An affirmative easement is a legal right that allows someone to use another person's property for a specific, active purpose. This type of easement benefits the party receiving the easement by granting them the ability to utilize the land in a way that they would not be able to otherwise.
A board of equalization is a governmental body tasked with ensuring property assessments for tax purposes are fair and equitable. These boards are pivotal in balancing the property tax system to avoid over- or under-taxation.
Constructive eviction occurs when a property becomes uninhabitable due to a landlord’s actions or failure to act, allowing tenants to terminate their lease.
Earnest money is a deposit made by a purchaser of real estate to evidence good faith.
An Earnest Money Contract is a crucial document in the real estate acquisition process, outlining the intention of a buyer to purchase a property and of a seller to sell it. It typically includes details about the amount of earnest money paid, the conditions under which the money will be applied or forfeited, and other terms of the sale.
EBITDA is a measure of a company's overall financial performance and is used as an alternative to earnings or net income in some circumstances. It strips out potentially non-operating and non-cash factors like interest, taxes, depreciation, and amortization.
An easement is a legal right allowing one party to use another property owner's land for a specific purpose. It manifests through agreements that outline the extent and conditions of use.
An easement by necessity is a type of easement that allows the owner of a landlocked property to access a public road or other essential resources through a neighbor's land.
An easement by prescription is a type of easement that is acquired through continuous and open use of another's property for a specific duration, as defined by state law, without the property owner's permission.
An easement in gross is a type of easement that grants an individual or entity the right to use another person's land for a specific, limited purpose. This right is not tied to owning any parcel of property and usually terminates upon the grantee's death.
A negative easement is the right to prevent the owner of a property from using it for specific purposes. This is in contrast to an affirmative easement, which allows the holder to make use of the property for a specified purpose.
An Eastlake House is a nineteenth-century-style home characterized by its ornate three-dimensional ornamentation created with chisels, gouges, and lathes, rather than scroll saws. Its unique styling predominantly features details that resemble furniture legs and knobs, distinguishing it from other Victorian architectural styles such as Queen Anne and Carpenter Gothic.
Eaves are the parts of a roof that extend beyond the exterior walls of a house. They are crucial for directing rainwater away from a house's walls and foundation, preserving structural integrity and aesthetic appeal.
The EB5 VISA program provides a pathway to U.S. permanent residency for foreign investors who make substantial monetary investments in U.S. businesses, particularly in real estate projects that create jobs.
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a common measure used to evaluate a company's operating performance by focusing on the earnings generated from its core business operations.
Easements, Covenants, Conditions, and Restrictions (ECCR) refer to the limitations and obligations placed on property usage and design, which are often enforceable by homeowner associations or property developers.
Echo Boomers represent the children of Baby Boomers, born from the mid-1970s to the late 1980s. Also known as Generation Y or Millennials, this group formed a significant demographic and influenced housing demand, especially between 1995 and 2006.
Ecology is the scientific study of interactions among organisms and their environments, focusing on processes such as energy flow, nutrient cycling, population dynamics, and ecosystem development. It aims to understand how natural processes and human activities affect ecosystems and seeks ways to maintain or restore the systemic natural balance.
An economic base refers to industries within a geographic market area that provide essential employment opportunities crucial for supporting the community. The concept helps determine the core industries that drive local economic growth.
Economic Development encompasses actions and initiatives taken by municipalities or communities to improve their economic health or the standard of living of residents.
Economic feasibility is a crucial component of a Feasibility Study that evaluates whether a proposed project or investment is financially viable and worth pursuing.
Economic life refers to the remaining period for which real estate improvements are expected to generate more rental income than their operating expenses.
Economic obsolescence refers to the decrease in property value caused by external factors, such as environmental changes or new developments. It is also known as external obsolescence or environmental obsolescence.
Economic Occupancy refers to the effective occupancy rate of property units based on units rented for money, rather than the physical occupancy, which simply counts the number of occupied units regardless of whether rent is being paid.
The principle that transactions must have a genuine financial or economic effect and not be solely orchestrated to evade taxes. This concept is crucial for determining the legitimacy and validity of financial actions, especially in tax law.
Economic rent refers to the excess payment made to a factor of production over and above the amount needed to bring that factor into production. This term is often used in economics and appraisal contexts.
