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Many of you have asked for me to explain the jargon that real estate professionals, builders and newspaper advertising use concerning real estate. Here is some of these buzz words that I have translated to plain English. Additionally, I have included other words that you will encounter during a typical real estate transaction.
United States Glossary of Terms [A][B][C][D][E][F][G][H][I][J][K][L][M][N][O][P][Q][R][S][T][U][V][W][X][Y][Z] A A/C: Air Conditioning Acceleration Clause: a loan provision giving the lender the right to declare the entire amount of the loan balance immediately due and payable upon the violation of a specific loan provision, as in failure to make payments on time. Adjustable-Rate Mortgage / (ARM): this is a mortgage loan that allows the interest rate to be changed at specific intervals over the maturity of the loan. Ad Valorem Tax: this is a tax that is based on the value of the property being taxed. Most cities, schools, and counties raise most of their tax revenue from this kind of tax. A-Frame House: This is a post-World War style home with a frame in shape of one or more A's. Agency: this is the legal relationship between a principle ( buyer or seller) and his Agent arising from a contract in which the principle engages the agents to perform certain acts on the principal's behalf. Agency Disclosure: In the State of Florida a written document explains to the client the role that the broker, realtor plays in the transaction. The purpose of these disclosures is to explain which party the broker owes loyalty to. FLORIDA LAW REQUIRES THAT REAL ESTATE LICENSEES PROVIDE A BROKERAGE RELATION DISCLOSURE FORM TO ALL POTENTIAL SELLERS AND BUYERS OF REAL ESTATE. This form indicates that you should not assume that any real estate broker or salesperson represents you unless you agree to engage a real estate licensee in an authorized brokerage relationship, either as a single agent or as a transaction broker. You are advised not to disclose any information you want to be held in confidence until you make a decision on representation. Dual Agents are not allowed in the State of Florida. The typical forms of Agency are: Single Agent: FLORIDA LAW REQUIRES THAT REAL ESTATE LICENSEES OPERATING AS SINGLE AGENTS DISCLOSE TO BUYERS AND SELLERS THEIR DUTIES. As a single agent, the brokerage firm and its associates owe to you the following duties: 1. Dealing honestly and fairly 2. Loyalty 3. Confidentiality 4. Obedience 5. Full disclosure 6. Accounting for all funds 7. Skill, care, and diligence in the transaction; and 8. Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing and 9. Disclosing all known facts that materially affect the value of residential real property and are not readily observable. Transaction Broker: FLORIDA LAW REQUIRES THAT REAL ESTATE LICENSEES OPERATING AS TRANSACTION BROKERS DISCLOSE TO BUYERS AND SELLERS THEIR ROLE AND DUTIES IN PROVIDING A LIMITED FORM OF REPRESENTATION. As a transaction broker, the brokerage firm and its associates, provide to you a limited form of representation that include the following duties: 1. Dealing honestly and fairly 2. Accounting for all funds 3. Using skill, care, and diligence in the transaction 4. Disclosing all known facts that materially affect the value of real property and are not readily observable to the buyer 5. Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing 6. Limited confidentiality, unless waived in writing by a party. This limited confidentiality will prevent disclosure that the seller will accept a price less than the asking or listed price, that the buyer will pay a price greater than the price submitted in a written offer, of the motivation of any party for selling or buying property, that a seller or buyer will agree to financing terms other than those offered, or any other information requested by a party to remain confidential: and 7. Any additional duties that are entered into by this or by separate written agreement. Limited representation mean that a buyer or seller is not responsible for the acts of the licensee. Additionally, parties are giving up their rights to the undivided loyalty of the licensee. This aspect of limited representation allows a licensee to facilitate a real estate transaction by assisting both the buyer and the seller, but a licensee will not work to represent one party to the detriment of the other party when acting as a transaction broker to both parties. Transition from Single Agent to Transaction Broker FLORIDA LAW ALLOWS REAL ESTATE LICENSEES WHO REPRESENT A BUYER OR SELLER AS A SINGLE AGENT TO CHANGE FROM A SINGLE AGENT RELATIONSHIP TO A TRANSACTION BROKERAGE RELATIONSHIP IN ORDER FOR THE LICENSEE TO ASSIST BOTH PARTIES IN A REAL ESTATE TRANSACTION BY PROVIDING A LIMITED FORM OF REPRESENTATION TO BOTH THE BUYER AND THE SELLER, THIS CHANGE IN RELATIONSHIP CANNOT OCCUR WITH YOUR PRIOR WRITTEN CONSENT. Amenities: this is the non-monetary benefits that are derived
from property ownership. Like a prime location close to the
