Understanding Common Real Estate Terms

Buying or selling property involves unfamiliar terminology, from appraisals and contingencies to escrow, financing, title insurance and closing costs.

This A–Z real estate glossary explains commonly used words and phrases to help buyers, sellers and property owners better understand the real estate transaction process.

Whether you're purchasing your first home, selling a condominium, investing in waterfront property or exploring Southwest Florida real estate, understanding these terms can help you ask informed questions and make more confident decisions.

Note: Real estate practices, financing requirements and contract terminology may vary by state, lender and transaction. This glossary provides general explanations and is not a substitute for legal, tax or lending advice.

A

Adjustable-Rate Mortgage (ARM): A mortgage with an interest rate that may change periodically after an initial fixed-rate period. Rate adjustments are generally based on a specified financial index and loan terms.

Ad Valorem Tax: A property tax based on the assessed value of real estate. In Florida, ad valorem taxes are calculated using the property's taxable value after applicable exemptions and the millage rates established by local taxing authorities, including counties, cities, school districts and special districts. One mill equals $1 in tax for every $1,000 of taxable property value.

American Society of Home Inspectors (ASHI): This non-profit sets the standards for home inspections and inspectors. It is important to look for this accreditation or similar designation when selecting a property inspector.

Amenity: A feature of a property that is attractive to the owner or buyer that enhances the appeal, but is not vital to the functionality of the property. Amenities can include a favorable location, view, as well as community lifestyle features (a clubhouse, swimming pool, guard gate), etc.

Angle of Light: A zoning and building design standard that limits building height or mass based on an angled plane measured from a specified property line or reference point. Angle-of-light regulations may help preserve access to sunlight, air and open space while limiting the visual impact of buildings on neighboring properties. Specific requirements vary by municipality and zoning district.

Annual Percentage Rate (APR): The annual cost of borrowing expressed as a percentage, including the interest rate and certain lender fees. APR helps borrowers compare the costs of different mortgage offers.

Appraisal: An estimation of the market value (appraised value) of a property by a licensed appraiser based on comparable recent sales (usually the last 6 to 12 months) of nearby or similar properties. In some areas, where homes are very unique these comparable sales may not be in the same "neighborhood".

Appraisal Gap: The difference between a property's agreed-upon purchase price and its appraised value when the appraisal comes in below the contract price. Depending on the contract terms, the buyer may need additional funds, negotiate a lower price or exercise an applicable contingency.

Appreciation: The increase in the value of the property due to upgrades made to the home, or changes in market conditions.

Approved for Short Sale: This is when the homeowner’s bank has approved a reduced listing price on the home for resale.

Asbestos Inspection: An evaluation performed by a qualified professional to identify materials that may contain asbestos, particularly in older buildings. Suspected materials may require laboratory testing before renovation, demolition or removal.

As-Is Contract: A real estate purchase agreement in which the seller generally does not agree to make repairs. Buyers may still have inspection and cancellation rights depending on the contract terms.

Assessed Value: The value of a property by the public tax assessment office is used to determine the taxation amount.

Assessment: For tax purposes, this term means placing a value on a piece of property. An assessment also can refer to a fee levy on a property for a needed repair or addition such as a sewer assessment, or a condo assessment for new pavers.

Assumable Mortgage: An existing mortgage that can be transferred from the seller to the buyer. The buyer will assume the mortgage.

B

Back-end Ratio: Used when applying for a loan, this ratio compares the borrower’s monthly debt payments to gross income to determine if they are qualified for a loan. This is one of two ratios used to approve the applicant's approval, the Housing Ratio is the other.

Backup Offer: An offer on a property that is under contract with contingencies or conditions that need to be met or achieved before the sale is final. Should the contract fall apart, a backup offer can be negotiated.

Base Flood Elevation (BFE): The calculated elevation to which floodwater is anticipated to rise during a flood having a 1% annual chance of occurring. BFE is used in floodplain management and can affect construction elevation requirements and flood insurance considerations.

Broker: Individual who charges a fee or commission to bring buyer and seller together in the contract negotiation process.

Buildable Area: The portion of a property where construction is permitted after accounting for setbacks, easements, environmental restrictions, zoning requirements and other applicable regulations.

Building Code: Regulations that apply to the construction, coverage, or design elements that are locally determined. Most building codes are designed for safety while some are aesthetically determined.

Building Coverage: The percentage of a lot occupied by the footprint of buildings and other structures counted under applicable local development regulations. Building coverage limits help regulate development density and preserve open space.

