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EARNEST MONEY The monetary advance by a purchaser of part of the purchase price as evidence of good faith. The earnest money is used to bind the parties to the contract of sale. See also DEPOSIT.

EASEMENT A right to use the property of another created by grant, reservation, agreement, prescription or necessary implication. It is either for the benefit of land "appurtenant", such as the right to cross A to get to B, or "in gross", such as a public utility easement.

EASEMENT BY NECESSITY The right of an owner to cross over another's property for a special necessary purpose.

EASEMENT BY PRESCRIPTION Continued use of another's property for a special purpose can ripen into a permanent use if conditions are met.

ECONOMIC BASE Industry within a geographic market area that provides employment opportunities that are essential to support the community.

ECONOMIC DEPRECIATION Loss of value from all causes outside the property itself. This reduction in a property's value can be due to external circumstances such as legislation or changes in nearby property use.

ECOMONIC FEASIBILITY A project's feasibility in terms of costs and revenue, with excess revenues establishing the degree of feasibility.

ECONOMIC LIFE that remaining period for which real estate improvements are expected to generate more income than operating expenses cost.

ECONOMIC OBSOLESCENCE Loss of value from all causes outside the property itself. This reduction in a property's value can be due to external circumstances such as legislation or changes in nearby property use.

ECONOMIC RENT Calculations or analysis to determine market rental alue of a property at any given time, even though the actual rent may be different.

EFFECTIVE AGE The age of a property based on the amount of wear and tear it has sustained. Contrast with actual age.

EFFECTIVE GROSS INCOME For income-producing property, potential gross income, less a vacancy and collection

EFFECTIVE RATE The true rate of return considering all relevant financing expenses.

EFFECTIVE RENT The rental rate actually achieved by the landlord after deducting the value of concessions from the base rental rate paid by a tenant, usually expressed as an average rate of the term of the lease.

EFFICIENCY FACTOR The number resulting from dividing the Usable Area by the Gross Building Area in an office building, providing a benchmark measurement for that building's use as an office building.

EFFICIENCY RATIO The proportion of a building's area that is leasable space.

EFFICIENCY UNIT OR APARTMENT A small dwelling unit, often consisting of a single room, within a multifamily structure. In most cases, kitchen and bath facilities are not complete.

EGRESS Access from a land parcel to a public road or other means of exit.

EJECTMENT Action to regain possession of real property, when there is no lease.

ELLWOOD TECHNIQUE In the appraisal of mortgaged income property, a technique used to estimate the present value of the property. The appraiser determines and discounts to a present value the annual cash flow to the equity owner and the expected resale proceeds. Those amounts are added together to derive the equity value, then added to the mortgage balance to offer a property value estimate. The late L. W. Ellwood provided capitalization rate tables that accelerate the process.

EMBLEMENT A growing crop. Annual crops are generally considered personal property

EMINENT DOMAIN A right of the government or a public utility to acquire private property for necessary public use by condemnation in return for just compensation. See also CONDEMNATION.

EMPTY NESTERS A couple whose children have established separate households; important segment of the housing market, since empty nesters often seek to reduce the amount of housing space they occupy. Thus empty nesters are one source of demand for smaller housing units.

ENCROACHMENT Generally, a structure which extends impermissibly over a property line, easement boundary or building setback line.

ENCUMBRANCE Any right to, or interest in, real property tht may exist in one other than the owner, but which will not prevent the transfer of fee title. A claim, lien, charge or liability attached to and binding real property.

END LOAN Same as permanent mortgage.

ENDORSEMENT (1) The act of signing one's name, as the payee, on the back of a check or note, with or without further qualification; the signature itself. (2) Offering support or credibility to a statement.

ENERGY EFFICIENT As applied to buildings, generally indicating the existence of extra insulation, weatherproofing, and/or special features and equipment designed to reduce the cost of energy for heating, co671ing and hot water.

ENERGY TAX CREDITS A reduction in income tax, generally based on the cost of installing insulation and other energy-saving devices. Note: At the federal level, energy tax credits generally expired before 1987 and were not renewed by the 1986 Tax Act.

