Florida Real Estate Jargon Buyers Must Know Today

Buying a home in Florida? It’s crucial to understand real estate jargon from the very start. ...

1. Earnest Money & Escrow

  • Earnest Money: A deposit demonstrating serious intent...
  • Escrow: Third-party account...
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Florida Real Estate Jargon Buyers Must Know Today

Buying a home in Florida? It’s crucial to understand real estate jargon from the very start. Contracts, inspections, financing—the terminology can feel overwhelming. Let’s simplify the key terms every Florida buyer needs today…

1. Earnest Money & Escrow

  • Earnest Money: A deposit demonstrating serious intent. Typically 1–3% of purchase price.
  • Escrow: Third-party account holding the funds during due diligence and loan processing.

2. Appraisal & Comparative Market Analysis (CMA)

  • Appraisal: Licensed valuation tool lenders require to ensure property is worth the loan amount.
  • CMA: Agent-generated report on similar nearby sales to determine market value.

3. Closing Costs & Loan-to-Value (LTV)

  • Closing Costs: Fees tied to finalizing the purchase—attorneys, title insurance, appraisal, loans. Typically ~2–5% of price.
  • LTV: Loan amount divided by purchase price. Lower LTV = better loan terms.

4. Contingency & Caveat Emptor

  • Contingency: Contract clause enabling buyers to exit if conditions aren’t met (financing, inspection).
  • Caveat Emptor: “Buyer beware”—the burden is on buyer to inspect and uncover issues.

5. HOA, Flood Zone, Homestead Exemption

  • HOA: Homeowners’ Association—adds monthly rules, fees, oversight.
  • Flood Zone: Important in FL—can require flood insurance, impact financing.
  • Homestead Exemption: Florida tax benefit and creditor protection for primary residence.

6. Stigmatized Property & Warranty Deed

  • Stigmatized Property: Homes with negative history (e.g., crime scene) that may influence buyer decisions and local disclosure laws.
  • Warranty Deed: Guarantees clear title; preferable to a Quitclaim deed.

7. PMI & Assumable Mortgage

  • PMI: Private mortgage insurance required if down payment is below 20%, increases monthly payment.
  • Assumable Mortgage: Buyer takes over seller’s existing loan, often at lower interest rate.
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