Florida Real Estate Glossary for Home Buyers

Written by Erik Michor, Realtor®Licensed Florida real estate agent (SL3406127) · Signature Realty AssociatesLast reviewed October 14, 2026

A

Ad valorem taxes

Property taxes based on a home's assessed value and the local millage rates set by the county, city, school board and other taxing authorities. They are the part of the tax bill that exemptions such as homestead can reduce. Related guide →

Appraisal gap

The difference between the agreed purchase price and a lower appraised value. Depending on the contract and loan, the buyer may need to cover it, renegotiate or cancel. Related guide →

AS IS contract

A widely used Florida residential purchase contract in which the buyer may cancel during the inspection period in the buyer's sole discretion, but the seller has no obligation to make repairs. Repairs can still be negotiated. Related guide →

B

Base flood elevation (BFE)

The elevation that floodwater is expected to reach in a base (1%-annual-chance) flood, shown on FEMA flood maps. Comparing it to a home's elevation affects flood insurance pricing. Related guide →

Builder incentive

Money or features a builder offers to encourage a sale — closing-cost credits, rate buydowns or upgrades. Incentives are often tied to using the builder's preferred lender or title company. Related guide →

Buyer broker agreement

A written agreement between a buyer and their agent's brokerage describing the services and how the agent is paid. Since August 2024, MLS participants generally must have one in place before touring homes with a buyer. Related guide →

C

Cash to close

The total funds a buyer must bring to closing: down payment plus closing costs and prepaid items, minus the deposit already paid and any credits. Related guide →

CDD (Community Development District)

A special-purpose government created under Chapter 190 of the Florida Statutes to finance and maintain community infrastructure. Owners repay it through annual assessments, usually on the property tax bill, often split into debt service and operations and maintenance. Related guide →

Citizens Property Insurance

Florida's state-created, not-for-profit insurer for property owners who cannot find comparable private coverage. Eligibility and rules are set by the state. Related guide →

Closing Disclosure

The final federal form listing a mortgage's terms and every closing cost. For most loans, the buyer must receive it at least three business days before closing. Related guide →

D

Documentary stamp tax (deed)

A Florida tax on recorded deeds — $0.70 per $100 of consideration in every county except Miami-Dade. By custom the seller usually pays it, but the contract controls. Related guide →

Documentary stamp tax (note)

A Florida tax of $0.35 per $100 on a promissory note, such as a new mortgage. It is normally a buyer closing cost when financing. Related guide →

E

Earnest money (escrow deposit)

The deposit a buyer delivers under the contract to show commitment. It is held by the named escrow agent and normally credited to the buyer at closing. Related guide →

Elevation certificate

A document prepared by a licensed surveyor or engineer showing a building's elevation relative to the base flood elevation. It can be used to rate flood insurance. Related guide →

Escrow account (impound)

An account the lender uses to collect a monthly share of property taxes and insurance with the mortgage payment, then pay those bills when due. Related guide →

Estoppel certificate

A statement from an HOA or condominium association showing dues, assessments and other amounts owed on a property, used by the closing agent to settle balances at closing. Related guide →

F

Flood disclosure

Under Florida Statutes § 689.302, sellers of residential property must disclose, at or before contract signing, known flood damage during their ownership, flood insurance claims and federal flood assistance received. Related guide →

Flood zone (AE, VE, X)

FEMA map designations. AE and VE are special flood hazard areas where federally backed lenders require flood insurance; VE adds wave action. X zones are moderate- or lower-risk, where coverage is optional but still available. Related guide →

Four-point inspection

A limited inspection of a home's roof, electrical, plumbing and HVAC that many Florida insurers require for older homes before writing a policy. It is not a full home inspection. Related guide →

H

Homestead exemption

A Florida property tax exemption for a permanent residence owned and occupied on January 1. In 2026 it totals $51,411: $25,000 against all taxes plus an inflation-indexed amount against non-school taxes. File with the county property appraiser by March 1. Related guide →

Hurricane deductible

A separate homeowners-insurance deductible for hurricane damage, often a percentage of the dwelling coverage rather than a flat dollar amount. Related guide →

I

Inspection period

The contract window for inspections. Under the Florida AS IS contract, the buyer can cancel within it for any reason; missing the deadline can waive that right. Related guide →

Intangible tax (mortgage)

A Florida tax of 0.2% (2 mills) on the amount of a new mortgage recorded in the state, usually paid by the buyer. Related guide →

L

Lot premium

An added price a builder charges for a more desirable homesite — water or preserve views, larger or corner lots, or no rear neighbors. Related guide →

M

Millage rate

The tax rate applied to taxable value: one mill equals $1 per $1,000 of taxable value. Each taxing authority sets its own rate every year. Related guide →

N

Non-ad valorem assessments

Charges on the property tax bill that are not based on value — for example solid waste, stormwater, fire service or CDD assessments. Homestead exemptions do not reduce them. Related guide →

P

Portability

A Florida rule that lets a homesteaded owner transfer up to $500,000 of accumulated Save Our Homes benefit to a new Florida homestead, generally if the new homestead is established within three years. Related guide →

Pre-approval

A lender's conditional commitment after reviewing credit, income and assets — stronger than a pre-qualification, which is usually based on unverified information. Related guide →

Preferred lender

A lender a builder or seller recommends, often tied to incentives. Buyers can usually compare outside lenders, but may give up the incentive. Related guide →

R

Rate buydown

Paying up front to lower a mortgage rate, either temporarily (for example a 2-1 buydown) or for the life of the loan (a permanent buydown). Related guide →

Reassessment after sale

When a Florida home sells, its assessed value generally resets to market value the following January 1, so a new buyer's taxes can be much higher than the seller's bill. Related guide →

S

Save Our Homes (SOH) cap

A limit on how much a homestead's assessed value can rise each year: 3% or the change in CPI, whichever is lower. Related guide →

Seller concessions

Money the seller agrees to put toward the buyer's closing costs, prepaid items or a rate buydown, subject to loan-program limits. Related guide →

Sinkhole vs. catastrophic ground cover collapse

Florida homeowners policies must cover catastrophic ground cover collapse; broader sinkhole coverage is usually optional and priced separately. Related guide →

T

Title insurance (owner's policy)

A one-time policy protecting the owner against covered defects in title. Who customarily pays varies by Florida county, and the contract can assign it either way. Related guide →

TRIM notice

The Notice of Proposed Property Taxes mailed each August. It shows the proposed millage, assessed value, exemptions and public hearing dates. Related guide →

V

VA funding fee

A one-time fee on most VA-guaranteed loans that can be financed. Veterans receiving VA disability compensation are generally exempt. Related guide →

W

Wind mitigation inspection

An inspection documenting roof shape, roof-to-wall connections, roof deck attachment and opening protection. Florida insurers must offer discounts for qualifying features. Related guide →