Florida residential real estate · First edition, 2026

The vocabulary of a Florida home sale, in plain English

Buying or selling a home is one of the largest financial decisions most people ever make, and the language around it is not written for the people making it. This is a working glossary of the terms you are most likely to meet in a Florida residential transaction, each one explained in everyday words.

94 terms Compiled by Jennifer Mitchell, Broker JM Distinctive Properties

A B C D E F G H I J L M O P R S T U V W Y Z

94 terms

How to use this guide

Entries run A to Z. Each one answers the same three questions: what the term means, why it matters in a real transaction, and an example of it happening. Where an entry connects to another, you will find the related terms at the end of it.

A 12

Abstract of Title

What it means

An Abstract of Title is a historical summary of the public records affecting ownership of a property. It may include previous owners, deeds, mortgages, easements, liens, court actions, and other recorded documents.

Why it matters

Although title insurance has largely replaced traditional abstracts in many Florida real estate transactions, older properties or certain circumstances may still require one to help establish the property’s ownership history.

Example

A buyer purchasing an older Florida home may encounter an abstract of title if the property’s ownership history extends back many decades.

Acceleration Clause

What it means

An Acceleration Clause allows a lender to require immediate repayment of the remaining loan balance if the borrower fails to meet certain conditions of the mortgage, such as missing payments.

Why it matters

This provision helps protect lenders by allowing them to require repayment of the remaining loan balance if the borrower fails to meet the terms of the mortgage.

Example

If a homeowner stops making mortgage payments for an extended period, the lender may accelerate the loan and begin foreclosure proceedings.

See also: Default, Foreclosure, Mortgage

Addendum

What it means

An Addendum is a written document that adds to or changes part of an existing contract without replacing the original agreement.

Why it matters

Real estate contracts often include additional terms or changes that are documented through addenda.

Example

A buyer and seller may sign an addendum extending the inspection period by several days.

Adjustable-Rate Mortgage (ARM)

What it means

An Adjustable-Rate Mortgage is a home loan with an interest rate that may change after an initial fixed-rate period.

Why it matters

Monthly mortgage payments may increase or decrease as interest rates change.

Example

A buyer may choose a 5-year ARM because it offers a lower initial interest rate than a traditional fixed-rate mortgage.

Additional Insured

What it means

An Additional Insured is a person or organization added to another party’s insurance policy who receives certain coverage under that policy.

Why it matters

This is commonly seen during construction projects or when contractors perform work on a property.

Example

A homeowner may request to be listed as an additional insured on a contractor’s liability policy while major renovations are underway.

See also: Homeowners Insurance, Liability Insurance

Amortization

What it means

Amortization is the process of gradually paying off a loan through scheduled monthly payments that include both principal and interest.

Why it matters

Early mortgage payments typically include more interest than principal, while later payments gradually apply more toward the loan’s principal balance.

Example

A standard 30-year mortgage follows an amortization schedule that reduces the loan balance over time.

Appraisal

What it means

An Appraisal is a professional opinion of a property’s market value prepared by a state-licensed or state-certified appraiser.

Why it matters

Most lenders require an appraisal before approving a mortgage to help ensure the property’s market value supports the loan amount.

Example

If a buyer agrees to purchase a home for $650,000 but the appraisal comes in at $620,000, the parties may need to renegotiate the price or financing.

Appraiser

What it means

An Appraiser is a licensed professional who estimates the market value of real property using accepted appraisal methods.

Why it matters

Lenders rely on appraisals to evaluate lending risk, while buyers and sellers often use them to better understand market value.

Example

The lender hires an independent appraiser—not the buyer or seller—to prepare the appraisal report.

Appreciation

What it means

Appreciation is an increase in a property’s value over time.

Why it matters

Property values may increase because of market conditions, neighborhood improvements, limited housing supply, renovations, or other factors.

Example

A home purchased several years ago may appreciate significantly if demand increases within the community.

As-Is

What it means

“As-Is” means the seller is offering the property in its current condition without agreeing to make repairs, unless the parties negotiate otherwise.

Why it matters

An “As-Is” sale does not prevent a buyer from conducting inspections. It simply means the seller is not obligated to make repairs, although the parties may still negotiate repairs, credits, or other terms depending on the contract.

Example

A buyer purchases an older Florida home “As-Is” but still completes inspections before deciding whether to proceed with the purchase.

Assessed Value

What it means

Assessed Value is the value assigned by the county property appraiser for property tax purposes.

Why it matters

Assessed value is not necessarily the same as market value or appraised value.

Example

A home’s market value may be higher than its assessed value because each serves a different purpose.

Assignment

What it means

An Assignment transfers certain contractual rights or obligations from one party to another, when permitted by the agreement.

Why it matters

Not all contracts allow an Assignment. Buyers and sellers should review the Purchase Contract carefully to determine whether assignment is permitted and under what conditions.

Example

An investor may assign certain contractual rights to another buyer if the contract permits.