In real estate condemnation, an economic unit refers to whether some or all of the property taken has a different highest and best use than the larger parcel.
Effective age refers to the age of a property based on the wear and tear it has sustained, as opposed to its actual chronological age.
The Effective Date of the Appraisal, often referred to as the Appraisal Date, is the specific point in time at which the value of the property is assessed. This date is crucial for reflecting the property's market conditions and physical state at that particular time.
Effective demand refers to the actual demand for a product or service that is backed by the ability and intention of consumers to pay for it at the prevailing price.
Effective Gross Income (EGI) for income-producing property is the potential gross income minus a vacancy and collection allowance, plus miscellaneous income.
The Effective Interest Rate (EIR) represents the true rate of return on a loan or investment, factoring in all associated financing expenses beyond the nominal interest rate.
The effective rental rate calculates the true cost of renting a property by taking into account rental concessions over the lease's duration. This provides a more accurate measure for both tenants and landlords compared to the asking rent.
The effective tax rate is a measure used to compare the tax payments with the market value of the property or annual income, facilitating comparisons across different jurisdictions with varying assessment ratios.
The efficiency ratio in real estate is the proportion of a building's area that is leasable space, reflecting how efficiently space within the building is utilized for leasing purposes.
An efficiency unit or apartment is a small dwelling unit, often consisting of a single room, within a multifamily structure. In most cases, kitchen and bath facilities are not complete.
Egress refers to the right or means of a property owner to exit their land parcel and access a public road or other routes of escape. This is a critical aspect of property rights and accessibility.
EIFS (Exterior Insulating and Finish Systems) is a synthetic exterior cladding system used as an alternative to traditional stucco. It provides insulation and a finished surface in a single integrated layer, enhancing the energy efficiency and aesthetic of buildings.
An ejectment action is a legal process utilized to regain possession of real property from someone who is unlawfully occupying it, particularly when there is no lease agreement in place.
Ekistics is the scientific study of human settlements, including city growth, planning, and design. It involves analyzing how people utilize and organize spaces in urban and rural environments.
An Electronic Signature (e-signature) is a digital method for identity verification through the Internet, usually used in connection with contracts and other types of agreements. This method often involves security measures such as a Personal Identification Number (PIN) to indicate the approval of the individual agreeing to the transaction.
Elements of comparison are critical attributes or variables used in real estate to evaluate and contrast different properties during an appraisal or analysis process.
An elevation drawing is an orthographic (nonperspective) representation of a property from different views such as the front, rear, or side. This type of drawing helps illustrate how a planned or existing structure is situated in its topographical context.
The Elizabethan or Half Timber Style is an architectural design characterized by a 2- or 2½-story structure with part of the second story overhanging the first, incorporating stone and stucco walls with visible wooden beams.
A technique used in the appraisal of mortgaged income property to estimate its present value by discounting the future annual cash flow and expected resale proceeds.
Emblements refer to growing crops which are considered to be personal property. This concept primarily applies to tenant farming wherein a tenant has the right to harvest crops even after the lease on the land has expired.
Eminent domain is the power of the government or its delegate to take private property for public use, with the requirement that the owner is fairly compensated. This legal principle ensures that essential public projects can proceed while protecting the property rights of individuals.
An employee is an individual who works for an employer who dictates not only what tasks the individual performs but also how those tasks are accomplished. Employers are usually responsible for paying Social Security taxes, withholding income taxes, and providing any obligatory employee benefits.
The Employee Relocation Council, now known as Worldwide ERC, is a nonprofit professional membership organization focused on the effective relocation of employees globally. It provides insight into costs, services, and best practices for transferring employees.
Empty nesters are a significant segment of the housing market, typically comprising couples whose children have moved out to establish their own households. This often leads to a demand for smaller and more manageable housing units.
Encapsulation in real estate refers to the process of covering or enclosing hazardous materials to prevent the release of dangerous substances into the environment or to minimize exposure hazards. It is commonly used for materials like asbestos and lead paint in older buildings, offering a safer and often more cost-effective alternative to removal.
Encroachment in real estate refers to any intrusion or overlap, such as a building or structure, onto another person's property. This can lead to disputes between property owners and may require legal intervention to resolve.
