Real Estate Terms E-G
EARNEST MONEY DEPOSIT
A cash deposit made to a home seller to secure an offer to buy the property. This amount is often forfeited if the buyer decides to withdraw his offer.
EASEMENT
The right of a non-owner of property to exert control over a portion or all of the property. For example, power companies often own an easement over residential properties for access to their power lines.
EAVE
The part of the roof that extends beyond the exterior wall.
ECONOMIC DEPRECIATION
The decline in property value caused by external forces, such as neighborhood blight or adverse development.
ECONOMIC LIFE
The amount of time which any income-producing property is able to provide benefits to its owner.
EFFECTIVE AGE
The subjective, estimated age of a property based on its condition, rather than the actual time since it was built. Excessive wear and tear can cause a property’s effective age to be greater than its actual age.
EMINENT DOMAIN
The legal process whereby a government can take ownership of a piece of property in order to convert it to public use. Often, the property owner is paid fair-market value for the property.
ENCROACHMENT
A building or other improvement on one property which invades another property or restricts its usage.
ENCUMBRANCE
A claim against a property. Examples are mortgages, liens and easements.
ENERGY EFFICIENCY RATIO
An efficiency rating system for air conditioning units that corresponds to the number of BTU’s output per watt of electricity used.
EQUAL CREDIT OPPORTUNITY ACT (ECOA)
U.S. federal law requiring that lenders afford people equal chance of getting credit without discrimination based on race, religion, age, sex etc
EQUITY
The difference between the fair market value of a property and that amount an owner owes on any mortgages or loans secured by the property.
EQUITY BUILDUP
The natural increase in the amount of equity an owner has in a property, accumulated through market appreciation and debt repayment.
ERRORS AND OMISSIONS INSURANCE
An insurance policy taken out by appraisers to cover their liability for any mistakes made during the appraisal process.
ESCROW
An amount retained by a third party in a trust to meet a future obligation. Often used in the payment of annual taxes or insurance for real property.
ESCROW ACCOUNT
An account setup by a mortgage servicing company to hold funds with which to pay expenses such as homeowners insurance and property taxes. An extra amount is paid with regular principal and interest payments that go into the escrow account each month.
ESCROW ANALYSIS
An analysis performed by the lender usually once each year to see that the amount of money going into the escrow account each month is correct for the forecasted expenses.
ESCROW DISBURSEMENTS
The payout of funds from an escrow account to pay property expenses such as taxes and insurance.
ESTATE
The total of all property and assets owned by an individual.
EXAMINATION OF TITLE
The report on the title of a property from the public records or an abstract of the title.
EXCLUSIVE LISTING
An agreement between the owner of a property and a real estate agent giving the agent exclusive right to sell the property.
EXECUTOR
The person named in a will to administer the estate.
FACADE
The front exposure of any building. Often used to describe an artificial or false front which is not consistent with the construction of the rest of the building.
FAIR CREDIT REPORTING ACT
A federal law regulating the way credit agencies disclose consumer credit reports and the remedies available to consumers for disputing and correcting mistakes on their credit history.
FAIR MARKET VALUE
The price at which two unrelated parties, under no duress, are willing to transact business.
FANNIE MAE
A private, shareholder-owned company that works to make sure mortgage money is available for people to purchase homes. Created by Congress in 1938, Fannie Mae is the nation’s largest source of financing for home mortgages.
FASCIA
The boards that enclose the eaves.
FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC)
The U.S. Government agency created in 1933 which maintains the stability of and public confidence in the nation’s financial system by insuring deposits and promoting safe and sound banking practices.
FEDERAL HOUSING ADMINISTRATION (FHA)
A sub-agency of the U.S. Department of Housing and Urban Development created in the 1930′s to facilitate the purchase of homes by low-income, first-time home buyers. It currently provides federally-subsidized mortgage insurance for private lenders.
FEE APPRAISER
A certified, professional appraiser who forms an opinion of the fair market value of property and receives a set fee in exchange.
FEE SIMPLE
A complete, unencumbered ownership right in a piece of property.
FEE SIMPLE ESTATE
A form or ownership, or holding title to real estate. It is the most complete form of title, having an unconditional and unlimited interest of perpetual duration.
FHA MORTGAGE
A mortgage that is insured by the Federal Housing Administration (FHA).
FINAL VALUE ESTIMATE
The opinion of value of a piece of property resulting from an appraisal following the USPAP guidelines.
FIRST MORTGAGE
The primary loan or mortgage secured by a piece of property.
FIXED-RATE MORTGAGE (FRM)
A mortgage which has a fixed rate of interest over the life of the loan.
FIXTURE
Any piece of personal property which becomes permanently affixed to a piece of real property.
FLASHING
The metal used around the base of roof mounted equipment, or at the junction of angles used to prevent leaking.
FLOOD INSURANCE
Supplemental insurance which covers a home owner for any loss due to water damage from a flood. Often required by lenders for homes located in FEMA-designated flood zones.
FLOOR PLAN
The representation of a building which shows the basic outline of the structure, as well as detailed information about the positioning of rooms, hallways, doors, stairs and other features. Often includes detailed information about other fixtures and amenities.
FLUE
The furnace exhaust pipe, usually going through the roof.
FLUSH VALVE
The valve between the toilet bowl and the tank.
FOOTING
The partially buried support for a vertical structural member such as a post.
FORECLOSURE
The process whereby a lender can claim the property used by a borrower to secure a mortgage and sell the property to meet the obligations of the loan.
FORFEITURE
The loss of property or money due to the failure to meet the obligations of a mortgage or loan secured by that property.
FOUNDATION
The solid structural element upon which a structure is built.
FRONTAGE
The segment of a property that runs along a point of access, such as a street or water front.
FUNCTIONAL OBSOLESCENCE
A decrease in the value of property due to a feature or lack thereof which renders the property undesirable. Functional obsolescence can also occur when the surrounding area changes, rendering the property unusable for its originally intended purpose.
GABLE ROOF
A steeply angled, triangular roof.
GALVANIZED PIPE
Iron pipe with a galvanized (zinc) coating.
GAMBREL ROOF
A ”barn-like” roof, where the upper portion of the roof is less-steeply angled than the lower part.
GENERAL LIEN
A broad-based claim against several properties owned by a defaulting party.
GEORGIAN
A classic, English-style hose characterized by simple rectangular shape and multiple stories.
GFI
Ground Fault Interrupter. A type of circuit breaker required in areas where water is present.
GINNIE MAE
A wholly owned corporation created in 1968 within the U.S. Department of Housing and Urban Development to serve low-to moderate-income homebuyers.
GIRDER
A main supporting beam.
GOVERNMENT MORTGAGE
Any mortgage insured by a government agency, such as the FHA or VA.
GRADE
The slope of land around a building. Also ground level.
GRANTEE
Any person who is given ownership of a piece of property.
GRANTOR
Any person who gives away ownership of a piece of property.
GROSS AREA
The sum total of all floor space, including areas such as stairways and closet space. Often measured based on external wall lengths.
GROUTING
Material used around ceramic tile.
GUTTER
The trough around the edge of the roof that catches and diverts rain.