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Glossary of Real Estate Terms

Encroachment

Definition Encroachment occurs when a structure, fence, driveway, or any other physical improvement extends beyond a property’s legal boundaries onto a neighboring property or public land. This can create disputes between property owners and...

Equity

Definition Equity is the ownership value a homeowner has in a property, calculated as the difference between the property's market value and the amount still owed on the mortgage. As homeowners pay down their mortgage or as the property’s va...

Escalation Clause

Definition An escalation clause is a contract provision that allows a buyer to automatically increase their offer if competing bids are received on a property. It is commonly used in competitive real estate markets where multiple buyers ...

Escrow

Definition: A neutral third party that holds funds and documents until all conditions of a real estate transaction are met. Explanation: Escrow ensures that neither the buyer nor the seller has access to funds or ownership until both sides h...

Escrow Holdback

Definition An escrow holdback is a portion of the sale proceeds that is temporarily held in escrow at closing to cover necessary repairs, incomplete work, or contingencies before the funds are fully released to the seller. This ensures tha...

Estoppel Letter

An estoppel letter/certificate is used to facilitate a closing by providing a snapshot of the fees or assessments that a seller may owe to their association. In Florida, purchasers are jointly and severally liable with the previous owner for du...

Fair Housing Act

Definition The Fair Housing Act (FHA) is a federal law that prohibits discrimination in housing-related transactions, ensuring that all individuals have equal access to housing opportunities regardless of race, color, religion, sex, disab...

Fannie Mae & Freddie Mac

Definition Fannie Mae (Federal National Mortgage Association - FNMA) and Freddie Mac (Federal Home Loan Mortgage Corporation - FHLMC) are government-sponsored enterprises (GSEs) that help stabilize the housing market by buying mortgages fr...

Fixed-Rate Mortgage

A fixed-rate mortgage maintains a consistent interest rate throughout the loan's duration. Fixed-rate loans are highly favored for their reliability and steadiness. With this type of lender financing, you can expect your monthly mortgage paymen...

Force Majeure

Definition: A force majeure clause in a real estate contract refers to an unforeseen event or circumstance beyond the control of the parties involved, which prevents one or both from fulfilling their contractual obligations. These events typica...

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