beach, community pool, park etc. B Balloon Mortgage & Balloon Payment: a mortgage with a balloon payment. Example a payment of $500 per month for 5 years, followed by a final payment of the entire balance. Bonus Room: a large, finished room that can be converted into any kind of room the homeowner desires. Examples are: servant's quarters, play rooms, mother-in-laws apartment, game rooms etc. These rooms are typically found above the garage. Built-Ins: appliances or other equipment that are constructed as part of the building rather than left freestanding and movable. Butler's Pantry: this is a storage room or service room that is between the kitchen and dining room. Buyer's Broker: an agent hired by a prospective purchaser to find real estate for purchase. The broker then represents the buyer and negotiates with the seller for the purchaser's best interest Buyer's Market: this is a marketplace where buyers have a wide
choice of inventory in homes to find a acceptable property of their
choice. This usually will lower prices of homes in the market. C Cabana Bath: this is a bathroom that has two doors accessible from both inside and outside he house. CBS: This is a home built with concrete block and is typically finish with stucco or other types of siding. Clear Title: this is a marketable title free of clouds and disputed interests. Coach House: One of two, three or four homes in a two-story building. Each coach home has its own garage and entrance. Closing: the process of transferring ownership of property from seller to buyer as specified in the sales contract. Closing Costs: various expenses and fees payable by the seller and buyer at the time of closing. Examples are inspection fees, appraisal fees, deed recording fees, attorney's fees title insurance premium lender discount points and brokerage commissions. Contingent Clause: provisions in a contract that some or all terms of the contract will can alter or cease to exist upon certain events. Example; buyer will buy from seller if loan is able to be obtained for the property, if not contract can not be enforced. Courtyard Home: A floor plan that presents the courtyard as the
main entrance of the home. To enter the home, you must walk
through the front courtyard which normally includes a pool or guest
home located within the yard. D Deposits: money paid in good faith to assure performance of the contract. Discount Points: this is typically money paid to the lender at the time of origination of a loan. To account for the difference between the market interest rate and the lower face rate of the note. Dormer Window: a window projecting through a sloping roof. Duplex: a unit consisting of two attached homes. E Eat-in-Kitchen: combines the breakfast nook and the kitchen. Effective rate: the true rate of return considering all relevant financing charges. Efficiency Unit: small dwelling unit. Usually consisting of a small room within a multifamily structure. Escrow: an agreement between two or more parties providing that certain monies or property be placed with a third party for safekeeping, pending the closing of property. Exclusive Right of Sale Listing Agreement: an employment agreement contract giving the Broker the right to collect commission if the property is sold by anyone, including the owner, during the term of the agreement. European-style cabinets: Frameless cabinets without knobs. F FHA: FEDERAL HOUSING ADMINISTRATION FHA LOAN: a mortgage loan insured by the FHA FSBO: For sale by owner G Garden Tub: Roman tub Gated Community: a fenced housing community typically with a security guard. Gathering Room: Family room Ginnie Mae: nickname for government National Mortgage Association Good Morning Room: Breakfast room Grand Room: a combined formal living and dining room combination. Grantee: the party to whom the title to real property is conveyed Grantor: anyone who gives a deed. Great Room: Combines the kitchen, breakfast nook and family room into one large open area. Guest House: a detached bedroom with bathroom and some have a kitchen. Guest Suite: usually a private bathroom combined
with bedroom. The interior bedroom also may be designed with
a sitting room or kitchenette. H Handyman's Special: slang in newspaper advertising referring to a house that needs repair and is usually selling at a below market price. Hazard Insurance: a form of insurance that protects a owner form certain kind of risks. High Rise: usually refers to a building of over 6 stories. Hip Roof: a roof formed by four walls sloped in different directions and two larger sides forming a ridge at the top. His-and-hers bathrooms: two separate bathrooms in the master suite. Historical District: A designated area that buildings are considered to have some significant historic character. Certain areas are eligible for specific federal assistance programs. Historical House: a home that is officially recognized for its historical significance that has special status under the 1976 Tax Reform Act, that encourages rehabilitation instead of demolition. Home Equity Loan: a loan secured by a second mortgage on a persons principle residence. Home Improvement Loan: a loan secured by a mortgage to be used to improve the property. Home Inspection: a professional who evaluates the structural and general condition of a home before being sold. Most inspectors are licensed and insured. Homeowners Association: an organization that is comprised of homeowners in a particular subdivision. They enforce the general deed restrictions and manage the common property and elements of the community. HOW or Homeowners Warranty Program: a private insurance company that insures against certain defects of homes. Homestead Exception: a deduction in assessed value for one's principal residence. Hud: Housing and Urban