Glossary of
Real Estate Terms

Your guide to common closing terms

Earnest Money

Earnest money is a small deposit (usually 1-5% of the purchase price) that a buyer puts down when making an offer to purchase real estate. Earnest money, as the name implies, assures the seller that you are serious, or “in earnest,” regarding the purchase of the property. If the offer is accepted, the earnest money is applied to the required down payment upon settlement.

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Earnest Money Deposit

An earnest money deposit is a small amount of money (usually 1-5% of the purchase price) that a buyer pays when making an offer to purchase real estate. This deposit is designed to ensure that the seller knows you are serious, or “in earnest,” regarding the purchase of the property. The EMD is then applied to the cost of the down payment if the purchase goes through to settlement.

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Endpoint

Endpoint is an industry-changing settlement company that applies state-of-the-art technology to the home closing process. Powered by the experience and infrastructure of First American, Endpoint provides a seamless process from start to finish, saving time, money, and adding convenience and security to the closing process.

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Entity

As a participant in a real estate transaction, an entity can be an individual, partnership, limited liability company, or corporation. A real estate entity can also include a real estate investment trust or real estate operating company.

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Escrow

Escrow is the process of putting a third party in charge of documents or money in order to facilitate a specific action. During the purchase process, an escrow account holds items and funds related to the purchase process, which will be needed at settlement. During the repayment term of a mortgage, an escrow account may hold funds set aside for the payment of property taxes and homeowners insurance.

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