Real-Estate Glossary

A tax strategy that lets a real-estate investor defer capital-gains tax by rolling the proceeds of one investment property into a “like-kind” property within strict deadlines — 45 days to identify and 180 days to close.

The schedule by which your loan balance is paid down over the life of the mortgage. Early payments go mostly to interest; as years pass, more of each payment builds your equity.

A licensed appraiser’s independent estimate of a home’s market value, ordered by your lender. If it comes in below your contract price, you renegotiate, pay the gap, or use your appraisal contingency to exit.

A loan whose rate is fixed for an opening stretch — say 5, 7, or 10 years — then adjusts with the market. It can lower your early payments, but you take on the risk that the rate (and payment) rises later.

The FAR/BAR “AS IS” Residential Contract is the standard purchase form in most Central Florida deals. It lets you inspect and cancel for any reason during the inspection period, but the seller isn’t obligated to make repairs — you renegotiate or walk. See our Orlando buying guide.

A written agreement that defines how your agent represents you and how they’re paid. Since 2024’s commission-rule changes, signing one before touring homes has become standard practice across Florida.

Capitalization rate — a rental property’s annual net operating income divided by its price. It’s a quick yardstick for comparing the return on Orlando investment properties before financing enters the picture.

A special taxing district that funds a community’s infrastructure — roads, water, amenities — with bonds repaid through an annual assessment on your tax bill. Many newer Central Florida communities (Lake Nona, Horizon West, parts of Polk County) have CDD fees on top of any HOA dues.

The fees to finalize a purchase — lender charges, title insurance, recording, prepaid taxes and insurance — usually 2–5% of the price for buyers in Florida. Our Orlando buying guide breaks down who pays what.

A Comparative Market Analysis — what an agent uses to price a home by studying recent sales of similar nearby properties (“comps”). It’s how we set a listing price and how we judge whether a home is priced right.

A condition in the contract that must be satisfied or you can walk away with your deposit. The common ones in Florida are financing, appraisal, and inspection contingencies.

A mortgage that follows Fannie Mae / Freddie Mac rules and isn’t backed by a government agency. Put 20% down and you avoid PMI; put less and you can drop PMI later once you reach about 20% equity.

An upfront fee paid to the lender to buy down your interest rate; one point equals 1% of the loan amount. Whether points pay off depends on how long you’ll keep the loan before selling or refinancing.

Florida’s tax on real-estate transfers and loans. On the deed it’s $0.70 per $100 of price (outside Miami-Dade); on the mortgage note it’s $0.35 per $100, plus a 0.2% intangible tax on the loan amount.

How long a listing has been active before going under contract. A low metro DOM signals a fast market where good homes move quickly; a high DOM can mean a stale price and room to negotiate.

Your total monthly debt payments divided by your gross monthly income. Lenders lean on it to size your loan — most conventional programs want your DTI under roughly 43–45%, though it varies by loan type.

The window after going under contract when you inspect the home and can cancel or renegotiate. Florida’s standard contracts use an inspection period; the “AS IS” contract lets a buyer walk for any reason before it ends.

A good-faith deposit (often 1–3% of the price in Central Florida) you put down when your offer is accepted. It’s held in escrow and credited toward your closing costs — or refunded if you cancel within a valid contingency.

The share of your home you actually own — its current market value minus what you still owe on the mortgage. It grows as you pay down the loan and as values rise.

An offer term that automatically raises your bid a set amount above the next-highest competing offer, up to a cap you set. It’s a tool for Orlando bidding wars — though not every seller or listing agent will accept one.

A neutral third party (usually a title company or attorney here) that holds money or documents until the deal’s conditions are met. Your earnest money sits in escrow, and after closing your lender may keep an escrow account for taxes and insurance.

An HOA estoppel is the association’s official statement of exactly what a seller owes at closing — dues, assessments, fines, and transfer fees. Florida law caps what an association may charge to prepare one, and it’s required before a clean closing in HOA/condo communities.

A government-insured mortgage that allows down payments as low as 3.5% with flexible credit — a popular path for Central Florida first-time buyers. The trade-off is mortgage insurance that, on most FHA loans today, stays for the life of the loan.

A federal law requiring the buyer to withhold up to 15% of the sale price when the seller is a foreign person, sending it to the IRS. It comes up often in Central Florida’s international market and is handled at closing by the title company.

A FEMA designation of a property’s flood risk, which drives whether flood insurance is required and how much it costs. Much of low-lying Central Florida sits in or near a flood zone, so check the map before you buy.

A check of a home’s roof, electrical, plumbing, and HVAC that Florida insurers often require on older homes before they’ll write a policy. It’s narrower than a full home inspection and is about insurability, not negotiation.