Building Setback: The minimum required distance between a building or structure and a property line, road, waterway or other designated boundary. Setback requirements vary according to zoning, property location and structure type.

Buyer's Agent: A licensed real estate professional who represents the buyer's interests during a real estate transaction, subject to the brokerage relationship established under applicable law.

Buyer Brokerage Agreement: A written agreement between a buyer and a real estate brokerage that establishes the services provided, representation terms and compensation arrangements.

Buyers Market: When the inventory of homes for sale outnumbers the number of interested buyers in the market to purchase a home producing longer days on the market and price reductions.

C

Capital Gains Tax: A tax that may apply to the profit realized from selling real estate. Exclusions, exemptions and tax rates depend on the property's use, ownership history and applicable tax laws.

Cash-value policy: This is an insurance policy that covers the replacement cost of the homeowners' property (less depreciation) if damage occurs to the home.

Certificate of Occupancy (CO): A document issued by the appropriate local authority confirming that a building meets applicable requirements for occupancy.

Chinese Drywall Inspection: An inspection for potentially defective imported drywall associated with certain construction and renovation projects, particularly during the mid-2000s. Signs may include corrosion of metal components, unusual odors and damage to electrical or mechanical systems. Specialized testing may be necessary to confirm the presence of problematic drywall.

Clear Title: This title is free of liens and there are no legal questions as to who owns the property.

Closing: The time upon which both buyer and seller have signed all the applicable documents and all associated costs of the sale have been paid. Also known as the Settlement.

Closing Costs: These extra expenses are not included in the agreed-upon sale price of the property. They are generated by the transfer of ownership for the property sold. They can include taxes, charges for surveys, title insurance, and attorney's fees. Closing costs can change from state to state and your Realtor can provide an estimate of any closing costs that will be incurred by both buyer and seller.

Closing Disclosure: A standardized mortgage document detailing the final loan terms, projected payments and closing costs. For most covered consumer mortgages, borrowers must receive it at least three business days before closing.

Closing Statement: See HUD Statement

CMA: See Comparative Market Analysis

Coastal Construction Control Line (CCCL): A regulatory boundary established by the Florida Department of Environmental Protection to protect beaches, dunes and coastal ecosystems from development that could increase erosion or storm damage. Construction, reconstruction, additions and certain other activities seaward of the CCCL generally require special state permits. The CCCL is not a setback line or a prohibition on construction, but properties within the regulated area may face additional building requirements and restrictions.

Coastal High Hazard Area (CHHA): A coastal area identified under applicable planning and floodplain regulations as particularly vulnerable to hurricane-related flooding and storm surge. Development restrictions and construction requirements may apply, depending on the jurisdiction and the specific regulatory designation.

Coastal A Zone: A coastal flood hazard area subject to significant wave action, typically involving waves between 1.5 and 3 feet during the base flood. Buildings in these areas may be subject to enhanced flood-resistant construction requirements.

Condominium Association: An organization responsible for administering a condominium property, enforcing governing documents, maintaining common elements and collecting assessments from unit owners.

Condominium Documents: The declaration of condominium, bylaws, articles of incorporation, rules and other governing records that establish ownership rights, restrictions and association responsibilities.

Condominium Resale Disclosure: Information and documents that Florida law requires to be provided in certain condominium resale transactions. These may include governing documents, financial information and other disclosures, with applicable buyer cancellation rights.

Commission: Usually a percentage of the purchase price of the property, this fee is charged by the Broker, Agent, or Realtor in exchange for "brokering" the real estate transaction.

Comparables also known as Comps: These are recently sold properties of similar size, amenities, and location that are used to help determine the best estimate of a property value during the appraisal process. Also known as "comparable properties".

Comparative Market Analysis (CMA): Used to determine the fair market value of a property, this analysis compares the sales prices of recently sold similar properties with respect to size, amenities, age, and location to estimate the home's value. CMAs are often done to determine the asking price of a new listing based on current market conditions.

Commitment Letter Also known as a loan commitment letter, this is a formal statement from the lender detailing the lending terms that they will extend to the home buyer.

Common Area Assessments Fee to each property owner in a condominium or planned development that is charged to each owner to help buffer the costs for common area improvements, repairs, or maintaining the grounds or management in general.

Common Areas Areas of a planned community or condominium complex that are used by each property owner. They can be land, amenities, structures, parking, driveways, or deeded access areas.

Condominium A complex with several individual unit owners who have an interest in the common areas of the property.

