Real Estate Glossary

GLOSSARY OF REAL ESTATE TERMS

About this glossary: These definitions cover general real estate terms as well as Florida-specific concepts and new construction terminology. Terms marked FL have particular significance under Florida law. Terms marked New Construction are especially relevant to buyers purchasing newly built homes. For questions about how any term applies to your specific transaction, consult a licensed real estate professional, attorney, or lender.

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

ADDENDUM: An addition to a contract that must be signed by all parties to be binding. In new construction, addenda often cover community rules, upgrade selections, and builder-specific terms that are separate from the main purchase agreement.
AMORTIZATION: The payment of a financial obligation on an installment basis. An amortized loan is paid off completely — both interest and principal — through a series of regular payments over the life of the loan, rather than interest-only payments with a lump sum at the end.
ANNUAL PERCENTAGE RATE (APR): The total cost of borrowing expressed as a yearly rate, including interest, points, and all loan fees such as escrow and processing charges. The APR is always equal to or higher than the stated interest rate and provides a more complete picture of the true cost of a loan.
APPLICATION FEE: A fee charged by a lender to cover the cost of processing a loan application. Not all lenders charge this fee — it is negotiable in some cases.
APPRAISAL: A professional opinion of a property’s current market value, conducted by a licensed appraiser. Lenders require an appraisal before approving a mortgage to confirm the property is worth at least the amount being borrowed. In new construction, the appraisal is based on comparable sales and the value added by upgrades — not necessarily the contract price.
APPRECIATION: The increase in value of a property over time, due to market conditions, improvements, or other factors.
APPURTENANCE: Anything that is incident to or attached to land and passes with it when the property is sold — such as easements, rights of way, or outbuildings.
AS-IS CONDITION: A sale in which the property is sold in its current state, with the seller making no repairs or concessions. The buyer accepts the property with all known and unknown defects. Florida law still requires sellers to disclose known material defects even in an as-is sale.
ASSESSED VALUE: The value assigned to a property by the county property appraiser for the purpose of calculating property taxes. In Florida, assessed value may differ significantly from market value, particularly for properties with Homestead Exemption, which limits annual increases in assessed value.
ASSIGNMENT: The transfer of rights or interests from one party to another. In real estate, a contract assignment transfers the buyer’s rights under a purchase agreement to a new buyer. Some new construction contracts prohibit or restrict assignment.
ASSUMPTION OF A MORTGAGE: A buyer’s agreement to take over an existing mortgage, including its interest rate and remaining balance. The lender must approve the assumption and release the original borrower from liability. Not all loan types are assumable — FHA and VA loans often are; conventional loans generally are not.

BALLOON PAYMENT: A lump sum payment due at the end of a loan term that is significantly larger than the regular installment payments. Common in commercial lending; less common in residential mortgages.
BENEFICIARY: The person or entity entitled to receive benefits under a trust or insurance policy. In mortgage lending, the lender is the beneficiary of the deed of trust.
BINDER: Written evidence of temporary insurance coverage while a permanent policy is being issued. Also used informally to describe a good-faith deposit made to hold a property.
BROKER FL: A person licensed by the state to represent others in real estate transactions for compensation. In Florida, a broker holds a higher license than a sales associate and may operate independently or own a brokerage. A broker-owner is a broker who also owns the brokerage company.
BUILDER’S PREFERRED LENDER New Construction: A mortgage lender that has a formal relationship with a home builder, often in exchange for access to buyers. Builders typically offer financing incentives — rate buydowns, closing cost credits — to buyers who use the preferred lender. These incentives are real but should be evaluated against market alternatives before committing.
BUNDLE OF RIGHTS: The collection of legal rights that come with property ownership: the right to use, sell, lease, mortgage, exclude others, and transfer the property. Zoning laws, easements, and deed restrictions can limit specific rights within this bundle.
BUYER REPRESENTATION AGREEMENT FL: A written contract between a buyer and a licensed real estate agent or broker establishing the terms of representation. Since August 2024, Florida law requires a signed Buyer Representation Agreement before an agent can show property to a buyer. The agreement defines the agent’s obligations, compensation, and the duration of representation.
BUYER’S AGENT: A licensed real estate agent or broker who represents the buyer’s interests exclusively in a transaction. A buyer’s agent has full fiduciary duties to the buyer, including loyalty, confidentiality, disclosure, obedience, reasonable care, and accounting. This is distinct from a transaction broker, who facilitates the transaction without full fiduciary duties to either party.
BUYDOWN New Construction: An arrangement in which points are paid upfront to reduce the interest rate on a mortgage. A temporary buydown reduces the rate for the first one to three years before stepping up to the permanent rate. A permanent buydown reduces the rate for the life of the loan. Builders frequently offer buydowns as incentives; the long-term value depends on how long the buyer stays in the home.

