Earnest Money:
A deposit given to the seller or seller's sales professional by the potential buyer upon signing the agreement of sale. The deposit shows that the buyer is serious about buying the property, an expression of good faith. If the sale goes through, the earnest money is applied against the down payment. If the sale does not go through, the earnest money is forfeited or lost unless the binder or offer to purchase expressly provides in writing that it is refundable. Also known as Earnest Money Deposit.

Earnest Money Deposit:
A deposit given to the seller or seller's sales professional by the potential buyer upon signing the agreement of sale. The deposit shows that the buyer is serious about buying the property, an expression of good faith. If the sale goes through, the earnest money is applied against the down payment. If the sale does not go through, the earnest money is forfeited or lost unless the binder or offer to purchase expressly provides in writing that it is refundable. Also known as Earnest Money.

Easement Rights:
A right, interest or privilege provided to persons other than the owner granting access to or over a property. For example, a utility easement provides public utilities such as electric, gas or telephone the right to place their lines or equipment across others' property.

Education Center:
Section of this website created to provide buying and selling tips. Go there now

Encroachment:
An improvement such as a building, or portion of a building, or an obstruction that physically intrudes upon, overlaps or trespasses upon the property of another.

Encumbrance:
Any right or interest in land that affects or limits the fee simple title to a property, such as mortgages, leases, easements or restrictions.

Equity:
The value of a homeowner's unencumbered interest in real estate. Equity is calculated by subtracting from the property's fair market value the total of the unpaid mortgage balance and any outstanding liens or other debts against the property. Equity increases as the mortgage balance declines or as the property value appreciates. When the mortgage and all other debts against the property are paid in full, the homeowner has 100% equity.

Escrow:
Something of value, such as money or documents, put into the custody of a third party to be delivered upon the fulfillment of specified conditions. For example, a buyer places a down payment in escrow with an attorney to be disbursed when the transaction closes or a borrower places funds in escrow with a lender to pay taxes when they are due.

Escrow Money:
Funds held by a lender or service provider to pay for taxes, hazard insurance, mortgage insurance and other expenses as they become due. Also known as Escrow Payment.

Escrow Payment:
Funds held by a lender or service provider to pay for taxes, hazard insurance, mortgage insurance and other expenses as they become due. Also known as Escrow Money.

Definitions are intended to be informational only. Please be advised that real estate practices vary from state to state and market to market. The information contained herein does not constitute legal advice. It is recommended that you consult with a qualified real estate attorney who can advise you specifically with respect to the requirements in your market.