Condominium Hotel: Also referred to as a "Condotel" this complex functions as a short-term stay hotel, however, the units are owned by private individuals. The property often has a site rental office, guest registration area, daily cleaning services, etc.

Condotel: See Condominium Hotel

Contingent Offer: This offer is accepted by the seller, but there are specific conditions that must be met in order for the sale to proceed to close. Contingencies can include obtaining a locked-in loan interest rate, the successful sale of another property, an acceptable appraisal, etc.

Contingencies: These are specific conditions in a contract that protect the buyer. Contingencies can be financing, sale of a buyer's other property, home inspections, viewing in person, etc.

Construction Loan: This loan (often at a higher interest rate), is a short-term loan designed to finance the cost of the construction project. During this time, the lender pays the builder based on the progress of the construction.

Contingency: Any condition in the contract that must be met before it becomes a legally binding document. Contingencies can include viewing in person, favorable financing terms, the sale of a different property, or an acceptable home inspection.

Conventional Loan: This is a home loan not guaranteed by any government agency (Federal Housing Administration, FHA or Veterans Administration, VA).

D

Days on Market or DOM: This is the number of days a property is on the market listed as "Active" before it goes pending or contingent.

Debt-to-income Ratio or DTI: DTI compares qualifying monthly debt obligations with gross monthly income.

Deed: The legal document conveying title to a property.

Deed-in-lieu: The property deed is surrendered to the lender (mortgage holder) by the owner (mortgagee) to avoid foreclosure.

Deed Restrictions: Legally enforceable limitations governing how a property may be used, developed or modified. Restrictions may address building requirements, rentals, pets, landscaping and other property uses.

Deposit: A sum of money given to bind the sale of real estate or a sum of money given to ensure payment or an advance of funds in the processing of a loan. See earnest money deposit.

Depository Institutions: These are institutions that underwrite loans and also determine their loan rates and pricing. They include credit unions, banks, savings & loans, etc.

Depreciation: A decline in the market value of property; the opposite condition is a rise in the market value known as appreciation.

Design Pressure (DP) Rating: A performance rating indicating the positive and negative wind pressures that a window, door or other building component is designed and tested to withstand. Required ratings depend on the building's location, height, exposure and applicable building codes.

Document Stamps aka Doc Stamps: This is a tax paid to the Clerk of Court when a document (warranty deed or quitclaim deed) is recorded to transfer ownership in Florida real property.

Down Payment: Usually between 5% and 20% of the purchase price is paid prior to closing as cash. This is required often by the bank as insurance that the loan will be paid, or sometimes by the owner to secure that the buyer is serious about their offer.

Drywood Termite Inspection: An inspection for termites that establish colonies within dry wood without requiring contact with soil. Drywood termites can damage framing, furniture, trim and other wooden components. Evidence may include discarded wings, small fecal pellets and damaged wood.

Due Diligence: The process of investigating a property's physical condition, legal status, financial obligations, insurance requirements and other relevant factors before completing a purchase.

E

Earnest Money Deposit: A deposit large enough made by the potential buyer to show that they are serious (earnest) about purchasing the property.

Easement: A right of way granting individuals other than the property owner permission to access, or go over the property.

Elevation Certificate: A document providing elevation information about a building and its relationship to flood elevations. It may be useful for evaluating flood risk, insurance and building requirements.

Eminent Domain: This allows the government to obtain an individual's personal property for public use at fair market value.

Environmental Inspection: An evaluation of potential environmental hazards affecting a property, such as contamination, asbestos, lead, mold or other hazardous materials. The scope depends on the property's history, location and intended use.

Equity: A measure of the difference between the fair market value and the amount still owed on the property mortgage. This is a measure of the owner's financial interest in the property.

Escrow: An arrangement in which a neutral third party holds money, documents or other assets until specified conditions of a real estate transaction are satisfied. In a property purchase, an escrow agent may hold the buyer's earnest money deposit and disburse funds according to the purchase agreement and closing instructions. The term can also refer to a lender-managed account used to collect and pay property taxes and insurance premiums.

Escrow State: A state in which an escrow agent is responsible for closing.

Estoppel Certificate: A statement issued by a condominium or homeowners association identifying assessments, outstanding balances and certain other financial or compliance information relevant to a property transfer.

Escrow: These are the documents, deposits, or other valuables held by a third party to be distributed when a condition is met. The escrow agent will disburse these funds, documents, or items at the property closing.

F

Fair Market Value: This is a combination of the highest price and buyer would be willing to pay and the lowest price the seller is willing to take, this is the fair market value.