CAP: The maximum amount an interest rate or monthly payment can increase, either at each adjustment period or over the life of an adjustable-rate mortgage.
CAPITAL GAIN: The profit realized from the sale of a capital asset such as real property. In Florida, there is no state capital gains tax, but federal capital gains tax may apply. Primary residence exclusions under federal law can exempt up to $250,000 ($500,000 for married couples) of gain if certain ownership and use requirements are met.
CAPITALIZATION RATE (CAP RATE): The ratio of a property’s net operating income to its purchase price or current value, expressed as a percentage. Used primarily in investment property analysis to compare expected returns across properties.
CDD FEE (COMMUNITY DEVELOPMENT DISTRICT) FL New Construction: A special assessment charged to property owners within a Community Development District — a special-purpose government entity created to finance and manage infrastructure and amenities in planned communities. CDD fees appear as a line item on property tax bills and are paid annually. They reduce a buyer’s effective purchasing capacity and can persist for 20–30 years. In Florida, new construction communities — particularly those with resort-style amenities — frequently carry CDD fees. Buyers should understand the full annual CDD obligation before purchasing.
CHAIN OF TITLE: The complete history of ownership of a property, tracing title from its original grant through every subsequent transfer to the current owner. A clear chain of title is required for title insurance to be issued.
CHATTEL: An item of personal property, as distinguished from real property. Chattels do not automatically transfer with the sale of real estate unless specifically included in the purchase contract.
CLOSING FL: The final step in a real estate transaction in which ownership is legally transferred from seller to buyer. In Florida, closings are typically handled by a title company or real estate attorney. The buyer receives the deed and keys; the seller receives the net proceeds. Unlike some states, Florida does not require attorney presence at closing, though it is advisable.
CLOSING COSTS: The fees and expenses paid at closing in addition to the purchase price of the property. Common closing costs include title insurance, lender fees, recording fees, prepaid taxes and insurance, and attorney fees. In Florida, closing costs typically range from 2% to 5% of the purchase price.
CLOSING DISCLOSURE (CD): A standardized form required by federal law that provides a final, itemized list of all closing costs, loan terms, and financial details. Lenders must provide the Closing Disclosure at least three business days before closing.
CLOUD ON TITLE: Any claim, lien, or encumbrance that affects the clarity of ownership and may impair the ability to sell or finance a property. Clouds on title must be resolved before a clear title can be conveyed.
COMMISSION: Compensation paid to a real estate agent or broker for services rendered in a transaction. Following the 2024 NAR settlement, sellers are no longer required to offer compensation to a buyer’s agent through the MLS. Commission amounts and payment structures are now negotiated directly between clients and their agents.
COMPARABLE SALES (COMPS): Recently sold properties that are similar in size, condition, location, and features to a subject property, used to estimate market value. An appraisal and a comparative market analysis both rely on comparable sales, though they serve different purposes.
CONDOMINIUM: A form of ownership in which the buyer holds title to an individual unit and shares ownership of common areas with other unit owners. In Florida, condominiums are governed by the Florida Condominium Act, which mandates specific financial disclosures, reserve requirements, and association governance rules.
CONTINGENCY: A condition in a purchase contract that must be satisfied before the contract becomes binding. Common contingencies include financing approval, satisfactory home inspection, and appraisal at or above purchase price. New construction contracts often contain fewer buyer contingencies than resale contracts.
CONVENTIONAL LOAN: A mortgage loan not backed or insured by a government agency such as the FHA, VA, or USDA. Conventional loans typically require stronger credit and larger down payments than government-backed loans but may offer lower overall costs for qualified buyers.
CONVEYANCE: The transfer of title to real property from one party to another. Also refers to the document — typically a deed — by which the transfer is made.
COVENANT: A promise or restriction contained in a deed or other recorded document. Covenants run with the land and bind future owners. Homeowners association rules and deed restrictions are common examples.

