner without the services of a real estate licensee.

Exclusive Right to Sell Agreement:

A listing agreement employing a broker to act as agent for the seller of real property under the terms of which the broker is entitled to a commission if the property is sold during the duration of the listing through another broker or by the owner without the services of a real estate licensee.

Expired Listing:

A property listing that has expired per the terms of the listing agreement.