FL Real Estate key terms

The business of bringing buyers and sellers of real property together, negotiating or assisting in negotiations, and performing related services for a fee or commission; it requires a Florida real estate license.

The economic concept that a property's location, including its access to jobs, schools, shopping, and amenities, strongly influences its value; often called area preference.

A seven-member board appointed by the Governor that regulates Florida brokers and sales associates, adopts rules, sets education requirements, and imposes discipline; it operates within the Department of Business and Professional Regulation.

A licensee who performs real estate services for compensation under the direction, control, and sponsorship of an active broker or owner-developer; a sales associate cannot be paid directly by a buyer or seller.

An account in which a broker deposits money belonging to others, such as earnest money or security deposits, without commingling it with personal or business funds; records and reconciliations are required.

A citation the Commission may issue for a minor first violation, requiring the licensee to complete specified education within a set period instead of facing formal disciplinary action.

Florida's default brokerage relationship, in which the broker assists one or both parties in a transaction without representing either as a fiduciary, and must treat both honestly and fairly.

A broker who represents only one party, buyer or seller, in a transaction and owes that principal full fiduciary duties, including loyalty, confidentiality, and disclosure.

A relationship in which the broker owes only limited statutory duties (honesty and fairness, disclosure of known material facts, accounting for funds, and limited confidentiality) and must give the customer written notice.

The duties a broker owes a principal in a single-agency relationship: care, obedience, loyalty, disclosure, accounting, and confidentiality. These duties end when the agency relationship terminates.

A legal rule requiring that certain contracts, including contracts for the sale of real property and leases longer than one year, be in writing and signed by the party to be charged.

Money a buyer gives when making an offer to show good faith; it is held in escrow and is applied to the purchase price at closing or refunded if the contract so provides.

A contract provision making one party's performance depend on a stated event, such as the buyer obtaining financing or a satisfactory inspection; if the event fails, that party may cancel and recover the deposit.

A court-ordered remedy requiring a party to carry out the contract as written, commonly sought in real estate sales because each parcel of land is considered unique.

The largest estate in land, lasting indefinitely, freely transferable, and inheritable by the owner's heirs; it is the most common form of ownership in Florida.

An ownership interest lasting only as long as a named person lives; the life tenant may use the property but cannot commit waste, and the estate ends automatically at that person's death.

Co-ownership in which each owner holds a separate, undivided share that may be unequal, may be sold or willed to others, and carries no right of survivorship.

Co-ownership by two or more persons holding equal undivided shares with equal rights of possession; when one owner dies, that share passes to the surviving owners rather than to the heirs.

A form of co-ownership reserved for married couples in Florida, featuring equal shares and a right of survivorship; a creditor of only one spouse generally cannot reach the property.

The right to use another person's land for a specific purpose, such as access or utility lines; it is an encumbrance that runs with the land and does not transfer ownership.

Any right or interest in a property held by someone other than the owner that limits the owner's use or may diminish value, such as liens, easements, mortgages, or deed restrictions.

A deed in which the grantor makes statutory promises to defend title against all claims, including those arising before the grantor owned the property; Florida provides a statutory short form.

A deed that transfers only whatever interest the grantor may have, with no warranties or promises about the title; commonly used to clear clouds or transfer interests between family members.

A one-time premium policy that protects an owner or lender against losses from title defects, such as forged deeds or undisclosed liens, that existed before the policy date.

A notice recorded in the public records stating that a lawsuit is pending that may affect title to a specific property; it gives constructive notice to anyone who later deals with the property.

A legal description that traces the boundary of a parcel by stating directions, distances, and monuments, starting at a point of beginning and returning to it to close the figure.

The specific, identifiable starting point of a metes and bounds description from which all boundary lines are measured; the description must end back at this same point.

A map of a subdivision recorded in the public records that divides land into numbered lots and blocks; a legal description can then refer to the lot and block number on the plat.

A federal system for describing land using principal meridians and base lines that form a grid of six-mile townships, each divided into 36 one-square-mile sections.

The written promise by a borrower to repay a loan, stating the principal amount, interest rate, repayment schedule, and any late charges or acceleration terms; the note is separate from the mortgage.

A written instrument that pledges real property as security for a debt, giving the lender a lien that can be foreclosed if the borrower defaults; the borrower is the mortgagor and the lender the mortgagee.

The amount of a loan divided by the property's sale price or appraised value, expressed as a percentage; a higher ratio usually requires mortgage insurance and may carry a higher rate.

The four components of a typical monthly housing payment on an amortizing loan: principal, interest, property taxes, and hazard insurance; lenders use it to calculate qualifying ratios.

The most probable price a property should bring in a competitive, open market under all conditions for a fair sale, with buyer and seller acting prudently and knowledgeably and no undue pressure.

The use of a property that is legally permissible, physically possible, financially feasible, and produces the greatest value; it is the foundation of an appraisal.

An appraisal method that estimates value by comparing the subject property with recently sold similar properties, then adjusting the sale prices for differences in features, size, location, and condition.

A quick valuation tool for income property: the sale price or value divided by the monthly or annual gross rent; the result is multiplied by the subject's rent to estimate value.

The process at closing of dividing ongoing expenses, such as property taxes, rent, or interest, between buyer and seller according to the number of days each owns the property during the period.

A Florida excise tax on written documents that transfer or pledge property; deeds are typically taxed at 70 cents per $100 of consideration and mortgages at 35 cents per $100.

A federally required form that itemizes the final loan terms and closing costs, given to the borrower at least three business days before closing so the figures can be reviewed.