DEBT-TO-INCOME RATIO (DTI): The percentage of a borrower’s gross monthly income that goes toward monthly debt payments, including the proposed mortgage payment. Lenders use DTI to evaluate a borrower’s ability to manage additional debt. Most conventional loan programs require a DTI of 45% or below, though exceptions exist.
DEED FL: A written instrument that, when properly executed and delivered, transfers title to real property. Florida uses warranty deeds for most residential transactions. A warranty deed includes guarantees that the seller holds clear title and will defend against future claims. A quitclaim deed transfers whatever interest the grantor holds without guarantees.
DEED RESTRICTION: A limitation on how a property may be used, recorded in the deed or a separate document. Common in planned communities, deed restrictions may govern architectural standards, landscaping, or permitted uses. They run with the land and bind all future owners.
DEFAULT: The failure to fulfill a legal obligation, most commonly the failure to make mortgage payments. Default can lead to foreclosure proceedings. In Florida, which is a judicial foreclosure state, the lender must file a lawsuit and obtain a court judgment before a foreclosure sale can occur.
DEPRECIATION: A decrease in the value of a property due to age, wear, obsolescence, or external factors. In real estate investment, depreciation also refers to a tax deduction that allows owners of income-producing property to recover the cost of the building over time.
DESIGN CENTER New Construction: A showroom operated by a builder where buyers make selections for finishes, fixtures, flooring, cabinetry, and other upgrades. Design center appointments typically occur after a purchase contract is signed. Builder margins on design center upgrades are often significant — some selections are better made after closing through independent contractors.
DISCLOSURE FL: The legal requirement to reveal known material facts that could affect a property’s value or desirability. Florida law requires sellers to disclose all known material defects, even in as-is sales. Failure to disclose can result in rescission of the contract and liability for damages.
DISCOUNT POINTS: Fees paid to a lender at closing to reduce the interest rate on a mortgage. Each point equals 1% of the loan amount. Paying points makes sense when the borrower plans to keep the loan long enough for the monthly savings to exceed the upfront cost — the break-even period.
DOWN PAYMENT: The portion of a property’s purchase price paid by the buyer in cash at closing, not covered by the mortgage. Down payment requirements vary by loan type — conventional loans may require as little as 3%, while jumbo loans often require 10–20%.
DUE DILIGENCE: The process of investigating a property before purchase, including reviewing title, obtaining inspections, researching zoning, and verifying disclosures. In new construction, due diligence includes reviewing the purchase contract, researching the builder’s reputation, and understanding community fees and restrictions.
DUE-ON-SALE CLAUSE: A provision in a mortgage that requires the full loan balance to be paid when the property is sold or transferred. This clause prevents assumption of the mortgage by a new buyer without lender approval.