A revolving line of credit secured by your home’s equity. It lets you tap value for renovations or other needs without refinancing your first mortgage.

An organization that maintains common areas and enforces community rules, funded by dues you pay monthly, quarterly, or annually. Always review the dues, reserves, and restrictions before buying — they vary widely across Orlando communities.

A Florida property-tax break that removes up to $50,000 from the assessed value of your primary residence. You must own and occupy the home as of January 1 and apply with the county property appraiser by March 1.

Internet Data Exchange — the rules that let a brokerage show live MLS listings on its own website. The search results you browse here come through our IDX feed from Stellar MLS.

A legal claim recorded against a property for an unpaid debt — property taxes, a contractor’s bill, or a court judgment. Liens generally must be cleared at closing before clean title can pass to the buyer.

Under Florida’s post-Surfside condo law, buildings three stories or taller must complete a milestone structural inspection and keep a funded reserve study (a SIRS). Always check a condo’s milestone status and reserve funding before you buy — it directly affects assessments and insurability.

The rate used to calculate property tax, expressed as dollars per $1,000 of taxable value and set by local taxing authorities. Multiply your taxable value (after exemptions) by the millage to estimate your annual tax.

The shared database where licensed agents list homes for sale and lease. In Central Florida that database is Stellar MLS — the same feed Lina searches when you ask her for listings.

Insurance that protects the lender, not you, when you put down less than 20% on a conventional loan. It’s added to your monthly payment and can usually be removed once you reach about 20% equity.

A Florida rule that lets you carry your accumulated Save Our Homes tax savings (up to $500,000) from your old homestead to a new one. It can meaningfully cut the property taxes on your next home if you file in time.

A lender’s written commitment to loan you up to a specific amount after checking your credit, income, and assets. In Orlando’s competitive market, sellers expect a pre-approval letter before they take your offer seriously — see our first-time buyer guide.

A quick, informal estimate of what you might borrow, based on numbers you tell a lender without verification. It’s weaker than a pre-approval and rarely enough to win a contract.

Splitting ongoing costs — property taxes, HOA dues — fairly between buyer and seller based on the closing date. In Florida, property taxes are paid in arrears, so the seller typically credits the buyer for their share of the year.

Your lender’s written guarantee to hold a quoted interest rate for a set window — often 30 to 60 days — while you close. It protects your budget if rates climb between contract and closing.

A property the lender took back after an unsuccessful foreclosure auction and now sells directly. REOs are typically sold strictly as-is, with little room for repair requests.

A Florida constitutional cap that limits how much the assessed value of a homesteaded property can rise each year — to 3% or the change in CPI, whichever is lower. It’s why a long-time owner’s tax bill can be far lower than a new buyer’s on the same street.

Money the seller credits the buyer at closing — toward closing costs or an interest-rate buydown. As Orlando’s market has balanced, concessions have come back to the negotiating table.

A form where the seller reveals known defects and material facts about the property. Florida law requires sellers to disclose issues that aren’t readily observable and that materially affect value.

A sale where the lender agrees to accept less than the mortgage balance because the home is worth less than what’s owed. Short sales can be a value, but they require lender approval and usually take much longer to close.

A Florida agency relationship where the agent owes you full fiduciary duties — loyalty, confidentiality, obedience, and full disclosure to you alone. You can ask an SLA agent to represent you as a single agent in writing if you want that higher level of duty.

A one-time charge an HOA or condo association levies for a big expense the reserves don’t cover — a new roof, repaving, or post-storm repairs. Ask about pending assessments before buying into any community.

A drawing of a property’s exact boundaries, structures, and easements. Lenders often require one, and it reveals fence or setback issues before they become your problem.

A one-time policy that protects against problems in a property’s ownership history — unpaid liens, forged deeds, or missed heirs. In most of Central Florida the seller customarily pays for the owner’s policy, though it’s negotiable.

Florida’s default agency relationship. A transaction broker gives you honest dealing, skill, and limited confidentiality while helping both sides reach a deal — but not the full loyalty of a single agent. It’s why working with an agent in Florida looks different from states with mandatory buyer agency.

A listing status meaning the seller has accepted an offer. “Active under contract” may still take backup offers; “pending” usually means contingencies are cleared and the deal is heading to closing.

A zero-down mortgage for eligible veterans, active military, and some surviving spouses, backed by the U.S. Department of Veterans Affairs. With a large military and veteran population in Florida, it’s a powerful tool — no down payment and no monthly PMI.

The deed most Florida sellers use to transfer ownership, guaranteeing clear title back through the property’s full history. Your title insurance policy stands behind that guarantee.

A Florida-specific report documenting roof and construction features that resist hurricane wind. A good report can significantly lower your homeowners insurance premium, so it’s worth ordering on most homes here.