ENTITY The legal form under which property is owned.

ENTREPRENEUR An individual who generates business activity. A businessman or businesswoman. Often associated with one who takes business risks.

ENVIRONMENTAL IMPACT REPORT A report generally prepared by an independent company dealing with probable environmental effect of a development on the surrounding area. Such reports are required for many federally supported developments under the National Environmental Policy Act of 1969.

ENVIRONMENTAL PROTECTION AGENCY (EPA) An agency of the U.S. government established to enforce federal pollution abatement laws and to implement various pollution prevention programs. EQUAL CREDIT OPPORTUNITY ACT a federal law, enacted in 1974, to discourage discrimination by lenders on the basis of sex or marital status. Amended in 1976 to prohibit discrimination on the basis of age, race, color, religion, national origin, or receipt of public assistance.

EQUALIZATION BOARD A government agency that determines the fairness of taxes levied against properties.

EQUILIBRIUM POINT The price at which the quantity supplied equals the quantity demanded.

EQUITABLE CONVERSION A legal doctrine in some states in which, under a contract of sale, buyers and sellers are treated as though the closing had taken place in that the seller in possession has an obligation to take care of the property.

EQUITABLE TITLE The interest held by one who has agreed to purchase but has not yet closed the transaction.

EQUITY The value of one's interest in a property, consisting of its fair market value less any outstanding debt or other encumbrances.

EQUITY BUILDUP The gradual increase in a mortgagor's equity in a property caused by amortization of loan principal.

EQUITY DIVIDEND The annual cash flow that an equity investor receives.

EQUITY KICKER Also called a participation loan. Under this kind of loan - often used by non-bank lenders with start-up businesses--the lender get not only interest payments and principal repaid, but the right to buy equity (part ownership in the company) as well. Equity participation is generally required for riskier deals or in return for lower rates.

EQUITY OF REDEMPTION Not the same as the redemption period after a foreclosure sale, which is a right established by statute. Properly, the right to pay off mortgage lien in default by payment of the principal, interest and cost due.

EQUITY PARTICIPATION Same as participation mortgage.

EQUITY YIELD RATE The rate of return on the equity portion of an investment, taking into account periodic cash flow and the proceeds from resale. Considers the timing and amounts of cash flow after annual debt service, but not income taxes.

EROSION The gradual wearing away of land through processes of nature, as by streams and winds.

ERRORS AND OMISSIONS INSURANCE Liability protection against professional malpractice, mistakes in business dealings by insured, etc.

ESCALATION CLAUSE A clause in a lease providing for increased rent at a future time. May be accomplished by several means such as (1) Fixed increase -- A provision that calls for a definite, periodic rental increase; (2) Cost of living -- A clause that ties the rent to a government cost of living index, with periodic adjustments as the index changes; or (3) Direct expense -- Rent adjustments based on changes in expenses paid by the landlord, such as tax increases, increased maintenance costs, etc.

ESCAPE CLAUSE A provision in a contract that allows one or more of the parties to cancel all or part of the contract if certain events or situations do or do not happen.

ESCHEAT The reversion of property to the state in the event that the owner dies without leaving a will and has no legal heirs.

ESCROW AGREEMENT A written agreement usually made between a buyer, seller and escrow agent. The escrow agreement sets forth the basic obligations of the parties, describes the objects deposited in escrow, and instructs the escrow agent concerning the disposition of the objects deposited.

ESCROW ACCOUNT Same as trust account

ESCROW AGENT Any person engaged in the business of receiving escrows for deposit or delivery.

ESCROW CLOSING Ten-n meaning the same as closing, especially in states where deeds of trust are used instead of mortgages.

ESTATE The degree, nature, and extent of interest that a person has in real property.

ESTATE AT SUFFERANCE The wrongful occupancy of property by a tenant after the lease has expired.

ESTATE AT WILL The occupation of real estate by a tenant for an indefinite Period, terminable by one or both parties at will.