EARNEST MONEY DEPOSIT (EMD): A deposit made by a buyer to demonstrate good faith when entering into a purchase contract. In Florida, earnest money is typically held in escrow by the listing broker or a title company. If the buyer defaults without a valid contractual reason, the seller may be entitled to retain the deposit. New construction contracts often require larger deposits than resale transactions.
EASEMENT: The legal right of one party to use another’s property for a specific purpose. Common easements include utility easements for power lines, drainage easements, and access easements. Easements typically run with the land and are disclosed in the title search.
ENCUMBRANCE: Any claim, lien, or restriction on a property that may affect its value or transferability. Mortgages, easements, and deed restrictions are all forms of encumbrance.
EQUITY: The difference between a property’s current market value and the amount owed on any mortgages or liens against it. Equity increases as the loan balance is paid down and as the property appreciates in value.
ESCROW: A neutral third-party arrangement in which funds or documents are held until certain conditions are met. In Florida, escrow is commonly used to hold earnest money deposits and is managed by a title company, real estate attorney, or licensed escrow agent.

FIDUCIARY DUTY: The highest legal duty of care and loyalty owed by one party to another. A real estate agent acting as a single agent owes fiduciary duties to their client that include loyalty, confidentiality, obedience, disclosure, reasonable care, and accounting. The on-site sales agent at a new construction community owes fiduciary duty to the builder — not to the buyer.
FIXED-RATE MORTGAGE: A mortgage in which the interest rate remains constant for the life of the loan. Monthly principal and interest payments do not change, though taxes and insurance components of an escrow payment may fluctuate annually.
FLOOD ZONE FL: A geographic area designated by FEMA based on its risk of flooding. Properties in high-risk flood zones (Zone A or V) are required to carry flood insurance if they have a federally backed mortgage. Florida has a significant number of properties in designated flood zones, and flood insurance costs have increased substantially in recent years. Flood zone designation should be verified early in the buying process.
FORECLOSURE FL: The legal process by which a lender takes possession of a property after the borrower defaults on the mortgage. Florida is a judicial foreclosure state, meaning the lender must file a lawsuit and obtain a court judgment before proceeding with a foreclosure sale. This process can take months to years. This differs significantly from title theory states such as North Carolina, where non-judicial foreclosure through a trustee is common and typically moves much faster.
FOR SALE BY OWNER (FSBO): A property listed for sale directly by the owner without using a listing agent. FSBO sellers are still legally required to disclose known material defects. Buyers working with an agent may still be able to purchase FSBO properties, though compensation arrangements must be agreed upon directly.

GOOD FAITH ESTIMATE (GFE): Replaced by the Loan Estimate under current federal law, this was formerly a standardized form providing an approximation of closing costs. The current Loan Estimate serves the same purpose and must be provided within three business days of a loan application.
GRANTEE: The buyer or recipient in a deed — the party to whom the property is conveyed.
GRANTOR: The seller or transferor in a deed — the party conveying the property.

HELOC (HOME EQUITY LINE OF CREDIT): A revolving line of credit secured by a property’s equity, functioning similarly to a credit card. The borrower can draw funds up to a set limit during the draw period and repays during the repayment period. Interest rates are typically variable.
HOA (HOMEOWNERS ASSOCIATION): A private organization that governs a residential community, enforces community rules, and manages common areas. HOA membership is typically mandatory in planned communities and condominiums. Monthly or annual dues fund maintenance, amenities, and reserves. HOA documents — including the Declaration of Covenants, Conditions and Restrictions (CC&Rs), bylaws, and financial statements — should be reviewed carefully before purchase.
HOME INSPECTION: A professional evaluation of a property’s physical condition, including structural components, mechanical systems, and visible defects. In Florida, home inspectors must be licensed. New construction buyers can request inspections at key construction milestones — foundation, framing, and pre-drywall — in addition to the final walkthrough.
HOMESTEAD EXEMPTION FL: A Florida constitutional protection for a primary residence that provides two significant benefits: (1) a reduction in assessed value for property tax purposes — up to $50,000 — and (2) the Save Our Homes cap, which limits annual increases in assessed value to 3% or the rate of inflation, whichever is lower. Homestead also provides asset protection from most creditors. To qualify, the property must be the owner’s permanent primary residence, and the application must be filed with the county property appraiser by March 1 of the tax year.

