Real Estate Glossary

Earnest Money Agreement - Formal, written agreement to purchase real estate; includes documentation of receipt of an earnest money deposit. Sometimes used interchangeably by real estate licensees with such terms as "sale agreement," "purchase agreement," "purchase and sale agreement," and "real estate sale agreement." See also, offer.

Earnest Money Deposit - Sum of money given by a buyer as a good-faith gesture of the buyer's sincerity in offering to purchase a seller's real estate. This gesture also serves to give an indication of the buyer's financial ability to complete the transaction.

Easement - Irrevocable right of use in another's land, usually for a specific purpose; confers fewer rights than ownership. To be enforceable, easements must be in writing.

Effective Age - Estimate, in years, of the physical condition of a building; actual age may be shorter or longer.

Effective Gross Income - Normal annual income, including overtime that is regular or guaranteed. The income may be from more than one source, though salary and wages are most common. Other income may qualify if it is significant and stable.

Electrical Permit - Written authorization from a city or county to permanently install an electrical appliance or wiring, or to alter or renovate existing installations. All municipalities in Oregon require permits for electrical work. The fee for an electrical permit is usually considerably less than that for a building permit, and is generally based on the size or type of structure being serviced and/or the number of appliances installed and/or the amperage of the meter box that services the building. See also, permit.

Eminent Domain - Right of a government to take private property without consent of the owner when, theoretically, the use is for public benefit, and legally sufficient compensation is paid. Courts, including the U.S. Supreme Court, recently have ruled that the doctrine of eminent domain also allows a private entity or corporation to take real property from a private property owner, even when the benefit to the public is arguable, and the greater benefit is likely to go to the private entity or corporation. See also, condemnation.

Encroachment - Building or improvement that intrudes illegally onto the property of another.

Encumbrance - Anything affecting or limiting the fee simple title to real property, such as a deed of trust, an easement, a lien, a lease, a judgment, a deed restriction, etc.

Endorser - Person who signs ownership interest over to another party.

Equal Credit Opportunity Act (ECOA) - Federal law requiring lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status or source of income.

Equity - Property owner's net financial stake in a property; difference between fair market value and the amount owed for any liens or obligations against the property.

Escalated Lease - Lease, usually of a long-term nature, allowing for increases in rent tied to some specific cost factor, such as a landlord's costs, or an economic index like the cost-of-living index or consumer price index. More commonly used for commercial properties.

Escrow - Facilitation of a sale through the actions of a neutral, third-party intermediary, which completes the transaction only upon the fulfillment of certain conditions by the parties to the transaction.

Escrow Account - (1) Account in which proceeds are held by a third party to be used to later pay various charges or fees on behalf of a buyer or seller in a transaction. (2) Loosely used, especially by mortgage servicers, to refer to any account in which are held sums for the payment of certain charges that regularly accrue to a homeowner, such as property taxes and hazard insurance premiums. See also, impound account.

Escrow Analysis - Periodic examination of an escrow account, or impound account, to determine if current monthly deposits appear sufficient to pay obligations (such as taxes and insurance) when due.

Escrow Collection - Money collected by a mortgage servicer and set aside in an escrow account, or impound account, to pay certain obligations of a borrower, such as property taxes, mortgage insurance, and hazard insurance.

Escrow Disbursement - (1) Disbursement of funds from any escrow account. (2) Payment of funds from a mortgage servicer to pay property taxes, insurance and certain other expenses as they come due. See also, impound account.

Escrow Payment - Portion of a borrower's monthly mortgage payment that is held by the servicer to pay taxes, hazard insurance, and certain other payments as they come due. Also known as "impounds" or "reserves."

Estate - (1) Ownership interest in real property. (2) The sum total of all the property, both real and personal, owned by an individual at the time of death. (3) Individually owned piece of land containing a residence, usually with substantial grounds, especially one that is large and maintained by great wealth.

Estate in Severalty - Ownership of real property by oneself; not sharing title with another.

Eviction - Lawful expulsion of an occupant from real property, as for failure to pay rent, etc.

Examination of Title - Research conducted from public records regarding the title of a property; also, an "abstract of title."

Exclusive Agency Listing - Written contract hiring a licensed real estate firm as the sole and exclusive firm to represent an owner in the marketing of a specific property; however, reserves the right to the owner to obtain a buyer on his own and avoid paying a commission. Most often used by discount brokerages and firms that specialize in representing "for sale by owner" sellers. See also, exclusive right to sell listing and open listing.

Exclusive Right-to-Sell Listing - Written contract giving a licensed real estate firm the sole and exclusive right to market and sell a property during a specified period of time. No other firm can market the property, and the owner must pay the firm's commission even if the owner finds a buyer on his own and sells the property himself. Most commonly used type of real estate listing contract; provides the most protection to a firm's compensation and, thus, the greatest incentive for a firm to expend as much money as is practical to effectively market a property. See also, exclusive agency listing and open listing.

Executor - Person named in a will to administer an estate, including disposing of assets and disbursing funds. A probate court appoints an administrator if no executor is named. "Executrix" is the feminine form. Also called a personal representative.

Express Contract - Legal agreement formed by the clear and definite words, whether written or spoken, of the parties to the agreement.