Real Estate Glossary: 50 Terms Every Florida Buyer & Seller Should Know

Real estate transactions come with a vocabulary all their own. Here are 50 key terms defined in plain English — a reference guide for Florida buyers and sellers.

A

Abstract of Title

A history of all recorded documents affecting a property's ownership — the raw material used in a title search.

Adjustable-Rate Mortgage (ARM)

A mortgage with an interest rate that changes periodically based on a market index, after an initial fixed-rate period.

Amortization

The gradual repayment of a loan through scheduled principal and interest payments. Early payments are mostly interest; later payments are mostly principal.

Appraisal

A licensed appraiser's professional opinion of a property's market value, required by mortgage lenders before funding a loan.

AS IS Contract

The FAR/BAR Residential Contract for Sale and Purchase used throughout Florida. "AS IS" means the seller will not make repairs, though buyers still have inspection rights and may cancel during the inspection period.

Assessed Value

The value placed on a property by the county Property Appraiser for tax purposes. May differ from market value, especially for homesteaded properties subject to the Save Our Homes cap.

B

Boot

In a 1031 exchange, any cash or non-like-kind property received that is subject to immediate taxation.

Broker Price Opinion (BPO)

An estimate of property value prepared by a licensed broker, often used by lenders in short sale evaluations.

Buyer's Agent

A real estate agent who represents the buyer's interests in a transaction.

C

Cap Rate (Capitalization Rate)

Net Operating Income divided by purchase price. A key metric for evaluating investment properties.

Clear Title

A title free from liens, encumbrances, or claims that would prevent transfer or financing.

Closing

The final step in a real estate transaction where ownership transfers, documents are signed, and funds are disbursed.

Cloud on Title

Any claim, encumbrance, or lien that affects clear title to a property.

CMA (Comparative Market Analysis)

An estimate of a property's market value based on analysis of comparable recently sold properties. Prepared by a real estate agent.

Contingency

A condition that must be met for a contract to remain in effect. Common contingencies: financing, inspection, and appraisal.

Counter-Offer

A response to an offer that changes one or more terms. Creates a new offer that the original party may accept, reject, or counter again.

D

Deed

The legal document that transfers ownership of real property from seller to buyer, recorded in public records.

Documentary Stamp Tax (Doc Stamps)

Florida state tax on deeds ($0.70/$100 of sale price) and mortgages ($0.35/$100 of loan amount).

DTI (Debt-to-Income Ratio)

Your monthly debt payments divided by gross monthly income. Used by lenders to evaluate borrowing capacity.

E

Earnest Money Deposit

A good faith deposit made by the buyer upon contract execution, held in escrow until closing.

Easement

The legal right of a third party (utility company, neighbor, etc.) to use a portion of your property for a specific purpose.

Elevation Certificate (EC)

A document prepared by a licensed surveyor showing a building's elevation relative to the Base Flood Elevation. Affects flood insurance premiums.

Escrow

A neutral third-party holding of funds or documents until specific conditions are met.

Estoppel Certificate

A letter from an HOA or lender stating current dues, balances, and any pending issues as of a specific date.

F–H

FHA Loan

A mortgage insured by the Federal Housing Administration, with lower down payment requirements (3.5% with 580+ credit score).

FIRPTA Affidavit

A document signed at closing confirming whether the seller is a U.S. citizen/resident alien (affects withholding requirements).

Flood Zone

A geographic area with a specified level of flood risk, as designated by FEMA on Flood Insurance Rate Maps.

Homestead Exemption

A Florida property tax reduction of up to $50,000 for primary residences. Must be applied for by March 1.

HOA (Homeowners Association)

An organization that governs a residential community, enforces rules, and maintains common areas. Governed by Chapter 720 in Florida.

I–L

Inspection Period

The negotiated window (typically 10–15 days) during which a buyer may inspect the property and cancel the contract for any reason with full deposit refund.

Intangible Tax

Florida tax on new mortgage debt, assessed at $0.002 per $1 of the mortgage amount.

Jumbo Loan

A mortgage that exceeds the conforming loan limits ($766,550 in most Florida counties for 2024).

Lien

A legal claim against a property for an unpaid debt — mortgages, tax liens, contractor liens, HOA liens, judgment liens.

Lis Pendens

Latin for "suit pending" — a recorded notice that a lawsuit has been filed affecting title to a property.

Listing Agreement

A contract between a seller and their real estate broker authorizing the broker to market and sell the property.

M–P

Millage Rate

The tax rate expressed in mills used to calculate property taxes. 1 mill = $1 per $1,000 of assessed value.

MLS (Multiple Listing Service)

A database of properties listed for sale by cooperating real estate brokers. Provides broad exposure to buyer's agents and their clients.

PMI (Private Mortgage Insurance)

Insurance required on conventional loans with less than 20% down, protecting the lender in case of default.

Pre-Approval

Lender verification of a buyer's income, assets, and credit, resulting in a conditional commitment to lend up to a specified amount.

Principal

The outstanding balance of a loan, excluding interest.

Property Taxes

Annual taxes assessed by county and local authorities based on assessed value and millage rates.

R–S

Radon

A naturally occurring radioactive gas that can accumulate in homes. Testing is recommended during the home inspection process.

Recording

The official registration of real estate documents (deeds, mortgages) in public records at the county level.

Reserve Fund

Money set aside by a condo or HOA for future major repairs and replacements.

Right of Rescission

In real estate, the buyer's contractual right to cancel and receive the earnest money deposit back, typically exercisable during the inspection period.

Save Our Homes (SOH)

Florida's constitutional amendment capping annual increases in a homesteaded property's assessed value at 3% or CPI, whichever is lower.

Short Sale

A sale of property for less than the outstanding mortgage balance, requiring lender approval.

Special Assessment

A one-time charge levied on all property owners in a community for a specific major expense not covered by reserves.

Survey

A licensed surveyor's measurement and documentation of a property's boundaries, structures, and encroachments.

T–Z

Title

Legal ownership of real property, evidenced by a deed and public records.

Title Insurance

Insurance protecting the holder against financial loss from defects in the chain of title. Owner's policy protects the buyer; lender's policy protects the mortgage lender.

Title Search

A review of public records to verify ownership history, identify liens, and confirm clear title.

VA Loan

A mortgage guaranteed by the U.S. Department of Veterans Affairs, available to eligible veterans and active-duty military with no down payment required.

Warranty Deed

The most common type of deed in Florida residential sales; the seller warrants clear title against any claims arising from the seller's period of ownership.

WDO Inspection

Wood-Destroying Organism inspection (commonly called a "termite inspection"), checking for termites, wood-boring beetles, and fungi.

Zoning

Local government regulations governing land use — what types of buildings or activities are allowed on a given property.