B 5

Balloon Mortgage

What it means

A Balloon Mortgage requires relatively small monthly payments for a period of time, followed by one large final payment.

Why it matters

Borrowers should understand when the final payment is due and whether they will need to pay off or refinance the remaining loan balance.

Example

A buyer obtains a seven-year Balloon Mortgage with lower monthly payments. At the end of the seven years, the remaining loan balance becomes due in one lump-sum payment unless the borrower pays it off or refinances the loan.

Breach of Contract

What it means

A Breach of Contract occurs when one party fails to perform a requirement contained in a legally binding agreement.

Why it matters

Depending on the circumstances, a breach may allow the other party to pursue remedies provided by the contract or permitted under applicable law.

Example

A buyer who fails to deliver required funds or otherwise meet a contractual obligation by the contractual deadline without an approved extension may be considered in breach of the contract.

Broker

What it means

A Broker is a real estate professional who has completed additional education, licensing, and legal requirements beyond those required for a sales associate.

Why it matters

In Florida, brokers may own brokerage companies, supervise sales associates, and are responsible for brokerage operations.

Example

Every Florida real estate sales associate must work under the supervision of a licensed broker.

See also: Brokerage Agreement, Fiduciary Duties, Sales Associate, Single Agent, Transaction Broker

Brokerage Agreement

What it means

A Brokerage Agreement is a written contract between a real estate brokerage and a client that establishes the brokerage relationship, outlines the services to be provided, and explains the rights and responsibilities of each party.

Why it matters

A Brokerage Agreement helps both parties understand the type of representation being provided, the broker’s duties, the client’s obligations, and any agreed-upon compensation or other terms.

Example

Before showing homes, a buyer signs a Brokerage Agreement establishing a Transaction Broker relationship with the real estate brokerage. See also Buyer Representation Agreement, Listing Agreement, No Brokerage Relationship, Single Agent, Transaction Broker. ⸻

Business Days

What it means

Business Days generally refer to normal working days and usually exclude weekends and certain holidays. The exact definition depends on the contract, law, or document involved.

Why it matters

Many contractual deadlines are calculated using business days rather than calendar days.

Example

A document due within three Business Days may have a different deadline than one due within three Calendar Days.

Calendar Days

What it means

Calendar Days include every day on the calendar, including weekends and holidays, unless a contract specifically states otherwise.

Why it matters

Understanding whether a deadline is measured in Calendar Days or Business Days can help prevent missed contractual deadlines.

Example

An inspection period of ten calendar days continues counting weekends.

Capital Gains

What it means

Capital Gains generally refer to the profit realized from selling an asset for more than its original purchase price.

Why it matters

The sale of a home may have capital gains tax implications depending on an owner’s individual circumstances and applicable tax laws.

Example

Some homeowners may qualify for certain tax exclusions when selling a primary residence, while others may not.

Clear Title

What it means

Clear Title means a property’s ownership is free from unresolved ownership disputes, undisclosed liens, or other issues that could interfere with transferring ownership.

Why it matters

Most buyers and lenders require clear title before a real estate transaction can close.

Example

The title company works to resolve outstanding issues before the property can be transferred to the new owner.

See also: Title Company, Title Insurance, Lien

Closing

What it means

Closing is the final step in a real estate transaction when required documents are signed, funds are transferred, and ownership is officially conveyed to the buyer.

Why it matters

Once all contractual requirements have been satisfied and the transaction closes, the buyer becomes the new owner of the property.

Example

On closing day, the buyer signs the loan documents, the seller signs the deed, funds are disbursed, and ownership is transferred according to the terms of the transaction.

See also: Closing Costs, Deed, Title Company

Closing Costs

What it means

Closing Costs are the various fees and expenses associated with completing a real estate transaction.

Why it matters

Closing costs may include lender fees, title services, recording fees, prepaid expenses, insurance, taxes, government fees, and other transaction-related costs.

Example

Both buyers and sellers typically have closing costs, although the types of expenses may differ.

D 8

Days on Market (DOM)

What it means

Days on Market (often abbreviated DOM) is the number of calendar days a property has been actively listed for sale in the Multiple Listing Service (MLS) before going under contract or being removed from the market.

Why it matters

Many buyers and sellers look at Days on Market to better understand market activity. A home that sells quickly may indicate strong buyer demand, while a property with a longer marketing time may prompt additional questions about its pricing, condition, location, or current market conditions.

Example

A home listed for 18 days before accepting an offer has a Days on Market (DOM) of 18 days.

See also: Market Value, Multiple Listing Service (MLS), Pending, Active Listing

Deed

What it means

A Deed is the legal document used to transfer ownership of real property from one owner to another.

Why it matters

Signing a purchase contract alone does not transfer ownership. The deed must be properly executed and delivered, and typically recorded, in accordance with Florida law.

Example

At closing, the seller signs the deed that transfers ownership of the property to the buyer.

