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Colorado Springs
Real Estate Dictionary — “E” is for Earnest Money
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Why do I need to put down Earnest Money when I’m making an offer on a house? In Colorado, Earnest Money is partially 
used to show your intention to purchase the property; it is consideration for the contract. You don’t have to put down Earnest Money, as you can also sign some type of promissory note, or you can use an Alternative Earnest Money Deadline.
The house that I want to buy in Old Colorado City has a utility easement on the back side of the house. What is this? It is a right given to a third party to use a portion of the property for certain purposes. The utility company needs access to the property to repair and install power lines and water mains
I read in the paper that some land was going to be taken by Eminent Domain by the state for a highway, what does this mean? Eminent Domain is the right of the government to take private property for public use; with just compensation to the owner. As an example, when the City of Colorado Springs needs to expand the lanes on a road, they may take additional land by Eminent Domain.
My Colorado Springs Realtor said that I should get a survey on the house I’m buying, as the neighbor’s tall stucco fence may be encroaching on my land. What is an encroachment? Encroachments are classified as unauthorized invasion or intrusion of real property onto another’s property. They often incur as the result of poor planning; vs. deliberate intent.
I just got turned down for a loan. Doesn’t the bank have to give me a reason? Yes, according to the Equal Credit Opportunity Act (EOCA) passed in 1974; lenders must provide the reasons for denying credit to applicants when requested to do so.
I want someone to represent me in buying a house in Colorado Springs, what type of a Realtor do I look for? Look for an Exclusive Buyer’s Agent, a Realtor working exclusively for buyers as a fiduciary agent.
What is Equifax? It is one of the “Big Three” credit-reporting bureaus that operate nationwide.
Does my Realtor carry E & O Insurance? Yes, in most states, Realtors are required to carry Errors and Omissions Insurance, which covers liabilities for errors, mistakes and negligence; but it does not cover fraudulent behavior. In Colorado, every Realtor is required to carry E & O insurance.
Why is my Earnest Money held in Escrow? Escrow refers to a process of holding money until the satisfaction of the terms and conditions of the contract have been achieved.
Are Realtors held to some type of Ethics? Yes, all Realtors subscribe to a Code of Ethics and are expected to abide by the Code. In Colorado, real estate agents are also required to take periodic Ethic update courses to maintain their license.
Should I get Extended Coverage on my Title Insurance; what does it cover? Extended Coverage typically covers things that aren’t in public records; such as mechanics liens, easement, tax liens.
My friend told me that the contract wasn’t valid because it wasn’t executed. What does his mean? When you execute a contract, you sign or acknowledge it; the method to execute a contract varies in different states.
Do you have a real estate question relating to the letter E? Leave us your question and we’ll get it answered for you.
- A is for Absorption Rate
- B is for Building Code
- C is for CMA
- D is for Deed
- E is for Earnest Money
- F is for Flag Lot
- G is for Gift Letter
- H is for Home Inspection
- I is for Inactive
- J is for Jumbo Loan
- K is for Kick Plate
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