Earnest Money Deposit – The monetary deposit against the purchase of a property to show the buyer’s intention to fulfill a contract. Earnest money becomes part of the down payment if the offer is accepted, is returned if the offer is rejected by the seller, or is forfeited if the buyer rescinds their offer.
Easement – A right created by grant, reservation, agreement, or prescription to allow other parties to access someone else’s property.
Effective Date – A registration statement becomes effective and the sale of securities can start on that date.
Effective Gross Income (EGI) – The total income from a property from rents and other sources, minus any appropriate or established vacancy factor. EGI is expressed as collected income before expenses and debt service.
Effective Gross Rent (EGR) – Net rent realized after subtracting any tenant improvements and other capital costs, lease commissions and other sales expenses.
Effective Rent – The actual rent achieved by the landlord after subtracting any concessions allowed to a tenant, usually expressed as an average rate over the lease’s term.
Eminent Domain – A government’s power to acquire or “take” the property owned by a private party by condemnation for a public use. In return, the government must pay just compensation of the current market value.
Encroachment – When a structure extends over the boundary/property line, easement boundary or building setback line of an adjacent property, without permission of the adjacent property’s owner,
Endorsement – An addition made to alter or clarify a document. This is typically seen in a title policy or insurance policy.
Engineering Report – A report on the current physical condition of a real property and its major building systems, such as HVAC, exterior walls, structural components, parking lot, plumbing, electrical roof systems and appurtenances, created by an engineer or architect. The report can also estimate cost for any necessary replacement reserves.
Environmental Report – A report done by an environmental engineer following a study to reveal any known toxic contamination sites on or near the subject real property. A Phase I report includes a research of the public environmental databases plus a physical site inspection. The report provides lenders with an analysis of the data and recommendations for the lender. The more inclusive Phase II report has the addition of an analysis of soil samples from the property. The soil samples are to detect any actual toxic contamination in the soil or ground water.
Escalation Clause – A clause in a lease contract that calls for an increase in rent to reflect increases in expenses, such as real estate taxes and operating costs, paid by the landlord. Also a clause in a purchase offer for a property that allows the offer to be automatically raised if a higher offer is received.
Estate – An individual’s legal ownership interest in real property. Can be defined as the total of all real and personal property a person owns at their time of death.
Exclusive Agency Listing – A written contract between a property owner and a real estate broker in which the owner agrees to pay a fee or commission to the broker if the specified real property is leased/sold during the listing period.
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