See also: Closing, Clear Title, Title Company

Deed in Lieu of Foreclosure

What it means

A Deed in Lieu of Foreclosure is an agreement in which a homeowner voluntarily transfers ownership of the property to the lender rather than going through the foreclosure process.

Why it matters

This option may be available in certain financial hardship situations, although it is not appropriate for every circumstance and requires the lender’s approval.

Example

After discussing available options with the lender, a homeowner may agree to transfer the property to the lender through a deed in lieu rather than proceeding with foreclosure.

See also: Default, Foreclosure, Mortgage

Default

What it means

A Default occurs when a party fails to meet an obligation required by a contract or loan agreement.

Why it matters

A default may involve missed mortgage payments, failure to meet contractual deadlines, or failing to perform other obligations required by an agreement.

Example

A borrower who stops making mortgage payments may eventually be considered in default under the loan documents.

Depreciation

What it means

Depreciation is a decrease in a property’s value over time due to age, wear and tear, deferred maintenance, changing market conditions, or other factors.

Why it matters

Not every property increases in value over time. Condition, location, and the local real estate market all influence a property’s value.

Example

A home requiring extensive repairs may experience depreciation compared to similar well-maintained properties.

Disclosure

What it means

A Disclosure is information that one party is legally or contractually required to provide to another during a real estate transaction.

Why it matters

Florida law requires sellers to disclose certain known facts that materially affect the value of a residential property and are not readily observable.

Example

A seller should disclose a previous roof leak that has been repaired if the issue materially affects the property’s value.

Down Payment

What it means

A Down Payment is the portion of the purchase price that the buyer pays from their own funds rather than borrowing through a mortgage loan.

Why it matters

The required down payment varies depending on the loan program, lender requirements, the property’s purchase price, and the buyer’s qualifications.

Example

A buyer purchasing a $500,000 home with a 20% down payment contributes $100,000 and finances the remaining balance through a mortgage.

Due Diligence

What it means

Due Diligence is the process of carefully investigating a property before completing the purchase.

Why it matters

Buyers may review inspections, insurance availability, financing, association documents, surveys, permits, zoning information, title matters, and other items before deciding whether to proceed.

Example

A buyer spends the inspection period reviewing the property’s condition, obtaining insurance quotes, reviewing relevant documents, and confirming financing.

E 7

Earnest Money Deposit

What it means

An Earnest Money Deposit is money a buyer offers to demonstrate good faith and a serious intent to purchase the property.

Why it matters

The deposit is generally held by an escrow agent until closing or until the contract is otherwise terminated according to its terms.

Example

A buyer delivers a $10,000 Earnest Money Deposit within the time required by the purchase contract..

Easement

What it means

An Easement gives someone the legal right to use a portion of another person’s property for a specific purpose without owning it.

Why it matters

Utility companies, municipalities, and neighboring property owners may have easement rights that limit how certain portions of a property may be used or developed.

Example

A utility easement allows an electric company to access power lines located on private property.

See also: Survey, Title Insurance, Clear Title

Effective Date

What it means

The Effective Date is the date on which the last party signs or initials the final accepted version of the contract and the signed contract is delivered (communicated) to the other party. It is the official date the contract becomes binding, unless the contract states otherwise.

Why it matters

Many important contractual deadlines are calculated from the Effective Date, including inspection periods, financing deadlines, title review, and the closing date. Knowing the Effective Date helps buyers and sellers understand when their contractual obligations begin and when important deadlines must be met.

Example

The buyer signs the contract on Monday. The seller signs the final accepted version on Wednesday, and the fully executed contract is delivered to the buyer’s agent that same day. The Effective Date is Wednesday, and all contractual deadlines begin to run from that date.

See also: Calendar Days, Business Days, Contract, Time Is of the Essence

Equity

What it means

Equity is the difference between a property’s current market value and the amount still owed on any mortgages or liens against it.

Why it matters

As mortgage balances decrease, property values increase, or both, homeowners may build equity over time.

Example

If a home is worth $700,000 and the mortgage balance is $400,000, the homeowner has approximately $300,000 in equity.

Escrow

What it means

Escrow refers to money, documents, or other items held by a neutral third party until the conditions of a contract have been met.

Why it matters

Escrow helps protect both buyers and sellers by ensuring that funds and documents are handled according to the terms of the agreement.

Example

The buyer’s Earnest Money Deposit is placed into an escrow account until closing or otherwise disbursed according to the terms of the contract.

See also: Earnest Money Deposit, Closing, Title Company, Escrow Agent

Escrow Account

What it means

An Escrow Account is an account used to hold money for specific purposes, such as contract deposits, property taxes, or homeowners insurance.

Why it matters

Many mortgage lenders collect a portion of annual property taxes and homeowners insurance premiums with each monthly mortgage payment and pay those bills when they become due.

Example

A homeowner’s monthly mortgage payment may include principal, interest, property taxes, and homeowners insurance, with the taxes and insurance collected through an escrow account.