In real estate, 'encumber' refers to the act of burdening a property with a liability, debt, or legal claim, which can limit the owner's ability to transfer title or decrease the property's market value.
An encumbrance is a claim, lien, charge, or liability attached to and binding real property, which may affect its transferability or decrease its value.
End Loan, often referred to as a Permanent Mortgage, is a financing process that replaces a construction loan or interim loan when a property is completed. This loan facilitates long-term financing once the project transitions from the construction phase.
The term End of Year (EOY) refers to the time typically at the end of the fiscal or calendar year, important for financial reporting, tax preparation, and business analysis.
An end user in real estate refers to the individual or entity that ultimately uses or occupies a property, though they may not necessarily be the one who purchases, produces, or pays for it.
In real estate, endorsement refers to the act of signing one's name to authorize a check, note, or other financial document, as well as offering support or credibility to a statement.
Energy efficiency in real estate refers to buildings designed and constructed to minimize energy use for heating, cooling, and other utilities. This is typically achieved through additional insulation, weatherproofing, and the use of advanced equipment that reduces energy consumption.
An Energy Efficient Mortgage (EEM) is a mortgage loan designed to help homebuyers finance energy-efficient improvements to reduce future utility costs.
In real estate, 'entitlement' refers to the legal rights granted to a developer for the approval of certain land uses, as well as the term associated with the VA loan guarantee available to eligible veterans.
An entity is the legal form under which property is owned, impacting the benefits and risks associated with owning real estate. It can vary widely and includes structures like corporations, individual ownership, joint ventures, limited liability companies (LLCs), limited partnerships, partnerships, and real estate investment trusts (REITs).
An entrepreneur is an individual who initiates, manages, and assumes the risks of a business or enterprise. Entrepreneurs can be found in various industries and sectors and often innovation, creativity, and finance play significant roles in their success.
Entrepreneurial Profit is the compensation for the expertise and successful effort of a skilled businessperson, as calculated in both accounting and economics.
A comprehensive study of land to identify any unique environmental attributes, evaluate potential impacts, and determine the need for further action such as an Environmental Impact Statement (EIS).
An Environmental Impact Statement (EIS) is a comprehensive analysis assessing the potential effects of proposed development or action on the surrounding natural and artificial environment. The requirement for an EIS was established to ensure environmentally informed decision-making in federally funded or permitted projects per the National Environmental Policy Act of 1969 (NEPA).
Environmental Obsolescence refers to a form of depreciation in property value due to external, environmental factors that negatively impact its desirability and usability.
The Environmental Protection Agency (EPA) is an agency of the U.S. government established to enforce federal pollution abatement laws and implement various pollution prevention programs. The EPA regulates various environmental aspects, including air and water quality, waste management, pesticide usage, and industrial pollution.
An Environmental Report provides crucial information about the environmental conditions of a property. It assesses potential environmental liabilities and compliance with environmental regulations before any property transaction.
An Environmental Site Assessment (ESA) is a detailed analysis of a property to identify potential or existing environmental contamination liabilities, typically conducted before acquiring title to the property to comply with legal requirements and mitigate risks.
The Environmental Protection Agency (EPA) is a federal organization tasked with researching, monitoring, regulating, and enforcing laws related to environmental protection, to maintain and improve the health of the natural environment.
Equal and Uniform Taxation is a principle asserting that all individuals and property within the same class must be treated equally, with the same rate and value applied to property being taxed.
The Equal Credit Opportunity Act, enacted in 1974 and amended in 1976, is a federal law aiming to eliminate discrimination by lenders based on sex, marital status, age, race, color, religion, national origin, or receipt of public assistance.
Equalization ensures that property taxes are assessed fairly across properties with similar market values, helping maintain tax consistency within a given area or class of properties.
Equifax is one of the three major credit reporting agencies in the United States that collects and provides consumer financial information to creditors for credit evaluation, loan applications, and other financial decisions.
Equilibrium refers to a state of stability in a real estate market where supply and demand are balanced, resulting in stable prices. Understanding this concept is crucial for appraisers and investors alike to make informed decisions.
