Real Estate Glossary

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earnest money deposit
A deposit made by the potential home buyer to show that he or she is serious about
buying the house.

easement
A right of way giving persons other than the owner access to or over a property.

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.

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.

eminent domain
The right of a government to take private property for public use upon payment of its
fair market value. Eminent domain is the basis for condemnation proceedings.

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.

encroachment
An improvement that intrudes illegally on another’s property.

encumbrance
Anything that affects or limits the fee simple title to a property, such as mortgages,
leases, easements, or restrictions.

endorser
A person who signs ownership interest over to another party. Contrast with co-maker.

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.

equity
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.

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.

escrow account
The account in which a mortgage servicer holds the borrower’s escrow payments
prior to paying property expenses.

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.

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.

escrow disbursements
The use of escrow funds to pay real estate taxes, hazard insurance, mortgage insurance,
and other property expenses as they become due.

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.

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.

eviction
The lawful expulsion of an occupant from real property.

examination of title
The report on the title of a property from the public records or an abstract of the title.

exclusive listing
A written contract that gives a licensed real estate agent the exclusive right to sell a
property for a specified time, but reserving the owner’s right to sell the property
alone without the payment of a commission.

executor
A person named in a will to administer an estate. The court will appoint an administrator
if no executor is named. "Executrix" is the feminine form.