See also: Escrow, Mortgage, Property Taxes

Estoppel Certificate

What it means

An Estoppel Certificate is a document provided by a homeowners’ association (HOA) or condominium association that states the current financial obligations and other important information related to a property. It may include unpaid assessments, outstanding violations, pending special assessments, transfer fees, and other information affecting the property.

Why it matters

Before closing, buyers and lenders often rely on the Estoppel Certificate to verify the property’s financial status with the association. It helps identify unpaid assessments, violations, transfer fees, special assessments, or other obligations that may need to be resolved before ownership transfers.

Example

A buyer is purchasing a home in a homeowners’ association. Before closing, the association issues an Estoppel Certificate showing the seller owes two months of unpaid assessments. Those amounts are paid at closing so the buyer takes ownership without those outstanding obligations.

See also: Homeowners’ Association (HOA), Special Assessment, Closing, Condominium Association

F 4

Fiduciary Duties

What it means

Fiduciary Duties are the heightened duties a real estate professional owes to a client in a Single Agent relationship. In Florida, these include loyalty, confidentiality, obedience, full disclosure, accounting for funds, and using skill, care, and diligence.

Why it matters

Fiduciary Duties require the Single Agent to place the client’s interests above the agent’s own interests while following lawful instructions and protecting confidential information.

Example

A broker representing a seller as a Single Agent must disclose material information, protect the seller’s confidential negotiating position, and present offers and counteroffers in a timely manner.

See also: Single Agent, Brokerage Relationship, Transaction Broker, Non-Brokerage Agreement

Fixed-Rate Mortgage

What it means

A Fixed-Rate Mortgage is a home loan with an interest rate that remains the same for the entire loan term.

Why it matters

Because the interest rate does not change, the principal and interest payment remains consistent throughout the loan term.

Example

Many buyers choose a 30-year fixed-rate mortgage because of its predictable monthly payments.

Flood Insurance

What it means

Flood Insurance is a separate insurance policy that helps protect against damage caused by flooding.

Why it matters

Standard homeowners insurance policies generally do not cover flood damage. For some Florida properties, lenders require flood insurance as a condition of financing.

Example

A buyer purchasing a home in a designated flood zone may be required by the lender to obtain flood insurance before closing.

Foreclosure

What it means

Foreclosure is the legal process through which a lender seeks to recover the balance of a mortgage loan after a borrower fails to meet the obligations of the loan.

Why it matters

Foreclosure can result in the loss of home ownership and may significantly affect a person’s future borrowing opportunities.

Example

After an extended period of missed mortgage payments, the lender begins foreclosure proceedings.

G 2

Good Faith

What it means

Good Faith refers to acting honestly, fairly, and sincerely while carrying out the obligations of a contract.

Why it matters

Real estate transactions depend on cooperation, honest communication, and timely performance by all parties involved.

Example

A buyer acting in good faith promptly schedules inspections and delivers required documents within the agreed deadlines.

See also: Purchase Contract, Time Is of the Essence

Gross Living Area (GLA)

What it means

Gross Living Area (GLA) is the finished, above-grade living space within a home that is used to calculate its living area.

Why it matters

Not every enclosed area is included in Gross Living Area. Garages, unfinished spaces, and certain enclosed patios may be measured separately.

Example

A home’s advertised living area generally refers to its Gross Living Area rather than the total area under roof.

H 5

Hazard Insurance

What it means

Hazard Insurance is the portion of a homeowners insurance policy that helps protect the home against certain covered physical losses, such as fire, wind, and other covered hazards.

Why it matters

Most mortgage lenders require hazard insurance before closing on a home loan.

Example

Before closing, the buyer provides proof of hazard insurance to the lender.

Home Inspection

What it means

A Home Inspection is a visual examination of a property’s readily accessible systems and components performed by a licensed home inspector.

Why it matters

An inspection helps buyers better understand the property’s overall condition and identify potential repairs or maintenance concerns.

Example

The inspector evaluates the roof, electrical system, plumbing, air conditioning, structure, appliances, and other readily accessible components.

See also: Inspection, Inspection Period, As-Is

Homeowners Association (HOA)

What it means

A Homeowners Association (HOA) is an organization that manages and maintains certain common areas and enforces community rules within a residential development.

Why it matters

Homeowners in an HOA community typically pay regular assessments and agree to comply with the community’s governing documents.

Example

Before purchasing a home in an HOA community, buyers should review the association’s rules, fees, governing documents, and available financial information.

See also: Estoppel Certificate, Special Assessment, Condominium Association

Homeowners Insurance

What it means

Homeowners Insurance is a policy that helps protect a homeowner against certain covered losses involving the home and, in many cases, personal property and personal liability.

Why it matters

Coverage varies by policy. Buyers should carefully review the policy’s coverage, deductibles, exclusions, and optional endorsements before purchasing homeowners insurance.

Example

Most mortgage lenders require proof of homeowners insurance before closing.

