Real Estate Glossary "E"

earnest money - A deposit given by the potential buyer of real estate after a purchase contract is signed to demonstrate the buyer's good-faith intention to pur­chase the property. The money is held by a third party (usually the seller's broker) until closing.

easement - The right to use another's land.

easement by necessity - An easement right granted by law when there is no access to a person's land.

easement by prescription - Acquiring an easement right by using the property without the owner's consent for the period of time stated by law.

easement in gross - An easement right given to a person or corporation to enter someone's land for a specific purpose.

economic obsolescence - Loss of value caused by vari­ables external to the property. May result from eco­nomic, social or environmental forces such as zoning changes, etc. One of the three types of depreciation calculated in the cost approach to estimating value. The property owner has little or no control over these forces; therefore, this type of depreciation is always considered incurable.

effective gross income - Used in the income approach to estimating value. Effective gross income is found by subtracting an allowance for vacancies and uncollected rent from potential gross income.

emblements - Annual crops on a property that are raised by the owner.

eminent domain - The government power to take private land for the public good. Compensation must be given to the owner of the property.

employee - A working relationship between a broker and his or her sales agents in which the broker has control over how agents perform their duties. The broker can withhold for taxes and Social Security and offer benefits such as pensions, health insur­ance and profit sharing.

enabling legislation - Laws passed by some states giving local governments the authority to establish local laws.

encroachment - Illegal physical intrusion on another's land.

encumbrance - A charge, claim or liability on the property.

endorsement - A rider added to an insurance policy that changes the coverage.

Equal Credit Opportunity Act - Protects borrowers from discrimination when applying for loans. A lender can deny a borrower credit based only on valid business reasons.

equalizer - Adjusts property assessments so that they are equitable throughout a state.

equitable redemption - A borrower's right to redeem property before a foreclosure sale.

equity - A property's value minus any loans against it.

erosion - The gradual loss of land through natural causes.

errors and omissions insurance - A type of coverage that protects brokers from loss due to errors, mistakes and negligence.

escheat - The government power to acquire land from owners who die without a will and leave no heirs.

escrow - Placing something (e.g., money, documents or property) with a third party to be delivered to a designated person when certain conditions, such as the closing of a transaction, are fulfilled.

escrow account - An account maintained with a lender to hold money to pay real estate taxes and insurance. Also used by brokers to hold buyers' earnest money that comes into brokers' possession during real estate transactions.

escrow closing - A closing procedure in which an appointed agent handles all of the closing details rather than having them handled in a face-to-face meeting of buyer and seller.

estate for years - A leasehold estate that continues for a definite period of time. This is the most common type of leasehold estate and usually requires no notice to terminate.

estate in land - The degree, extent, quantity and nature of interest a person has in real property.

eviction - The process of removing a tenant from the premises if a lease agreement is breached. Implemented by filing a suit for possession after giving sufficient notice to the tenant. The removal of a tenant by the landlord because the tenant breached a condition of the lease.

evidence of title - Proof of ownership of property. Usu­ally a certificate of title, an abstract of title with lawyer's opinion, title insurance or a Torrens registration certificate.

exclusive agency listing - A type of listing in which the seller hires a single broker. If the seller sells the property himself or herself, however, a commission is not owed the broker.

exclusive-right-to-sell listing - A type of listing in which the seller hires a single broker. In this type of list­ing a commission is owed the broker no matter who sells the property.

executed contract - A contract in which the parties have performed all of the provisions.

executor - A male named in a will as the person to oversee the administration of a will's provisions.

executrix - A female named in a will as the person to oversee the administration of a will's provisions.

expressed agency - An agency created by words (either oral or written).

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