Fannie Mae: Designed to provide affordable mortgage funds, this government-sponsored entity was created in 1938.

Federal Housing Administration: This is a government agency (FHA) that oversees that loans are designed for low to moderate-income earners to have the ability to secure a loan.

Fee Simple: This is the greatest interest an individual can have in a property.

FEMA Flood Zone: A geographic designation established by the Federal Emergency Management Agency indicating mapped flood hazards. Flood zone classifications can affect insurance and construction requirements.

Fixed-Rate Mortgage: A mortgage with an interest rate that remains unchanged throughout the loan term, providing predictable principal and interest payments.

Flood Insurance: A required insurance for properties in federally designated flood areas, this helps compensate for flood-caused damage. Visit FEMA to learn more about FIRM (Flood Insurance Rate Maps).

Flood Insurance Rate Map (FIRM): An official FEMA map identifying flood hazard areas, flood zones and applicable flood elevations used for insurance and floodplain management purposes.

Floodproofing: Construction methods and protective measures designed to reduce flood damage to a building. Depending on the structure and applicable regulations, these may include elevating utilities, using flood-resistant materials or incorporating engineered flood protection.

Floor Area Ratio (FAR): A zoning measurement comparing the total floor area counted under applicable regulations to the area of the lot. FAR limits help control the overall size and intensity of development.

Foreclosure: This is the legal process when the lender can force the sale of a property usually at a public auction when the borrower fails to pay their mortgage. The proceeds of the foreclosure sale are applied to the debt held by the lender.

Foundation Inspection: An evaluation of a building's foundation for signs of settlement, movement, cracking, moisture damage or structural deterioration. A structural engineer may be needed when significant concerns are identified.

Four-Point Inspection: An inspection commonly requested by Florida homeowners insurance companies that evaluates four major building systems: roofing, electrical, plumbing and heating, ventilation and air conditioning (HVAC). Insurers use the findings to help assess property condition and insurance eligibility.

Freddie Mac: Often used in the same sentence with Fanny Mae, this is also a government sponsored entitie designed to provide a source of mortgage funding nationwide.

G

Good Faith Estimate aka Loan Estimate: Loan Estimate is the standard disclosure for most covered mortgage applications

H

Hazard Insurance: This insurance helps to cover damage to a property caused by wind, fire, and other hazards. It does not compensate for flood damage.

Highest and Best Use: The reasonably probable, legally permissible, physically possible and financially feasible use of a property that results in its highest value. Appraisers may consider this principle when evaluating real estate.

High-Velocity Hurricane Zone (HVHZ): A special designation under the Florida Building Code that applies to Miami-Dade and Broward counties and establishes additional wind-resistance requirements. Sanibel and Captiva are not within the HVHZ, although applicable Florida Building Code wind and impact protection requirements still apply.

Home Inspection: A professional visual evaluation of a property's accessible structure, systems and components, including roofing, electrical, plumbing, HVAC and other visible conditions. A standard home inspection helps buyers identify potential defects and maintenance concerns but does not necessarily include specialized evaluations for termites, mold, radon, lead-based paint, asbestos, seawalls or concealed structural problems. Additional inspections may be recommended based on the property's age, location and condition.

Home Inspection Contingency: A provision in a purchase agreement that gives the buyer specified rights to inspect a property and, depending on the contract, request repairs, negotiate terms or cancel within an established inspection period.

Homeowners Association aka HOA: Within a neighborhood, community, or complex this is the management organization that creates rules, enforces restrictions, and assesses owners with fees to cover maintaining the community. The organization can be ruled by elected property owners within the community or an outside service company.

Homeowners Insurance: This policy protects the structure of the home, and its contents, should damage occur.

Homestead Exemption: A Florida property tax benefit available to qualifying homeowners who establish their property as their permanent residence and meet applicable eligibility requirements.

Housing Ratio: One of two debt-to-income ratios (The back-end Ratio is the other) that a lender analyzes to determine a borrower’s ability to qualify for a home loan. eligibility for a home loan. This ratio compares the total housing cost (principal, homeowners insurance, taxes, and private mortgage insurance) to the potential buyer's gross income.

HUD-1 Settlement Statement: A document that itemizes the financial details of a real estate transaction, including charges, credits and amounts paid by the buyer and seller at closing. For most consumer mortgage transactions, the Closing Disclosure has replaced the HUD-1. However, the HUD-1 may still be used for certain transactions, including some reverse mortgages.

Hurricane Deductible: A separate deductible included in certain Florida property insurance policies that applies to covered hurricane losses. It is often calculated as a percentage of the insured dwelling value.

