Florida Real Estate Glossary

A condensed history of all recorded documents affecting a parcel of land, used to determine the state of title.

A property tax based on the assessed value of the property. "Ad valorem" means "according to value" in Latin.

A legal relationship in which one party (agent) acts on behalf of another (principal) with the principal's consent.

The gradual repayment of a loan through scheduled payments of principal and interest over time.

An estimate of a property's market value performed by a licensed or certified appraiser.

The value placed on a property by the county property appraiser for ad valorem tax purposes.

A large lump-sum payment due at the end of a loan term after a series of smaller installments.

The illegal practice of inducing homeowners to sell by suggesting that minorities are moving into the neighborhood. Violates the Fair Housing Act.

The business of bringing buyers and sellers (or landlords and tenants) together in exchange for a commission.

The rate of return on a real estate investment property, calculated as NOI ÷ Property Value.

The chronological sequence of historical transfers of title to a property from one owner to the next.

Any outstanding claim or encumbrance that might impair the owner's ability to convey clear title.

A five-page form provided by the lender at least 3 business days before closing, detailing final loan terms and costs.

A non-appraisal valuation tool used by real estate licensees to estimate a property's market value using recent comparable sales.

Something of value exchanged between parties that makes a contract legally binding (e.g., money, a promise).

A condition that must be met for a real estate contract to become binding (e.g., financing contingency, inspection contingency).

A mortgage not insured or guaranteed by a government agency. Typically requires 20% down to avoid PMI.

A written legal document used to transfer title (ownership) of real property from grantor to grantee.

A security instrument used in some states in place of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.

A mortgage clause stating that the borrower will receive clear title once the loan is fully repaid.

A loss in property value. For tax purposes, IRS allows straight-line depreciation over 27.5 years (residential) or 39 years (commercial).

Prepaid interest paid to the lender at closing to reduce the loan's interest rate. One point = 1% of the loan amount.

When a broker or agent represents both the buyer and the seller in the same transaction. Florida requires written consent from both parties.

A good-faith deposit made by the buyer when submitting an offer; applied to the purchase price at closing.

A non-possessory right to use another person's land for a specific purpose (e.g., utility easement, right-of-way).

The government's power to take private property for public use, with just compensation paid to the owner. Results in condemnation.

Any claim, lien, charge, or liability attached to real property that may lessen its value (e.g., easements, mortgages, restrictions).

The right to obtain legal title upon full payment; the interest a buyer holds under a land contract.

The government's power to take title to property when the owner dies without a will and has no heirs.

Federal law (1968) prohibiting discrimination in the sale, rental, or financing of housing based on race, color, national origin, religion, sex, familial status, or disability.

A mortgage insured by the Federal Housing Administration, allowing lower down payments (as low as 3.5%) for qualified buyers.

The legal obligation of an agent to act in the best interest of their principal. Includes loyalty, obedience, disclosure, confidentiality, accounting, and reasonable care (LODCAR).

Personal property that has been permanently attached to land or a building and is legally considered real property.

Florida Real Estate Commission — the state body that licenses and regulates real estate brokers and sales associates in Florida.

A deed in which the grantor guarantees the title against all defects and encumbrances, including those arising before the grantor's ownership.

A quick valuation tool: Sale Price ÷ Gross Monthly Rent. Lower GRM = better value for investors.

Florida law exempting the first $25,000 of a primary residence's assessed value from all taxes, and an additional $25,000 from non-school taxes (for values $50K–$75K).

A standard form used to itemize all charges for buyers and sellers in real estate closings involving federally related mortgage loans (now largely replaced by the Closing Disclosure).

Co-ownership with right of survivorship. All tenants hold equal, undivided shares. Requires the four unities: time, title, interest, and possession (TTIP).

A court-ordered lien on a debtor's property arising from a lawsuit. Attaches to all real property owned by the debtor in the county.

A legal claim against a property used as security for a debt. Must be satisfied before title can transfer free and clear.

A recorded notice that a lawsuit has been filed affecting a specific parcel of real estate.

Loan Amount ÷ Appraised Value. Lenders use this to assess lending risk. Higher LTV = more risk = often requires PMI.

The property tax rate expressed in mills (1 mill = $1 per $1,000 of assessed value). Tax = Assessed Value × (Millage ÷ 1,000).

A cooperative database used by real estate brokers to share information about listed properties.

A legal instrument that pledges real property as collateral for a loan. The borrower retains title while the lender holds a security interest.

A listing in which the seller receives a set net amount from the sale and the broker keeps anything above it as commission. Illegal in Florida.

Effective Gross Income minus operating expenses (not including debt service). The core metric in income-property valuation.

A legal land use that existed before current zoning regulations and is allowed to continue, but cannot be expanded.

Principal, Interest, Taxes, and Insurance — the four components of a typical monthly mortgage payment.

Insurance required by lenders when LTV exceeds 80%, protecting the lender if the borrower defaults.

The government's authority to regulate land use to protect public health, safety, and welfare — the basis for zoning, building codes, and environmental regulations. No compensation is paid.

The division of ongoing expenses (taxes, rent, HOA fees) between buyer and seller at closing based on the number of days each party owns the property.

A deed that transfers only the interest the grantor currently holds, with no warranties. Commonly used to clear title defects or transfer between family members.

Real Estate Settlement Procedures Act — federal law requiring disclosure of settlement costs and prohibiting kickbacks in residential mortgage transactions.

The illegal practice of denying or limiting financial services to residents of certain areas based on race or national origin.

The right of a borrower to reclaim property by paying off debt before or after foreclosure.

Florida constitutional amendment (Amendment 10) capping the annual increase of a homesteaded property's assessed value at 3% or the CPI, whichever is lower.

A tax levied on specific properties that benefit from a public improvement (e.g., new sidewalks, sewer lines).

A law requiring certain contracts — including real estate purchase contracts and leases over one year — to be in writing to be enforceable.

The illegal practice of directing buyers or renters toward or away from specific neighborhoods based on protected class characteristics.

A form of co-ownership available only to married couples in Florida, with right of survivorship. Neither spouse can convey their interest without the other's consent.

Co-ownership where each party holds an undivided interest that can be unequal and is inheritable. No right of survivorship.

Truth in Lending Act — federal law requiring lenders to disclose the APR, total loan costs, and other key terms in writing before closing.

Insurance protecting against losses from defects in title (e.g., undiscovered liens, forgery, errors in public records). Owner's and lender's policies are separate.

A mortgage guaranteed by the U.S. Department of Veterans Affairs. Allows eligible veterans and service members to purchase with no down payment and no PMI.

An exception to zoning requirements granted to a property owner due to hardship. Requires approval from the local zoning board.

Government regulation dividing land into zones (residential, commercial, industrial, etc.) specifying permitted uses. An exercise of police power.