IMPACT FEES FL New Construction: One-time fees charged by local governments to new development to offset the cost of public infrastructure — roads, schools, parks, utilities — required to serve the new homes. In Florida, impact fees are typically paid by the builder and may be passed through to the buyer as part of the home price. St. Johns County adopted a developer impact fee for conservation land acquisition in 2025.
INSPECTION CONTINGENCY: A contract provision allowing the buyer to have the property professionally inspected and to negotiate repairs or cancel the contract based on the findings. New construction purchase agreements often limit or eliminate standard inspection contingencies.
INSURANCE (HOMEOWNER’S): Property insurance that covers the structure of a home and personal belongings against damage from covered perils, and provides liability coverage for injuries on the property. In Florida, homeowner’s insurance also typically requires separate wind and flood coverage. Insurance costs in Florida have increased significantly in recent years and should be verified before contract.
INTEREST RATE BUYDOWN: See BUYDOWN.
INVENTORY HOME New Construction: A new home that is already under construction or complete, built by the builder on speculation without a specific buyer under contract. Inventory homes can close faster than to-be-built homes but offer less customization. Builders may be more willing to negotiate price or incentives on inventory homes, particularly at end of quarter.

JUDICIAL FORECLOSURE FL: A foreclosure process that requires the lender to file a lawsuit and obtain a court judgment before proceeding with a sale. Florida is a judicial foreclosure state. This is in contrast to non-judicial or “power of sale” foreclosure used in title theory states. The judicial process typically takes longer but provides more legal protections for the borrower.
JUMBO LOAN: A mortgage that exceeds the conforming loan limits set by the Federal Housing Finance Agency — $806,500 in most U.S. markets for 2025. Jumbo loans are not eligible for purchase by Fannie Mae or Freddie Mac and typically carry stricter qualification requirements.

LIEN: A legal claim against a property as security for a debt or obligation. Common liens include mortgage liens, tax liens, and mechanic’s liens. All liens must be satisfied before clear title can be conveyed.
LIEN THEORY STATE FL: A state in which a mortgage creates a lien on the property as security for the loan, while the borrower retains legal title throughout the loan term. Florida and South Carolina are lien theory states. This differs from title theory states such as North Carolina, where the lender holds legal title until the loan is paid off through a deed of trust. The distinction significantly affects the foreclosure process — lien theory states require judicial foreclosure while title theory states typically allow faster non-judicial foreclosure.
LISTING AGREEMENT: A contract between a property owner and a licensed real estate broker authorizing the broker to market and sell the property in exchange for compensation. The listing agreement defines the listing price, marketing plan, duration, and commission structure.
LOAN ESTIMATE: A standardized federal form provided to borrowers within three business days of a mortgage application, detailing estimated loan terms, monthly payment, and closing costs. Allows comparison shopping between lenders.
LOAN-TO-VALUE RATIO (LTV): The ratio of the mortgage amount to the appraised value of the property, expressed as a percentage. A higher LTV represents more risk to the lender and may trigger requirements for private mortgage insurance (PMI).
LOT PREMIUM New Construction: An additional charge for a desirable lot within a new construction community — such as a corner lot, cul-de-sac, preserve view, or water frontage. Lot premiums are negotiable in some cases and may or may not add equivalent value at resale.