Hurricane-Rated Garage Door: A garage door designed and approved to withstand specified wind pressures under applicable building codes. Proper installation, reinforcement and hardware are essential to its performance during hurricanes.

I

Impact-Resistant Doors: Exterior doors designed and tested to withstand specified wind pressures and, where required, impacts from windborne debris. These may include entry doors, sliding glass doors and French doors. Proper installation and approved hardware are essential to maintaining the building's hurricane protection.

Impact-Resistant Windows: Windows designed and tested to resist impacts from windborne debris and withstand specified wind pressures. Approved impact-resistant windows can help protect a building's exterior envelope during hurricanes and may qualify for insurance discounts when applicable requirements are met.

Impervious Surface Coverage: The percentage of a property covered by surfaces that prevent or substantially reduce water infiltration, such as roofs, concrete driveways and certain paved areas. Local regulations may limit impervious coverage to manage stormwater runoff and protect drainage systems.

In Escrow: This is usually 30 to 45 days after the offer has been accepted by the seller, during which time inspections are done, the home is appraised, any liens on the property are discovered and any other due diligence is performed such as determining room for a pool, etc.

Inspection: Performed by a licensed qualified professional, this is a thorough examination of a property and all the systems within creating a report that addresses areas that need repair or attention.

Investment Property: A property that is not occupied full time by the owner.

J

Joint Tenancy: Co-ownership of a property that gives each individual (tenant) equal rights to the property and the right of survivorship should one tenant pass.

Jumbo Mortgage: A loan that exceeds the normal or conforming loan limit for a lender. A jumbo mortgage is used for luxury home purchases.

K

Key Rate: Determined by the Federal Government, this interest rate determines the cost (interest rate) to borrow money which affects all types of loans including property loans.

L

Lead-Based Paint Disclosure: A federally required disclosure for most residential properties built before 1978. Sellers generally must disclose known lead-based paint and hazards, provide available records and reports, and give buyers an EPA-approved information pamphlet. Buyers generally receive an opportunity to conduct a lead inspection or risk assessment, subject to applicable exceptions and negotiated terms.

Lead-Based Paint Inspection: An evaluation to determine whether lead-based paint is present in a building. Lead-based paint is most commonly associated with housing constructed before 1978 and can pose health risks, particularly when paint deteriorates or creates contaminated dust.

Lease Restrictions: Rules established by a condominium association, homeowners association or local government that limit rental duration, frequency, occupancy or other leasing activities.

Listing Agreement: A contract between a property owner and a real estate brokerage establishing the terms under which the brokerage will market or assist with the sale of the property.

Listing Price: This is the asking price for the property determined by the Seller and based on current market conditions, comparable sales, active listings, inventory, their time-line and financial motivation.

Loan estimate: Document sent to the loan applicant that clearly states the terms, closing costs, and monthly mortgage payments.

Loan-to-value Ratio: This value estimates the risk a lender takes on a loan and it is calculated by dividing the mortgage by the appraised value.

Lot Coverage: The percentage of a parcel occupied by buildings, structures or other improvements as defined by local land development regulations. Some jurisdictions distinguish between building coverage, impervious surface coverage and total developed area. Buyers should verify which improvements count toward each applicable limit.

M

Marine Seawall Inspection: An evaluation of a waterfront property's seawall for cracking, movement, erosion, corrosion, drainage problems and structural deterioration. Inspections may help identify potential repair or replacement needs.

Milestone Inspection: A structural inspection required for certain older Florida condominium and cooperative buildings. It evaluates whether substantial structural deterioration exists and whether further investigation is necessary.

Millage Rate: The property tax rate established by a local taxing authority and expressed in mills. One mill equals $1 of tax for every $1,000 of taxable property value.

Mold Inspection: An evaluation of a property for visible mold growth, moisture intrusion and conditions that may encourage microbial growth. Inspections may include moisture measurements, visual assessments and sampling when appropriate. Mold can develop after roof leaks, plumbing failures, flooding or prolonged humidity.

Mold Remediation: The process of identifying and correcting moisture problems, safely removing mold-contaminated materials when necessary, and cleaning affected areas to reduce further mold growth.

Months of Inventory: A real estate market indicator estimating how many months it would take to sell the current supply of available properties at the existing sales pace if no additional properties were listed.

Mortgage: A legal agreement in which real estate serves as collateral for a loan. The borrower, known as the mortgagor, pledges the property as security for repayment of the debt to the lender, known as the mortgagee. If the borrower defaults, the lender may have the right to foreclose on the property, subject to applicable laws.