Homestead Exemption

What it means

Florida’s Homestead Exemption is a property tax benefit that may reduce the taxable value of a qualifying primary residence and also provide certain legal protections under Florida law.

Why it matters

Many Florida homeowners may qualify for valuable property tax savings if they meet the eligibility requirements and file on time.

Example

A buyer who establishes a Florida property as their permanent residence may qualify to apply for the Florida Homestead Exemption through the county property appraiser.

I 5

Inspection

What it means

An Inspection is a professional evaluation of a property’s overall condition or of a specific system or component.

Why it matters

Inspections help buyers better understand the property’s condition before completing the purchase. Different types of inspections evaluate different systems, components, or potential concerns.

Example

A buyer may order a general home inspection, termite inspection, roof inspection, or sewer scope inspection depending on the property.

Inspection Period

What it means

The Inspection Period is the timeframe established in the purchase contract during which the buyer may conduct inspections and evaluate the property.

Why it matters

This period allows buyers to gather information and make informed decisions according to the terms of the purchase contract.

Example

During the Inspection Period, a buyer schedules inspections, reviews reports, and discusses any concerns with their real estate professional.

See also: As-Is, Home Inspection, Inspection

Interest

What it means

Interest is the cost paid for borrowing money from a lender.

Why it matters

Interest is one of the largest costs associated with financing a home purchase and directly affects the amount of a borrower’s monthly mortgage payment.

Example

A lower interest rate generally results in a lower monthly principal and interest payment.

See also: Interest Rate, Mortgage, Principal

Interest Rate

What it means

An Interest Rate is the percentage charged by a lender for borrowing money.

Why it matters

Even a small change in the Interest Rate can significantly affect monthly payments and the total amount paid over the life of a loan.

Example

Two buyers purchasing similar homes may have different monthly principal and interest payments because they qualified for different interest rates.

Investment Property

What it means

An Investment Property is real estate purchased primarily to generate rental income, future appreciation, or both.

Why it matters

Investment properties often have different financing requirements, insurance needs, lending guidelines, and tax considerations than owner-occupied homes.

Example

A buyer purchases a condominium with the intention of renting it to tenants rather than using it as a primary residence.

See also: Appreciation, Mortgage, Rental Property

J 1

Joint Tenancy

What it means

Joint Tenancy is a form of property ownership in which two or more people own the property together. Depending on how title is held and applicable state law, survivorship rights may apply.

Why it matters

The way title is held can affect ownership rights, inheritance, estate planning, and what happens to the property after an owner’s death.

Example

A married couple may choose one form of ownership, while business partners or family members may choose another.

Lease Back (Rent Back)

What it means

A Lease Back (also commonly called a Rent Back) is a written agreement that allows the seller to remain in the property for an agreed-upon period after closing by leasing the home from the new owner. The agreement typically outlines the occupancy period, rent (if any), security deposit, utilities, maintenance responsibilities, insurance requirements, and the date the seller must vacate the property.

Why it matters

A Lease Back can provide flexibility when a seller needs additional time to move after closing or is waiting for another home to become available. Because ownership transfers to the buyer at closing, the agreement should clearly define each party’s rights, responsibilities, occupancy period, insurance obligations, and financial terms.

Example

The sale closes on June 30, but the seller’s new home will not be ready until July 15. The buyer agrees to a 15-day Lease Back (Rent Back), allowing the seller to remain in the home under the terms of a written agreement before moving into the new property.

See also: Closing, Possession, Post-Closing Occupancy

Lender

What it means

A Lender is a financial institution or other organization that provides financing to borrowers to purchase or refinance real estate.

Why it matters

The lender evaluates the borrower’s financial qualifications before deciding whether to approve a mortgage loan.

Example

Banks, credit unions, and mortgage companies all serve as lenders.

See also: Loan Approval, Mortgage, Mortgage Broker

Lien

What it means

A Lien is a legal claim against a property that helps secure payment of a debt or other obligation.

Why it matters

Liens generally must be resolved before a property can be transferred with Clear Title.

Example

Unpaid property taxes or unpaid contractor invoices may result in liens against a property.

See also: Clear Title, Property Taxes, Title

Listing Agreement

What it means

A Listing Agreement is a contract between a property owner and a real estate brokerage authorizing the brokerage to market and sell the property.

Why it matters

The agreement outlines the responsibilities of both the seller and the brokerage, including the listing price, listing term, marketing, and other important terms.

Example

Before a home is advertised for sale, the seller signs a Listing Agreement with the brokerage.

See also: Broker, Multiple Listing Service (MLS), Seller’s Market

Loan Approval

What it means

Loan Approval is the lender’s decision that a borrower qualifies for financing, subject to the lender’s requirements, conditions, and final verification.

Why it matters

Loan Approval helps buyers understand the price range they may qualify for and demonstrates financial readiness when making an offer.

Example

A buyer obtains Loan Approval before beginning an active home search.