Equitable Conversion is a legal doctrine in certain states where, under a contract of sale, buyers and sellers are treated as though closing has already occurred. The seller in possession remains obligated to maintain the property until formal transfer.
An equitable lien is a legal interest granted to a creditor over a debtor's property as security for the debtor's obligation. Unlike a statutory lien, an equitable lien is created by the courts to achieve fairness, often in the absence of a formal written agreement.
An equitable mortgage is a legal arrangement where the property is encumbered similarly to a traditional mortgage loan but may not technically qualify as a mortgage due to a legal error or omission in documentation. Despite these errors, the courts can enforce an equitable mortgage to reflect the intentions of the parties involved.
Equitable title is the interest held by a buyer who has agreed to purchase a property but has not yet completed the transaction. This interest grants the buyer certain rights even though the legal title has not been officially transferred.
Equity buildup refers to the gradual increase in a homeowner's equity or ownership stake in a property as debt principal is paid down through scheduled mortgage payments.
Equity Dividend represents the portion of annual cash flow that an investor receives from their investment in real estate, calculated before taxes.
Equity represents the interest or value that an owner has in real estate over and above the liens or debts against it. It is calculated by subtracting the total liens from the market value of the property.
An equity kicker, also known simply as “kicker,” is a form of equity participation that lenders or investors can demand as part of a loan agreement. It provides the lender the right to share in the future success of the borrowing venture, typically in the form of a percentage of ownership or profits.
An equity loan, often referred to as a home equity loan or second mortgage, allows homeowners to borrow money by leveraging the equity in their homes. It is a type of loan in which the borrower uses the equity of their home as collateral.
Equity of Redemption refers to the right of a property owner to reclaim their property even after defaulting on a mortgage, by paying off the due amounts before the foreclosure is finalized.
Equity participation entails property owners selling an interest in their property to an investor, who, in return, provides capital or financial support. It enables property owners to unlock capital without relinquishing full control.
An Equity Real Estate Investment Trust (EREIT) focuses primarily on investing in real properties, generating most of its revenue from leasing properties and capital appreciation rather than mortgages or construction loans.
Equity sharing is a financing arrangement where the property owner and lender both hold stakes in the property's future value, meaning the lender is entitled to a portion of any resale profits, usually resulting in a lower interest rate for the property owner.
Equity skimming is a type of real estate fraud where an investor takes out a loan exceeding the property's value, often via fraudulent means, and then collects rent on the property without making mortgage payments, increasing negative equity.
Equity stripping involves reducing the equity in a property through refinancing or obtaining additional loans, typically used as a tactic to avoid asset seizure in cases of financial distress or by predatory lenders.
Equity takeout refers to the process of refinancing a property mortgage primarily to raise cash. This results in an increase in the debt secured by the property while leveraging the equity built into the home.
The equity yield rate is the rate of return on the equity portion of an investment, taking into account periodic cash flow and the proceeds from resale. It considers the timing and amounts of cash flow after annual debt service, but not income taxes.
Erosion refers to the gradual wearing away of soil, rock, or other surface materials through natural processes such as water flow, wind, or glacier movement. It is a critical concept in real estate, agriculture, environmental planning, and construction, as it affects land stability, property values, and ecosystem health.
Errors and Omissions Insurance (E&O Insurance) is a form of liability protection that provides coverage against claims of professional malpractice and mistakes in business dealings made by the insured party. It is essential for professionals who provide services and advice to clients, including real estate brokers, to safeguard against potential legal actions arising from errors or omissions in their work.
Escalation clauses and escalation mortgages are tools commonly used in real estate to adjust costs and payments in accordance with specific metrics, such as inflation or interest rates, to accommodate changing economic conditions.
An escalation clause in real estate is a contract provision allowing for an adjustment in the price based on external factors, often used in competitive bidding situations.
An escalator clause is a provision in a lease that requires the tenant to pay additional rent based on an increase in specified costs such as real estate taxes, operating expenses, or other financial metrics.
An Escalator Mortgage, commonly referred to as an Adjustable-Rate Mortgage (ARM), is a type of home loan where the interest rate fluctuates based on a specific financial index, causing periodic payment adjustments over the life of the loan.
An escape clause is a provision in a contract that allows one or more parties to cancel all or part of the contract if certain events or situations do or do not happen.