Mortgage Broker: A licensed professional who helps a buyer secure a loan with financing from a bank or other institution.

Mortgage Interest Rate: Mortgage rates are determined by lenders and influenced by financial markets, borrower qualifications and loan terms.

Multiple Listing Service also known as MLS: This database covers a specific area providing a platform for Realtors to list and market homes for sale.

N

National Flood Insurance Program (NFIP): A federal program administered by FEMA that provides flood insurance through participating insurers and supports floodplain management.

Net Proceeds: The amount of money received by the seller at closing in excess of the closing costs.

Nonconforming Structure: A building or improvement that was legally constructed but no longer complies with current zoning or land development requirements, such as setbacks, height limits or lot coverage. Existing structures may be permitted to remain, but alterations, expansions or reconstruction following substantial damage may be subject to additional restrictions.

Nonconforming Use: A property use or structure that was legally established but does not comply with subsequently adopted zoning or land development regulations. Its continuation, modification or rebuilding may be restricted.

O

Open House: Event when the listing agent or open house coordinator showcases the home to potential buyers.

Owner Financing: The sale of a property in which the seller agrees to provide all or part of the financing requested by the buyer.

Origination Fee: This charge is from the lender or broker to initiate & complete the loan application.

P

Pending Sale: Pending status generally indicates a contract moving toward closing; exact status definitions vary by MLS.

Pest Inspection: An evaluation for evidence of pests that may damage a property, including termites, wood-boring beetles, carpenter ants and other wood-destroying organisms. The inspection scope varies depending on the provider and requested report.

Piggyback Loan: Used to avoid private mortgage insurance (PMI), this is a combination of loans where one loan covers 80% and the additional loan covers 10 to 15% of the home value. The borrower covers the remaining balance.

Points (Mortgage Discount Points): Fees a borrower may pay to a lender at closing to obtain a lower mortgage interest rate. One discount point typically equals 1% of the loan amount. Paying discount points can reduce monthly principal and interest payments, but whether the upfront cost is worthwhile depends on the loan terms and how long the borrower keeps the mortgage. Tax deductibility depends on individual circumstances and applicable IRS rules.

Pool and Spa Inspection: An evaluation of swimming pools, spas and associated equipment, including pumps, filters, heaters, plumbing, electrical components and visible structural conditions. Safety features and applicable barrier requirements may also be reviewed.

Pre-approval Letter: A letter from a lender indicating that they are willing to loan a specific amount of money to the borrower to purchase a property. This is not a loan approval guarantee.

Prepayment Penalty: A fee that some lenders charge when a borrower pays off a mortgage earlier than permitted under the loan terms.

Pre-Purchase Home Inspection: A professional evaluation of a property's accessible structural components, roofing, plumbing, electrical systems, HVAC equipment and other visible conditions before the buyer completes the purchase.

Pre-qualification: The determination of how much money the potential property buyer might be allowed to borrow before they apply for a loan. This process often results in a "pre-approval letter" from the lender.

Principal, Interest, property taxes, and homeowners insurance (PITI): These four areas are added together to form the monthly mortgage payment.

Private mortgage insurance (PMI): When a borrower has a down payment of less than 20% of the home value, this fee is charged.

Product Approval: Documentation establishing that a building product, such as a window, exterior door, roofing system or shutter, meets specified performance requirements under the Florida Building Code. Florida Product Approval or Miami-Dade Notices of Acceptance may be used where applicable, subject to local approval requirements.

Property Appraiser: A county official responsible for determining property values for ad valorem tax purposes and administering certain property tax exemptions.

Property Tax Proration: The allocation of property taxes between buyer and seller at closing based on their respective periods of ownership and the terms of the purchase agreement.

Public Auction: In real estate, this is a pre-advertised public event in which a property is sold by auction to the highest bidder usually in a public location. The auction is often triggered by mortgage default and proceeds are used to repay the mortgagor/lender.

Purchase and Sale Agreement: This is a contract signed by the seller and the buyer with all the agreed-upon terms and conditions for the property sale.

Q

Quitclaim Deed: This deed transfers ownership of a property without any validation of true ownership. Most often used to transfer property within a family.

R

Radon Disclosure: Information provided to buyers concerning radon, a naturally occurring radioactive gas that can accumulate inside buildings. Florida law requires specified radon warning language in certain real estate documents. Testing is the only reliable way to determine indoor radon concentrations.

