Commercial Glossary: E

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Earnest Money: Deposit paid by a potential homebuyer to show seriousness and intent in purchasing the property.

EBITDA: Stands for earnings before interest, taxes, depreciation and amortization. EBITDA is a way to measure cash flow and assess availability of funds to make debt payments.

Economic Demand Generator: The sources of income for a business; most often from customers.

Effective Gross Income: A measure of the gross income of a building that is fully rented out minus any expected vacancies.

Engineering Report: This is an evaluation report that is performed by an architect or engineer that describes the current physical condition and state of a building or property.

Entitlements: Legal right to benefits specified through a contract or law.

Environmental Indemnity: Kind of protection against any legal proceedings or liabilities caused by natural effects such as air, water, wildlife and other environmental surroundings.

Environmental Report: A report to determine environmental conditions and hazards of a property made by qualified environmental firms. The report focuses on environmental conditions around a building as well as in the property itself.

Environmental Risk: Assessment of the risk of loss of value and liability due to environmental hazards present including asbestos, radon, or anything else deemed hazardous.

Environmental Site Assessment: Document used primarily in planning that contains the environment assessment and evaluation of the environmental impact a property will have.

Equal Credit Opportunity Act (ECOA): Passed in 1974, this act made it law that creditors and lenders could base lending and credit decisions solely on creditworthiness and not on any other factors.

Equipment: Personal property including both new and used.

Equity: The difference in the remaining balance of a mortgage and the value of the home. It is the owner’s financial interest in the home.

Equity Loan: A loan taken out on the equity in someone’s home.

Escrow: Escrow is a period of time prior to loan funding where a third part will hold on to the loan documents in trust until conditions are met.

Escrow Account: An account setup and reserved to pay for property taxes and homeowner’s insurance costs.

Estimate Value: Appraisals estimate of the value of a house or property. Several methods exist for appraising the estimate value, the income approach, sales approach and cost approach.

Estoppel Certificate: This certificate is verification by a 3rd party that certain statements of fact are true and confirmed as of a specific date.

Exclusive Agency Listing: This is a listing contract between an agent and homeowners that the gives the sole right to sale the home to the to the agent.

Extended Stay: This is a type of hotel accommodation that offers extended lodging to guests.

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