Development Department. HVAC: Jargon for Heating, Ventilation, and Air Conditioning I J Lease with option to Purchase: a lease that provides the Tenant the right to purchase the property at an agreed-upon price under certain conditions. Lis Pendens: Recorded Notice of a filing of some type of suit which may affect title of property. Loan Application Fee: These are charges required by the loan originator to be paid by the borrower to cover such charges as: credit reports, property appraisals, surveys, and other incidental expenses associated with underwriting the loan. Loan Commitment: this is a agreement to lend a specific amount of money for a specific amount of time to either purchase a home or to build a home. Loan Package: is the collection of documentation as applications, income verification, of borrowers income and down payment documents, credit verification, appraisals of property, etc. Loan-to-Value Ratio: sometimes referred to as RTV this is the portion of the amount borrowed compared to the cost or value of the property that you are purchasing. Location-Location-Location: the three most important factors in real estate. Locked-In-Interest Rate: this is the rate promised by a
lender at the time of a loan application. This promise is
a legal commitment of the lender, though there may be certain qualifications
or contingencies of the lender to change to a higher rate. M Management Fees: this is the cost that owners pay for professional management of their property. Many condominium associations for example have professional on-site managers to care for property. This also applies to fees that investors will pay for a professional to manage their investment property. Mansard Roof: this is a roof having two slopes of all four sides,
with the lower slope steeper than the upper, flatter sections. N Nonconforming Use: a use of property that violates local
zoning regulations. O Open End Mortgage: a type of mortgage which the mortgagor, which is the borrower may secure additional funds from the lender, mortgagee. There is usually a limit that has been established in such mortgages. Open House: this is a showing of a home for sale whereby the home is open for inspection by interested persons. Many real estate agents use this to increase traffic and is a popular way to expose the property to many people in a short time frame. Ordinances: these are municipal rules governing the use of land. Origination Fees: charges to a borrower to cover the costs
of issuing the loan. Examples are credit checks, appraisal
and title expenses. P Plus Den: One of the bedrooms can be converted into a den. Powder Room: a half bath, which features a sink and toilet but not a tub or shower. Prepaid Expenses: amounts that are paid prior to the period they cover. Prepaid Interest: interest that is paid in advance of the time it is earned. Prepayment Clause: a clause in a mortgage that gives the borrower the right of paying the mortgage balance off before it comes due. Sometimes there is a penalty for prepayment with the wavier of the interest not yet due. Prepayments: advance payments of expenses like insurance and taxes that are kept in a escrow fund. Presale: a sale of proposed properties prior to closing of the property that a person is purchasing. Prime Rate: is the lowest short term commercial interest rate charged by banks to their best customers. Mortgage rates are normally higher than the prime rate. Principle, Interest Payments: (PI) a monthly payment that includes the interest charges for that time and plus the amount applied to the amortization of the principle balance. Principle, Interest, Taxes and Insurance Payment: (PITI) a monthly payment that includes the interest charges for that time and plus the amount applied to the amortization of the principle balance in addition to property taxes and property insurance. Principle Residence: the primary place were one lives. To defer capital gains taxes on the profit from a home, the home must be used as the taxpayer's principle residence. Private Mortgage Insurance: this is a kind of default insurance on conventional loans usually a condition on low down payments home loans. Purchase Money Mortgage: a mortgage given by a buyer to
a seller in part payment of the purchase price of real estate. Q Quickclaim Deed: a deed that conveys only the grantor's
rights or interest in real estate. This is usually used to
remove possible clouds on the title. R Real Property: the rights to use real estates. This is also used in place of real estate in some contracts. Realtor®: these are professionals in the real estate business who subscribe to a strict code of ethics as a member of the local and state boards along with the national Association of Realtors. Not all licensed real estate agents are Realtors®. Recording: the process of recording instruments into the books of public record. Examples are: deeds, leases and liens. Resident Manager: a person who supervises the care of a apartment complex and lives in the complex. Restriction: a limitation usually placed upon the use of property that is contained in the deed or other written documents. Reverse Annuity Mortgage: this is a type of mortgage that is designed for mostly the elderly homeowners that have substantial equity in their homes. The lender periodically usually monthly pays an amount to the borrower in which the loan balance increases with interest and periodic payments causing this type of loan to have negative amortization. Right of Survivorship: this is the right of a surviving joint tenant to acquire the interest of a deceased joint owner. This is the distinguishing features in Tendency by the Entirety and Joint Tenancy. Riparian Rights: these are rights that apply to the use of water adjacent to an owners land. Roman Shower: this is a walk-in shower stall that is large