ESTATE FOR LIFE An interest in Property that terminates upon the death of a specified person.

ESTATE FOR YEARS An interest in land allowing Possession for a specified and limited time.

ESTATE IN REVERSION An estate left by the grantor for himself or herself, to begin after the termination of some particular estate granted by him or her.

ESTATE TAX A tax based on the value of property left by the deceased. Since 1987, the estate and gift tax laws exempt approximately $600,000 of property.

ESTOPPEL A doctrine of law that stops one from later denying facts, which that person once acknowledged, were true and others accepted on good faith.

ESTOPPEL CERTIFICATE A statement concerning the status of an agreement and the performance of obligations under the agreement relied upon by a third party, including a prospective lender or purchaser. In the context of a lease, a statement by a tenant identifying that the ease is in effect and certifying that no rent has been prepaid and that there is no known outstanding defaults by the landlord (except those specified).

ESTOVERS The legally supported right to take necessities from property. Contrast with waste.

ET AL Abbreviation of the Latin et alii "and others.'

ET CON Abbreviation of the Latin et conjunx. Legal term signifying "and husband."

ET UX Abbreviation of the Latin et axor, which means "and wife."

EVALUATION A study of potential property uses, but not to determine its present value.

EVICTION A legal proceeding by a lessor (landlord) to recover possession of property.

EVICTION, ACTUAL Exists where one is removed from the property, either by force or by process of law.

EVICTION, CONSTRUCTIVE Exists when, through the fault of the landlord, physical conditions of the property render it unfit for the purpose for which it was leased.

EVICTION, PARTIAL Exists where the possessor of the property, such as a tenant, is deprived of a portion thereof.

EVIDENCE OF TITLE Documents, such as deeds, that demonstrate ownership.

EXAMINATION OF TITLE Research of the title to a piece of real estate; less thorough than a title search, usually concentrates on recent records.

EXCESS ACCELERATED DEPRECIATION The accumulated difference between accelerated depreciation claimed for tax purposes and what straight-line depreciation would have been. Generally, excess accelerated depreciation is recaptured (taxed) as ordinary income upon a sale, instead of receiving more favorable capital gains treatment.

EXCESS RENT When the rent of an existing lease exceeds the rental rate on comparable existing space. Should the lease expire or the tenant break the lease, the new rate will probably be at market rates.

EXCHANGE Under Section 1031 of the Internal Revenue Code, likekind property used in a trade or business or held as an investment can be exchanged tax-free.

EXCLUSIVE LISTING A written agreement between a real estate broker and a building owner in which the owner promises to pay a fee or commission to the broker if specified real property is sold or leased during a stated period. The broker may or may not be the cause of the sale or lease.

EXCLUSIVE RIGHT TO SELL LISTING Employment contract giving the broker the right to collect commission if the property is sold by anyone, including the owner, during the term of the agreement.

EXCULPATORY CLAUSE A provision in a mortgage allowing the borrower to surrender the property to the lender without personal liability for the loan.

EXECUTE To sign a contract.

EXECUTED CONTRACT A contract whose terms have been completely fulfilled.

EXECUTOR A person named in a will to carry out its provisions for the disposition of the estate.

EXECUTORY CONTRACT A contract under which one or more parties has not yet performed.

EXECUTRIX A woman who Performs the duties of an executor.

EXEMPTION An amount provided by law that reduces taxable income or taxable value.

EXPENSE RATIO A comparison of the operating expenses to potential gross income. This ratio can be compared over time and with that of other properties to determine the relative operating efficiency of the property considered.

EXPENSE STOP Provision in a lease establishing the maximum level of operating expense(s) to be paid by the landlord. Expenses beyond this level are to be reimbursed by the tenant. May be applied to specific expenses only (e.g., property taxes or insurance).

EXPOSURE (MARKET) The advertising, whether free or paid, of property that is for sale.

EXTENDED COVERAGE Insurance that covers specific incidences normally excluded from standard insurance policies.

EXTENSION An agreement between 2 parties to extend the time period specified in a contract.