Radon Testing: A test measuring the concentration of radon gas inside a building. Radon is colorless and odorless, and prolonged exposure to elevated concentrations increases lung cancer risk. Testing may use short-term or long-term monitoring devices.

Real Estate Owned Property: Often referred to as REO these are properties that are owned by the lender by loan defaults.

Real Estate Agent: An individual who is licensed to negotiate the transaction and sale of real estate on behalf of the seller (property owner).

Real Property: Any parcel of land and the man-made structures or natural resources found upon the property such as crops, oil, trees, buildings, other structures, etc.

Realtor®: The trademarked title for any real estate broker or agent that has an active membership in a real estate board that is affiliated with the National Association of Realtors.

Replacement Cost: The estimated expense of repairing or rebuilding a damaged structure using materials of comparable kind and quality at current construction costs, without deducting for depreciation, subject to applicable insurance policy terms.

Resale Certificate: A document or disclosure package, where required, that provides prospective buyers with specified information about an association, its governing documents, financial obligations and other matters.

Reserve Fund: Money set aside by a condominium or homeowners association for future repairs, replacements and major expenses involving association-maintained property.

Right of First Refusal: An agreement between the property owner and another interested buyer or renter the first chance to purchase or rent the property before it is offered to others for sale or rent.

Right of Survivorship: The right of the survivor in a joint tenancy agreement to obtain the deceased party's interest in the property.

Roof Inspection: An evaluation of a roof's condition, age, visible damage, drainage and remaining serviceability. In coastal Florida, inspectors may also assess deterioration associated with wind exposure, salt air and previous storm damage.

Roof-to-Wall Connection: The structural connection securing a roof system to a building's walls. Connections such as clips, straps and engineered anchors help resist wind uplift during hurricanes. The type and installation of these connections may affect wind mitigation insurance credits.

S

Sale-leaseback: The buyer acquires the deed to the property and allows the seller to lease back the sold property for an agreed-upon rate and timeframe.

Save Our Homes Assessment Limitation: A Florida property tax provision that limits annual increases in the assessed value of qualifying homestead property to the lesser of 3% or the applicable change in the Consumer Price Index. The limitation applies to assessed value, not necessarily the total property tax bill.

Second Mortgage: This mortgage holds the second lien position to the first mortgage in the event of a default by the borrower.

Seller Concessions: Costs or credits that a seller agrees to provide to a buyer as part of a real estate transaction. These may help cover eligible closing costs, prepaid expenses or other negotiated items, subject to lender and contract requirements.

Seller's Property Disclosure: Information provided by a property seller concerning known facts that materially affect the property's value and are not readily observable or known to the buyer. Florida sellers generally have a duty to disclose such facts, even when a property is sold as-is. The scope of required disclosures depends on applicable law and circumstances.

Seller's Market: This market condition occurs when buyers outnumber the number of available homes for sale leading to multiple offers and bidding wars.

Settlement: See "Closing"

Settlement Sheet: See "HUD-1 Statement".

Sewer Scope Inspection: An inspection using a specialized camera to evaluate the interior condition of underground sewer lines. It may identify blockages, cracks, root intrusion, deterioration or other defects affecting wastewater drainage.

Short Sale: When a homeowner is "upside-down" in the market and must sell a home in which he owes more to the lending institution than the home is currently worth. The borrower's bank must approve the lower than owed listing price before the owner can proceed with the sale. "Short" refers to the financial gap, not the speed at which this process will occur. The total transaction timeframe is often anything but "short".

Shutters (Hurricane Protection): Protective coverings installed over windows, doors and other openings to reduce damage from windborne debris during severe storms. Common types include accordion shutters, roll-down shutters, removable panels and approved fabric systems. Qualifying protection must meet applicable standards and installation requirements.

Special Assessment: An additional charge levied by a condominium or homeowners association to cover expenses not adequately funded through regular assessments or existing reserves.

Structural Engineering Inspection: An assessment performed by a qualified structural engineer to evaluate the condition and integrity of building components such as foundations, columns, beams, load-bearing walls, balconies and other structural systems.

Structural Integrity Reserve Study (SIRS): A study required for certain Florida condominium and cooperative buildings that evaluates specified structural and building components, estimates future repair or replacement costs and establishes recommended reserve funding.

Subdivision: A tract of land that is divided into individual lots for the construction of single-family residences to be sold or leased.

Substantial Improvement: Under floodplain management regulations, improvements to a structure that meet or exceed a specified percentage, commonly 50%, of the structure's market value before the improvements begin. When the threshold is met, the building may be required to comply with current floodplain construction standards. Local rules and applicable exceptions should be verified.