See also: Lender, Mortgage, Pre-Approval

Loan Estimate

What it means

A Loan Estimate is a standardized document provided by a lender that outlines estimated loan terms, monthly payments, closing costs, and other key financing details.

Why it matters

It allows buyers to compare loan offers and estimated costs from different lenders.

Example

A buyer reviews Loan Estimates from two lenders before deciding which financing option best meets their needs.

See also: Closing Costs, Lender, Mortgage

M 5

Market Value

What it means

Market Value is the estimated price a property would likely sell for under normal market conditions between a willing buyer and a willing seller, with neither being under undue pressure to buy or sell.

Why it matters

Market value is influenced by location, condition, recent comparable sales, supply and demand, and current market trends.

Example

A home’s Market Value may differ from its assessed value or the amount originally paid for the property.

See also: Appraisal, Assessed Value, Comparable Sales

Master Insurance Policy

What it means

A Master Insurance Policy is the insurance policy maintained by a condominium or homeowners association that generally provides coverage for the building and certain common areas, as described in the association’s governing documents and insurance policy.

Why it matters

The Master Insurance Policy may not cover everything inside an individual unit. Buyers should understand what the association’s policy covers and what must be insured through their own insurance policy.

Example

A condominium association’s Master Insurance Policy may insure the building’s exterior and common areas, while the unit owner’s HO-6 Insurance may provide coverage for certain interior portions of the unit, personal property, and personal liability.

Material Fact

What it means

A Material Fact is information that could reasonably influence a buyer’s decision to purchase a property or affect the price the buyer is willing to pay.

Why it matters

Florida law requires sellers to disclose certain known Material Facts that are not readily observable and that materially affect the property’s value.

Example

Known structural damage or recurring water intrusion may be Material Facts that require disclosure.

Mortgage

What it means

A Mortgage is a loan used to finance the purchase of real property, with the property serving as collateral for the loan.

Why it matters

Most homebuyers use mortgage financing rather than paying the full purchase price in cash, making the mortgage one of the most important parts of the home-buying process.

Example

A buyer obtains a 30-year Mortgage to finance the purchase of a new home.

Multiple Listing Service (MLS)

What it means

he Multiple Listing Service (MLS) is a cooperative database used by participating real estate professionals to share property listings and other property information.

Why it matters

The MLS increases exposure for listed properties and helps cooperating real estate professionals locate available homes for buyers.

Example

Once a property is entered into the MLS, participating real estate professionals can search for and show the home to qualified buyers.

See also: Days on Market (DOM), Listing Agreement, Pending, Active Listing

O 1

Offer

What it means

An Offer is a written proposal from a buyer to purchase a property under specific terms and conditions.

Why it matters

An offer includes important details such as the purchase price, financing terms, deposits, closing date, and contingencies.

Example

After viewing several homes, a buyer submits an Offer on the property they wish to purchase.

See also: Effective Date, Purchase Contract, Counteroffer

P 5

Pending

What it means

Pending means the seller has accepted an Offer and the transaction is moving toward Closing, although ownership has not yet transferred.

Why it matters

A property with a Pending status is generally no longer available for new offers unless the existing purchase contract is terminated.

Example

A property changes from Active to Pending after the buyer and seller enter into a fully executed Purchase Contract.

See also: Closing, Purchase Contract, Active Listing

Pre-Approval

What it means

A Pre-Approval is a lender’s preliminary evaluation indicating that a buyer appears to qualify for a mortgage up to a certain amount, subject to final underwriting and property approval.

Why it matters

Many sellers prefer Offers from buyers who have already obtained a Pre-Approval because it demonstrates financial readiness.

Example

A buyer obtains Pre-Approval before beginning to tour homes.

See also: Lender, Loan Approval, Mortgage

Principal

What it means

Principal is the amount borrowed on a loan or the remaining unpaid balance, excluding interest.

Why it matters

Each mortgage payment typically pays both Principal and Interest, gradually reducing the loan balance over time.

Example

As the Principal balance decreases over time, the homeowner generally builds equity.

See also: Amortization, Equity, Interest, Mortgage

Property Taxes

What it means

Property Taxes are taxes assessed by local government agencies based on the taxable value of real property, as determined under applicable law.

Why it matters

Property taxes help fund public services such as schools, roads, parks, libraries, and emergency services.

Example

Many homeowners pay Property Taxes monthly through their mortgage Escrow Account.

Purchase Contract

What it means

A Purchase Contract is the written agreement between a buyer and a seller that outlines the terms and conditions of the real estate transaction.

Why it matters

The contract establishes the rights, responsibilities, deadlines, and obligations of both parties.

Example

Once signed by both the buyer and seller and the last signed copy is delivered in accordance with the contract, the Purchase Contract becomes legally binding, subject to its terms.

See also: Addendum, Closing, Effective Date, Offer

R 4

Real Property

What it means

Real Property includes the land itself and anything permanently attached to it, such as a home, garage, fence, driveway, or other permanent improvements.