MASTER-PLANNED COMMUNITY New Construction: A large-scale residential development designed with comprehensive planning for amenities, infrastructure, land use, and community identity. Master-planned communities often feature multiple builders, price points, and phases. St. Johns County has several active master-planned communities including Silverleaf, RiverTown, Shearwater, and Nocatee.
MECHANIC’S LIEN FL: A legal claim against a property filed by a contractor, subcontractor, or supplier who has not been paid for labor or materials. Florida has strong mechanic’s lien laws. In new construction, buyers should ensure the builder provides a release of all liens at closing to prevent title issues from unpaid subcontractors.
MORTGAGE: A legal agreement in which real property is used as security for a loan. In Florida, a lien theory state, the borrower retains title to the property while the lender holds a lien against it until the loan is repaid.
MORTGAGE INSURANCE (PMI / MIP): Insurance that protects the lender in the event of borrower default. Private Mortgage Insurance (PMI) is required on conventional loans with less than 20% down. Mortgage Insurance Premium (MIP) is required on FHA loans. The cost is typically added to the monthly payment.
MULTIPLE LISTING SERVICE (MLS): A database maintained by a real estate association that allows member brokers to share property listings and cooperate on transactions. MLS listings provide the most comprehensive and accurate market data for resale properties. New construction homes are often not listed in the MLS or are listed with limited information.

NAR SETTLEMENT FL: The 2024 settlement agreement reached by the National Association of Realtors that changed how buyer’s agent compensation is handled in real estate transactions. Under the new rules, sellers are no longer required to offer compensation to a buyer’s agent through the MLS, and agents must have a signed Buyer Representation Agreement before showing property. The changes took effect in August 2024 and apply in Florida.
NET LISTING: A listing arrangement in which the seller receives a fixed net amount from the sale, with the agent keeping everything above that amount as commission. Net listings are legal in some states but are generally discouraged and considered unethical in Florida due to conflicts of interest.
NEW CONSTRUCTION CONTRACT New Construction: A purchase agreement for a newly built home, typically prepared by the builder’s legal team and written primarily to protect the builder’s interests. New construction contracts often include provisions favorable to the builder regarding timelines, materials substitution, price adjustments, and dispute resolution. Independent review by a buyer’s agent or attorney before signing is strongly recommended.
NON-DISCLOSURE STATE FL: Florida is a non-disclosure state, meaning sale prices are not required to be reported to a public government database. Home sale prices in Florida are not publicly recorded in the same way they are in many other states. This limits direct access to comparable sales data for the general public, though licensed real estate professionals can access this data through MLS and other professional tools.

OFFER: A formal proposal to purchase a property at a specified price and under specified terms. An offer becomes a binding contract when it is accepted by the seller without modification and communicated back to the buyer.
ON-SITE AGENT New Construction: A licensed real estate agent employed by a builder or developer to sell homes within a specific community. The on-site agent’s fiduciary duty runs to the builder, not the buyer. They can provide factual information about the homes and community but cannot advocate for the buyer’s interests, negotiate against the builder, or disclose information that might discourage a sale.
ORIGINATION FEE: A fee charged by a lender to process and underwrite a mortgage loan, typically expressed as a percentage of the loan amount. Origination fees are disclosed on the Loan Estimate and Closing Disclosure.

POWER OF ATTORNEY: A legal document authorizing one person (the attorney-in-fact) to act on behalf of another in legal or financial matters. In Florida real estate transactions, a power of attorney used at closing must meet specific statutory requirements.
PRE-APPROVAL: A lender’s written commitment to provide a mortgage up to a specified amount, based on a preliminary review of the borrower’s credit, income, and assets. Pre-approval is more comprehensive than pre-qualification and carries more weight with sellers. In new construction, builders typically require pre-approval — often through their preferred lender — before accepting a contract.
PRE-QUALIFICATION: An informal estimate of how much a buyer may be able to borrow, based on self-reported financial information without verification. Pre-qualification is less rigorous than pre-approval and typically carries less weight in a competitive market.
PROCURING CAUSE New Construction: The agent or action that is the primary cause of a buyer entering into a purchase transaction. In new construction, procuring cause determines which agent — the builder’s on-site agent or an outside buyer’s agent — is entitled to compensation. If a buyer visits a new construction community without a registered buyer’s agent and later tries to bring one in, the builder may dispute whether the outside agent is the procuring cause and refuse to pay their commission. This is a primary reason why independent representation should be established before the first visit to any new construction development.
PROPERTY TAX FL: An annual tax assessed by the county on the value of real property. In Florida, property taxes are due by March 31 of the following year, with discounts available for early payment (4% in November, decreasing through March). The Florida Homestead Exemption can significantly reduce assessed value and cap annual increases for primary residences.
PUNCH LIST New Construction: A list of items identified during the final walkthrough of a new home that require correction before closing. Items may include cosmetic defects, unfinished work, or items not built to specification. The builder is typically responsible for completing punch list items before or shortly after closing under the terms of the warranty.
PURCHASE AGREEMENT: A binding contract between buyer and seller that sets out the terms and conditions of a real estate transaction, including price, closing date, contingencies, and responsibilities of each party. Also called a sales contract or contract for sale.