Subterranean Termite Inspection: An inspection for termites that typically live in soil and travel through underground tunnels or mud tubes to reach wood and other cellulose materials. Subterranean termites can cause significant structural damage and may be difficult to detect without a professional inspection.

Survey: A map or drawing prepared by a licensed surveyor that illustrates the exact legal property boundaries. Other features will be shown including physical structures, easements, or improvements.

Sweat Equity: A term that refers to improvements to a property by labor efforts not paid in cash.

T

Tax Lien: When the owner fails to pay their taxes, the government can legally place a lien against the property.

Tenancy in Common: A form of property ownership in which two or more individuals hold separate ownership interests that may be unequal. An owner's interest generally passes through their estate rather than automatically to the surviving co-owners.

Tenancy by the Entireties: A form of joint property ownership available to married spouses in Florida that generally includes survivorship rights and certain protections from creditors.

Title: Ownership of the property recognized by law.

Title Company: A company that insures clear title to a property by examining title history and other liens.

Title Insurance: Protects both mortgagor with a lender's policy or the buyer with an owner's policy from losses that may occur over the dispute of property ownership.

Title Search: Usually conducted by the title company, this search looks into title records to ensure that the property seller legally owns the property and it is free from any claims or liens.

Transfer of Homestead Assessment Difference (Portability): A Florida property tax provision that allows eligible homeowners to transfer some or all of their accumulated Save Our Homes assessment benefit from a previous homestead to a new qualifying homestead, subject to statutory limits.

Transfer Tax: This tax is triggered when property passes from one owner to another. This can be a State or Local tax.

TRIM Notice (Truth in Millage): An annual notice sent to Florida property owners showing property values, proposed property taxes, millage rates and information about public budget hearings. It is not a property tax bill.

Trustee: A fiduciary (an individual) trusted to hold or control property for the benefit of another individual(s).

Truth in Millage: See TRIM Notice

U

Under Contract: The seller has accepted a buyer's offer, but the property has not closed yet. The property may be Pending or Under Contract with Contingencies.

Underwriting: This process determines the risk to the lender by evaluating the borrower's loan application to analyze the buyer's credit and the value of the property in question.

Unsecured Loan: Any loan that is not backed by collateral.

V

VA Loan: A loan made by private lenders and backed by the government designed specifically for veterans and their spouses. VA stands for Veteran's Administration. For more loan information visit the U.S. Government's Consumer Financial Protection Bureau.

W

Walkthrough: Conducted shortly before the home closes, this is a final review of the property prior to the sale. It is a time to confirm the completion of agreed-upon repairs and or items to remain with the property after closing.

Water Intrusion Inspection: An investigation of moisture entering a building through roofs, windows, doors, walls, foundations or plumbing systems. Inspectors may use moisture meters, infrared imaging and other diagnostic methods to identify potential sources and affected areas.

Wind-Borne Debris Region: An area designated under applicable building codes where exterior openings may require protection from windborne debris. Requirements depend on geographic location, design wind speed, exposure and applicable code provisions.

Wind Exposure Category: A classification used in structural wind-load calculations to describe the surrounding terrain and its effect on wind forces. Exposure categories account for conditions such as densely developed areas, open terrain and unobstructed coastal environments. The assigned category can affect building design requirements and construction costs.

Wind Mitigation Inspection: An inspection documenting construction features that may reduce windstorm damage, such as roof attachments, roof shape, opening protection and other structural characteristics. Qualifying features may affect insurance premiums.

Wind Mitigation Report: A standardized inspection report documenting construction features that may reduce hurricane and windstorm damage. Florida insurance companies may use qualifying features, such as roof-to-wall connections, roof geometry and opening protection, to determine available wind mitigation discounts.

Windstorm Insurance: Property insurance coverage for damage caused by wind events, including hurricanes, subject to policy terms, exclusions and deductibles.

Wood-Destroying Organism (WDO) Inspection: An inspection performed by a properly licensed pest control professional to identify visible evidence of wood-destroying organisms, including subterranean termites, drywood termites and certain wood-decaying fungi. In Florida, a formal WDO report documents findings within the inspection's defined scope and limitations.

Z

Zestimate: Coined by the real estate portal Zillow, this is an algorithm designed to estimate property value. The Zestimate is a relative guide. Determining the most accurate value of a property requires an onsite visit and local expertise. The Zestimate is far more reliable in a commodity market such as a large neighborhood of similar homes or condos. Learn more about Zillow Zestimate and how it is derived.