Why it matters

Understanding what is considered Real Property helps clarify what is included in the sale of a home and what may be considered Personal Property.

Example

Built-in cabinets and permanently installed fixtures generally remain with the property unless the Purchase Contract states otherwise.

Recording

What it means

Recording is the process of officially filing certain legal documents in the county’s public records.

Why it matters

Recording helps establish the public record of ownership and other legal interests affecting Real Property.

Example

After Closing, the Deed is recorded in the county where the property is located.

Refinance

What it means

Refinancing (Refinancing or Refinance) is the process of replacing an existing Mortgage with a new loan.

Why it matters

Homeowners may refinance to obtain a lower or different Interest Rate, change the loan term, access home equity, or meet other financial goals.

Example

A homeowner refinances after Interest Rates decline to help reduce monthly mortgage payments.

See also: Equity, Interest Rate, Mortgage, Principal

Residential Property

What it means

Residential Property is real estate designed or intended primarily for people to live in.

Why it matters

Single-family homes, townhomes, condominiums, villas, duplexes, and other residential housing types are generally considered Residential Property.

Example

This guide focuses on Florida residential real estate transactions.

S 7

Sales Associate

What it means

A Sales Associate is a licensed real estate professional who works under the supervision of a licensed real estate broker.

Why it matters

Florida law requires Sales Associates to perform licensed real estate activities through their supervising broker.

Example

A Sales Associate helps buyers and sellers throughout the transaction while working under the supervision of their broker.

Seller Disclosure

What it means

A Seller Disclosure is information provided by the seller regarding known conditions or Material Facts that may materially affect the property’s value.

Why it matters

Providing accurate Seller Disclosures helps buyers make informed decisions and promotes transparency throughout the transaction.

Example

A seller discloses that the roof was previously repaired after storm damage and provides any known information about the repairs.

Settlement Statement

What it means

A Settlement Statement is the document that summarizes the financial details of a real estate closing transaction.

Why it matters

It lists the purchase price, deposits, loan proceeds, taxes, fees, credits, and the final amount due from or payable to each party at Closing.

Example

Both the buyer and seller review the Settlement Statement before completing the Closing.

Showing Agreement

What it means

A Showing Agreement is a written agreement between a buyer and a real estate brokerage that authorizes the brokerage to show one or more properties. The agreement may apply to a single property, multiple properties, or a specified period and explains the brokerage relationship, services, compensation, and other agreed-upon terms.

Why it matters

The agreement helps buyers understand whom the real estate professional represents, which properties or time period the agreement covers, and whether the buyer may be responsible for paying compensation. Buyers should carefully review the terms before signing the agreement.

Example

A buyer signs a Showing Agreement limited to one specific property. The agreement identifies the brokerage relationship and explains the compensation, if any, that may be owed if the buyer purchases that property.

See also: Broker, Single Agent, Compensation, Transaction Broker

Single Agent

What it means

A Single Agent is a real estate broker or sales associate who represents either the buyer or the seller with a fiduciary relationship. A Single Agent owes the client duties of loyalty, confidentiality, obedience, full disclosure, accounting, and skill, care, and diligence, as required by Florida law.

Why it matters

The type of brokerage relationship determines the duties a real estate professional owes to a buyer or seller. Understanding whether you are represented as a Single Agent helps clarify your rights and the level of representation you receive.

Example

A seller hires a real estate broker as a Single Agent to represent the seller’s interests throughout the listing, marketing, negotiation, and closing of the property.

Special Assessment

What it means

A Special Assessment is an additional fee charged by a homeowners or condominium association to help pay for major repairs, replacements, capital improvements, or unexpected expenses.

Why it matters

Special Assessments can significantly increase the cost of owning a property beyond regular association dues.

Example

An association approves a Special Assessment to replace aging roofs throughout the community.

See also: Homeowners Association (HOA), Estoppel Certificate, Condominium Association

Survey

What it means

A Survey is a drawing prepared by a licensed surveyor showing property boundaries, improvements, easements, encroachments, and other important features affecting the property.

Why it matters

A Survey helps buyers understand exactly what they are purchasing and may identify boundary or title issues requiring further review.

Example

Before Closing, the buyer reviews the Survey to confirm property boundaries and identify any easements.

T 4

Title

What it means

Title refers to the legal rights of ownership in a property.

Why it matters

A buyer wants to receive Clear Title so ownership can transfer without unresolved claims or legal issues.

Example

Before Closing, the title company verifies that the seller has the legal right to transfer ownership of the property.

Title Company

What it means

A Title Company helps facilitate many aspects of a real estate closing, including researching ownership records, issuing title insurance, coordinating documents, and assisting with the closing process.

Why it matters

The Title Company plays an important role in helping ensure ownership can be transferred with Clear Title according to the Purchase Contract.

Example

The Title Company coordinates with the buyer, seller, lender, and real estate professionals before Closing Day.

