Real Estate Glossary

This list is provided for reference only. Each state has it's own real estate laws, terms and regulations for Realtors. In Arizona, your Realtor and Title Company handle most real estate transaction activities that involve attorneys in many other states. However, you have the right to seek the advice of an attorney or other professional counsel in any real estate transaction.

Earnest Money - A deposit made by the buyer as evidence of good faith in offering to purchase real estate and to secure performance of the contract. Earnest money is typically held by a title company, in an escrow account, during the period between acceptance of the contract and the closing. If the sale goes through, the earnest money is usually applied against the downpayment. If the sale does not go through, the earnest money will be forfeited or lost unless the agreement of sale - expressly provides that it is refundable.

Earnest Money Contract - See Agreement of Sale - .

Easement - The right to use the land of another for a specific purpose, such as a right of way for utilities.

Economic Obsolescence - Loss of value of real property due to external forces or events; e.g., a sewer plant is built next door to the subject property. Also see Functional Obsolescence - .

Effective Interest Rate - The cost of credit on a yearly basis expressed as a percentage. Includes up-front costs paid to obtain the loan, and is, therefore, usually a higher amount than the interest rate stipulated in the mortgage note. Useful in comparing loan programs with different rates and points.

Emblements - Annual crops produced by cultivation. They are deemed to be personal property.

Eminent Domain - The right of government to take private property for public use, through court action known as condemnation - .

Encroachment - A fixture, or structure, such as a wall or fence, which invades a portion of a property belonging to another.

Encumbrance - A cloud against clear, free title to the property which does not prevent conveyance, such as unpaid taxes, easements, deed restrictions, mortgage loans, etc.

Endorsement - Writing one's name, either with or without additional words, on a negotiable instrument, or on a paper attached to it.

Equal Credit Opportunity Act - The 1974 federal law (Title VII of the Consumer Credit Protection Act) which requires fairness and impartiality without discrimination on the basis of race, color, religion, national origin, sex or marital status, or receipt of income from public assistance programs in the extension of credit, and good faith exercises of any right under the Consumer Credit Protection Act (e.g. the creditor must state reasons for denial of credit).

Equal Treatment/Different Impact - It is possible to be guilty of discrimination even by treating two individuals the same. If the results of the treatment are discriminatory, or tend to exclude or otherwise harm members of a minority group, or have discriminatory impact, they are against the law. For example, an apartment house which rents only to doctors and lawyers, where there are few, if any, minority doctors or lawyers in the area, may be a violation of the Fair Housing Laws - .

Equity - The difference between the market value of the property and the homeowners mortgage debt.

Escalator Clause - The clause in a contract permitting adjustments of the payments.

Escheat - The reversion of property to the state in the event the owner thereof dies without leaving a will ( intestate - ) and has no heirs to whom the property may pass by lawful descent - .

Escrow - A trust arrangement by which one or more parties deposit things of value with an authorized escrow agent in accordance with the terms of a real estate agreement.

Escrow Account - A third party account that holds money safely while a sale is in progress.

Escrow Payment - That portion of a mortgagor's monthly payment held in trust by the lender to pay for taxes mortgage insurance , hazard insurance, lease payments, and other items as they become due, also know as "impounds" in some states.

Escrow Reimbursement - In an assumption - or wrap - loan transaction, the buyer reimburses the seller for the current balance of his escrow (or impounded) funds.

Estate at Will - Possession of property at the discretion of the owner.

Estate for Years - Tenant has rights in real property for a designated number of years.

Estimate of Value - An appraisal; the appraised value.

Estimated Closing Costs Statement - The statement which lists the financial settlement between buyer and seller and the costs each must pay. A separate statement for buyer and seller is sometimes prepared.

Estoppel - An impediment to a law of action, whereby one is forbidden to contradict or deny one's own previous statement or act.

Et Ux - Abbreviation for "et uxor", meaning "and wife".

Exception - As used in the conveyance of real estate, an exception is the exclusion of some part of the property conveyed, with title of that excepted part remaining with the grantor. For example, in most subdivision developments, mineral rights are not conveyed to the purchaser of a lot, but remain the property of the developer. Also see Reservation - .

Exclusive Agency - The practice of representing either the buyer or the seller in a transaction. Owes Fiduciary Duties to the party he represents.

Exclusive Buyer Agency - The practice of representing only buyers and never sellers in a transaction.

Exclusive Buyers Broker - (Exclusive Buyers Agent) The practice of representing only buyers and never sellers in a transaction. The company never lists a seller's property and thus never has a seller as a client. Agents never accept subagency that is offered by a seller's agent. An Exclusive Buyer's Broker has Fiduciary Duties - to the Buyer.

Exclusive Right to Sell - A Listing Agreement - which gives the listing agent the right to sell the property for a specified time, with the right to collect a commission if the property is sold by anyone, including the owner, during the listing period. Also see Exclusive Agency - .

Exclusive Seller Agency - The practice of representing only sellers and never buyers in a transaction.

Executor/Executrix - A person named in a will to carry out its terms and administer the estate. Also see Administrator/Administratrix - .