Earnest Money (EM) — the initial money deposited in Escrow upon signing of the Purchase and Sale agreement to show that the Buyer is serious about buying the house. If the sale closes, the earnest money is applied to down payment. If the sale down not go through, the earnest money might not be refundable to the buyer.
Easement –– a right-of-way to a person/company to access the owner’s land. Most utility companies have easements across private property.
Encroachment –– a part of structure, building, fence that intrudes beyond legal boundary onto a neighboring property.
Equity – the value of homeowner’s free interest on the property. The equity increases as the owner pays off the mortgage balance and the property appreciates in value. For example, if the property value is $500,000 and the mortgage balance is $400,000 the homeowner has 20% equity. When the property is paid in full, the home owner has 100% equity.
Escrow Agent or Closing Agent – an escrow agent is a person or entity that holds property in trust for third parties while a transaction is finalized or a disagreement is resolved. An escrow agent essentially serves as a neutral middleman in the context of an escrow agreement.
Escrow Account – is an account separate from the mortgage account where deposit of funds occurs for payment of certain conditions that apply to the mortgage, usually property taxes and insurance.