QUITCLAIM DEED: A deed that transfers whatever interest the grantor holds in a property without warranties or guarantees of title. Quitclaim deeds are used in situations such as transfers between family members, correcting title defects, or removing a name from a deed — not typically in standard purchase transactions.

RATE LOCK: An agreement between a borrower and lender that guarantees a specific interest rate for a set period, typically 30 to 90 days, while the loan is being processed. In new construction, where closing timelines can be unpredictable, extended rate locks (six to twelve months) are sometimes available but may carry a cost.
REAL ESTATE ATTORNEY FL: A licensed attorney who specializes in real property law. In Florida, real estate closings do not require attorney participation as they do in some other states, but attorneys are commonly involved in complex transactions, title disputes, and situations involving unusual contract terms.
RECORDING: The filing of a deed or other legal document with the county clerk or recorder, making it part of the public record. In Florida, recording is essential to protect a buyer’s ownership interest against subsequent claims.
REFINANCING: The process of replacing an existing mortgage with a new one, typically to obtain a lower interest rate, change the loan term, or access equity. Refinancing involves new closing costs and makes sense when the long-term savings exceed those costs.
RESALE VALUE New Construction: The anticipated future market value of a property when it is eventually sold. In new construction, resale value is influenced by location, community quality, school district, builder reputation, and the specific upgrades selected. Not all upgrades contribute equally to resale value — some add more than they cost, others do not recover their cost at all.

SAVE OUR HOMES (SOH) FL: A Florida constitutional amendment that caps the annual increase in the assessed value of a homestead property at 3% or the rate of inflation, whichever is lower. This cap resets when a property sells, which can create a significant difference between the assessed value paid by a long-term owner and the assessed value a new buyer will face. Buyers purchasing in Florida should verify the current assessed value and estimate the potential increase in property taxes after purchase.
SELLER’S AGENT (LISTING AGENT): A licensed real estate agent or broker who represents the seller’s interests in a transaction. The seller’s agent has fiduciary duties to the seller and is compensated by the seller. In new construction, the builder’s on-site sales agent serves as the seller’s agent.
SINGLE AGENT FL: In Florida, a real estate licensee who represents only one party — either the buyer or the seller — in a transaction and owes full fiduciary duties to that party. Florida law requires written disclosure of single agent representation. This is the highest level of representation available and is distinct from a transaction broker, who represents neither party exclusively.
SPEC HOME (SPECULATIVE HOME) New Construction: A home built by a builder without a specific buyer under contract, in anticipation of future sale. Also called an inventory home. Spec homes are completed or nearly completed and can close quickly. Builders are sometimes willing to negotiate more aggressively on spec homes than on to-be-built contracts.
SURVEY: A professional measurement and mapping of a property’s boundaries, easements, and physical features. In Florida, a survey is typically required by lenders and title companies. New construction buyers should obtain a survey to confirm the home was built within lot boundaries and to identify any encroachments or easements.

