Finer Homes Since 1940

Glossary of Real Estate Terms

The language of real estate is like that of other industries. Some words and phrases may seem foreign, others are ones that you hear every day. Following is a glossary that hopefully will allow you to better understand the real estate transactions with which you are involved.

1. Earnest Money
2. Easement
3. Eminent Domain
4. Encroachment
5. Encumbrance
6. Equity
7. Escheat
8. Escrow
9. Estoppel
10. Examination
11. Exception
12. Execute

1. Earnest Money

   A deposit of funds by the purchaser of a piece of real estate as evidence of good faith.

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2. Easement

   A right to use all or part of the land owned by another for a specific purpose. An easement may, for example, entitle its holder to install and maintain sewer or utility lines.

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3. Eminent Domain

   The right of a government to take privately owned property for public purposes under condemnation proceedings subject to payment of its fair market value.

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4. Encroachment

   Any interest, right, lien or liability attached to a parcel of land (such as unpaid taxes or an unsatisfied mortgage) that constitutes or represents a burden or charge upon the property.

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5. Encumbrance

   Any interest, right, lien or liability attached to a parcel of land (such as unpaid taxes or an unsatisfied mortgage) that constitutes or represents a burden or charge upon the property.

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6. Equity

   The market value of real property, less the amount of existing liens

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7. Escheat

   The reversion of property to the state when an owner dies leaving no legal heirs, devisees or claimants.

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8. Escrow

   A method of closing a real estate transaction in which all required documents and funds are placed with a third party for processing and disbursement.

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9. Estoppel

   A legal restraint that stops or prevents a person from contradicting or reneging on his previous position or previous assertions or commitments.

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10. Examination

    The study of the instruments and muniments incident to a chain of title to determine their effect and condition in order to reach a conclusion as to the status of the title.

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11. Exception

    A provision in a title insurance binder or policy that excludes liability for a specific title defect or an outstanding lien or encumbrance.

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12. Execute

    To sign a legal instrument. A deed is said to be executed when it is signed, sealed, witnessed and delivered.

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