Title Insurance

What it means

Title Insurance helps protect property owners and lenders against certain losses resulting from covered title defects, ownership disputes, or other covered title issues that existed before the property was purchased.

Why it matters

Unlike most insurance policies that protect against future events, Title Insurance generally protects against covered title issues that already existed but were unknown at Closing.

Example

If an undiscovered ownership claim later arises, Title Insurance may provide protection according to the terms of the policy.

See also: Clear Title, Title, Title Company

Townhome

What it means

A Townhome is a residential property that is individually owned and typically shares one or more walls with neighboring homes.

Why it matters

Ownership responsibilities, maintenance obligations, and association rules can vary depending on the community.

Example

Many Florida townhome communities have Homeowners Associations (HOAs) that maintain common areas.

U 2

Under Contract

What it means

Under Contract means the buyer and seller have entered into a Purchase Contract and are working toward Closing, subject to the terms of the agreement.

Why it matters

Although the property is generally no longer actively available, certain contract terms or conditions may still need to be satisfied before Closing.

Example

The property is Under Contract while inspections, financing, and other contractual requirements are being completed.

Underwriting

What it means

Underwriting is the lender’s detailed review of a borrower’s financial information, the property, and the loan to determine whether the loan meets the lender’s requirements for final approval.

Why it matters

Receiving a Pre-Approval does not guarantee final Loan Approval.

Example

The lender’s underwriter reviews income, assets, credit history, and the appraisal before issuing final Loan Approval.

V 1

Value

What it means

Value is the estimated worth of a property at a particular point in time and may be determined in different ways depending on the purpose.

Why it matters

The value of a property may be influenced by location, condition, size, amenities, recent comparable sales, and current market conditions.

Example

Two similar homes located in different neighborhoods may have very different values.

W 3

Walk-Through (Final Walk-Through)

What it means

A Final Walk-Through is the buyer’s final opportunity to inspect the property shortly before Closing.

Why it matters

The Final Walk-Through helps confirm that the property’s condition is substantially the same as agreed upon in the Purchase Contract and that any negotiated repairs or other agreed-upon items have been completed.

Example

The buyer completes the Final Walk-Through the day before Closing.

Walls-In Insurance (HO-6 Insurance)

What it means

Walls-In Insurance (HO-6 Insurance) is an insurance policy commonly purchased by condominium owners to help cover certain portions of the interior of the unit, personal property, personal liability, and other covered losses. Coverage may include interior walls, flooring, cabinetry, fixtures, and improvements that are not insured by the condominium association’s master policy.

Why it matters

The condominium association’s master policy may not cover everything inside an individual unit. Buyers should review the association’s insurance responsibilities and consult an insurance professional to determine the appropriate coverage and policy limits for their unit.

Example

A pipe leak damages the flooring, kitchen cabinets, drywall, and personal property inside a condominium unit. Depending on the association’s master policy and the owner’s HO-6 policy, some or all of the interior damage may be covered by the unit owner’s insurance.

See also: Homeowners Insurance, Master Insurance Policy, Condominium

Warranty Deed

What it means

A Warranty Deed is one type of deed that generally provides certain warranties from the seller regarding ownership of the property and the legal right to transfer it.

Why it matters

Different types of deeds provide different legal rights, protections, and warranties.

Example

The type of deed used depends on the transaction and the agreement between the parties.

Year Built

What it means

Year Built refers to the year a property’s original construction was completed, according to available public records or other reliable sources.

Why it matters

The Year Built may affect insurance, financing, maintenance planning, and buyer expectations. However, many homes have been substantially updated or renovated over time.

Example

A home built in 1988 with a recently replaced roof and updated electrical system may appeal to buyers seeking both character and modern improvements.

Zoning

What it means

Zoning refers to local government regulations that determine how land may be used and developed.

Why it matters

Zoning affects how property may be used, including residential, commercial, agricultural, or other permitted purposes, as well as certain building and land-use restrictions.

Example

A buyer planning to build a detached guest house should first verify that local zoning regulations permit the intended use.

See also: Easement, Real Property, Survey

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A note on this guide

This publication is intended to educate—not overwhelm.

This publication is provided for general educational and informational purposes only and should not be considered legal, tax, accounting, financial, insurance, or investment advice. While every effort has been made to ensure accuracy at the time of publication, laws, lending guidelines, insurance requirements, regulations, contracts, and industry practices may change over time and may vary depending on the specific circumstances of a transaction. Always consult the appropriate licensed professional regarding your individual circumstances before making important legal, financial, tax, insurance, or real estate decisions. ⸻

Still unclear on something

Ask the question. That is the whole point of the guide.

No one is expected to memorize this. If a term is holding up a decision you are trying to make, a short conversation usually settles it faster than more reading.

Call (954) 495-1753 Send a question

Compiled by: Jennifer Mitchell, Broker
Brokerage: JM Distinctive Properties, LLC
Serving: Broward, Palm Beach and Miami-Dade counties
Direct: (954) 495-1753