Oct 21 2009
Real Estate Terminology (E)
EARNEST MONEY DEPOSIT:
A sum of money paid by a potential purchaser as proof of her intention to complete the purchase transaction. Held in trust, usually but the Listing Agent, and credited to Purchaser off purchase price. May be forfeited if Purchaser fails to complete transaction.
ENCUMBRANCE:
Any right, interest or other claim against land which is registered on title and affects the owner’s ability to sell the property.
EQUITY:
The difference, in dollars, between the market value of a property and the principal owing on debts secured against the property. The amount of money the owner will be able to keep from a sale transaction once the mortgages are paid out. Also known as ‘owner’s interest’.
EQUITY OF REDEMPTION:
The right a borrower has to pay out in full a mortgage against a property that has gone into foreclosure or power of sale proceedings, thus redeeming the property.
ESCAPE CLAUSE:
Any provision in a contract that allows one or more parties to end the contract upon the occurrence of certain events.
ESCROW:
A state wherein consideration, benefits, legal rights, money, documents or other valuables are transferred to another party in advance of that party’s legal entitlement to them, on the basis that the legal entitlement will arise at a given point in the future. A form of trust.
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