enough for two and usually has an entrance from two sides. S Secondary Mortgage Market: this is a mechanism available to buy or sell mortgages, that is used mainly with residential mortgages. Security Deposit: this is a cash payment required by a landlord that is help during the term of the lease to offset any damages by the tenant. Different states have different laws on how the deposit is kept by the landlord. Seller Financing: this is a debt that is taken back by the seller as part of the purchase prince for real estate. This type of financing can be in the form of either a first or second mortgage. Seller's Market: this is a market in which the condition favor the seller with low inventories of available homes available for sale. This condition usually will reflect higher home prices in the market. Single-Family Housing: a detached house. Spec House: a single family home that has been built with the anticipation of finding a buyer. Special Warranty Deed: this is a deed that the grantor limits the title of warranty given to the grantee. This type of deed does not warrant against title defects arising from situations that existed before the grantor owned the property. Statute: this is a law established by an act of legislature. Statue of Frauds: a state law that provides that certain conditions must be in writing so that they can be enforceable. Subject Property: a term used in appraisal that specifies the home being appraised. Summer Kitchen: an area on the patio that includes a barbecue grill, refrigerator and a sink. Survivorship: the right of a joint tenant or tenants to
maintain ownership rights that follow the death of another joint
tenant. T Tax Foreclosure: this is a process of enforcing a lien against property for nonpayment of delinquent property taxes. Tax Lien: this is a debt attached to a property for failing to pay taxes. Tenancy: is the right of possession of real property. Other Tenancy include: Tenancy at Sufferance, which is when a person who has had a lawful right of possession has stayed past the time specified. Tenancy at Will, is a license to use or occupy at the will of an owner. Tenancy by the Entirety, is an estate that exists only between a husband and a wife that both have equal right of possession of real property and have a right of survivorship. Tenancy for Life, is a freehold interest in real property that expires at death. Tenancy for Years, a fixed term of years. Tenancy in Severalty, is ownership of property by one person or a legal entity. Tenant: one that is given possession of real estate at a fixed period of time. Time Sharing: this is a form of property ownership that is held by a number of people. Each have a right of possession as specified in time intervals. This is very common in vacation properties. Title: a document that gives evidence that the owner of real property is in lawful possession. Title Company: is a business that examines title to real estate. Title Insurances: is a policy that protects the holder from loss that result from clouds on the title. Title Search: is a process of examining the public records to determine ownership and to detect any encumbrances affection the given property. Town House: a dwelling that generally has 2 or more floors and attached to a similar unit by common side walls. Town Houses can either be found in Homeowners Associations or Condominium Associations. Transom: a window set above a door or another window. Tray Ceiling: a flat ceiling with the center portion raised, Triple Net Lease: is a lease that the tenant is required to pay
all operating expenses associated with the property. U Unencumbered Property: real estate that is free and
clear of title defects or liens. V Vaulted Ceiling: a arched ceiling. Veranda: a long covered porch. Villa: a smaller home, usually on a zero-lot site, that
is detached or can be connected to another home by a common wall. W Walk through Inspection: an inspection of property by the buyer of real estate prior to closing or taking possession. Warranty: a promise in form of a contract. Warranty Deed: a deed that contains a covenant the grantor will protect the grantee against all claims against the deed. Water closet: a place with a toilet and often a sink. Water Table: the highest level in which underground water is normally encountered in a particular area. Wraparound Mortgage: this is a mortgage that includes in its
balance an underlying mortgage. Instead of having a distinct
and separate first and second mortgages, a wraparound mortgage
includes both. Z Zoning: this is a legal mechanism for local governments
to regulate the use of privately owned real property by specific
application of the use of police power to prevent conflicting
land use that promotes orderly development. |
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Singer Island Office: 1250 North Ocean Drive Suite 4 Singer Island, FL 33404
Abacoa Office: 4163 Main Street
Jupiter, Florida 33458
561-685-0976 | E-mail:
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