TITLE: Legal ownership of real property. Title represents the right to own, use, and transfer property. Clear title — free of liens, encumbrances, and competing claims — is required for a standard real estate transaction.
TITLE INSURANCE: Insurance that protects against losses arising from defects in title that existed before the policy was issued — such as undisclosed liens, forged documents, or errors in public records. In Florida, two types are issued: an owner’s policy (protecting the buyer) and a lender’s policy (protecting the mortgage lender). Both are typically purchased at closing. The owner’s policy provides protection for as long as the insured holds title.
TITLE SEARCH: An examination of public records to verify a seller’s right to transfer ownership and to identify any claims, liens, or encumbrances against a property. Conducted by a title company or attorney prior to closing.
TO-BE-BUILT (TBB) New Construction: A new home that has not yet been constructed at the time of contract. The buyer selects a floor plan and lot, makes design center selections, and waits for construction to be completed — typically four to twelve months. To-be-built contracts offer the most customization but the least certainty about closing timelines.
TRANSACTION BROKER FL: In Florida, a real estate licensee who provides limited representation to a buyer, seller, or both without acting as a fiduciary for either party. A transaction broker assists with the mechanics of a transaction but cannot advocate exclusively for either party’s interests. This is the default relationship in Florida unless a single agent relationship is established in writing. The on-site agent at a new construction community typically operates as a transaction broker for the builder — or as a single agent for the seller.
TRANSFER TAX FL: A tax imposed on the transfer of real property, calculated as a percentage of the sale price. In Florida, the documentary stamp tax on deeds is $0.70 per $100 of consideration (or $0.60 per $100 in Miami-Dade County). This cost is typically paid by the seller in most Florida counties, though it is negotiable.

UNDERWRITING: The lender’s process of evaluating a borrower’s creditworthiness and the property’s value to determine whether to approve a mortgage loan. Underwriters review income, assets, credit history, and the appraisal before issuing a loan commitment.
UPGRADE New Construction: Any finish, fixture, feature, or structural option selected by a buyer in the design center that exceeds the builder’s standard specifications. Upgrades add to the purchase price of a new home. Not all upgrades contribute equally to resale value — structural changes and kitchen/bath upgrades tend to return more value than cosmetic selections.

VA LOAN: A mortgage guaranteed by the U.S. Department of Veterans Affairs, available to eligible veterans, active-duty service members, and surviving spouses. VA loans offer no down payment requirement, no PMI, and competitive interest rates. They can be used for new construction purchases, though the process involves additional steps including VA appraisal requirements.
VARIANCE: A deviation from local zoning requirements granted by a government authority for a specific property or use. A variance allows a property owner to use land in a way that is otherwise restricted by current zoning rules.

WARRANTY (BUILDER’S) New Construction: A guarantee provided by a home builder covering defects in workmanship and materials. Florida law provides minimum implied warranties on new construction: one year for workmanship and materials, two years for mechanical systems (plumbing, electrical, HVAC), and ten years for structural defects. Many builders also offer their own express warranties. Buyers should review warranty terms carefully and understand the process for filing warranty claims before closing.
WARRANTY DEED FL: A deed in which the grantor guarantees that they hold clear title and will defend the buyer against any future claims. The general warranty deed is the most common type used in Florida residential transactions and provides the strongest title protection available.
WALKTHROUGH (FINAL) New Construction: An inspection of a newly completed home conducted by the buyer — typically with the builder’s representative — shortly before closing. The purpose is to identify any incomplete work, defects, or items not built to specification. Items identified during the walkthrough are documented on a punch list. Buyers should bring a detailed checklist and take their time during the final walkthrough.

ZONING: Government regulations that control land use within designated areas — specifying whether land may be used for residential, commercial, industrial, agricultural, or other purposes, and governing building standards within each zone. Zoning affects what can be built on a property and how it may be used. Buyers should verify current zoning and any pending zoning changes for properties they are considering.