Florida Real Estate Glossary: Terms Every Buyer and Seller Needs to Know

Florida real estate has a vocabulary that's specific to the state — terms and concepts that buyers from other states often encounter for the first time in a Florida transaction. Here's the definitive glossary.

Contract and transaction terms

AS IS contract (Florida AS IS Residential Contract for Sale and Purchase) Florida's standard purchase agreement. "AS IS" means the seller isn't pre-committing to make repairs as a condition of the sale. Buyers retain full inspection rights during the inspection period and can cancel for any reason during that window. This is NOT a distressed-property clause — it's used in nearly all Florida residential transactions.

Inspection Period The negotiated window (typically 10–15 days) during which buyers can conduct inspections and cancel the contract for any reason with full deposit return. The inspection period is the buyer's primary protection in the AS IS contract — after it expires, canceling without a specific contingency (financing failure, appraisal shortfall) risks the earnest money.

Earnest Money Deposit (EMD) A good-faith deposit submitted with a purchase offer — typically 1–3% of the purchase price in Central Florida. Held in escrow (by the title company or real estate brokerage) and applied to the buyer's closing costs at closing. Returned in full if the buyer exercises their inspection period termination right; at risk if the buyer backs out without a valid contractual contingency after the inspection period.

Documentary Stamp Tax (Doc Stamp) Florida state transfer tax:

• On the deed (paid by seller): $0.70 per $100 of sale price (0.70%)
• On the mortgage (paid by buyer): $0.35 per $100 of loan amount (0.35%)

Intangible Tax Florida tax on mortgage notes: $0.20 per $100 of loan amount (0.20%) — paid by the buyer at closing.

Seller's Property Disclosure Florida's required disclosure form — sellers must complete it honestly, disclosing all known material defects. Required in AS IS and all other Florida purchase contract forms. Signing a false disclosure creates fraud liability even if the sale is AS IS.

Closing Agent / Title Company In Florida, the title company typically serves as the closing agent — receiving documents, coordinating the closing, managing wire transfers, and recording the deed and mortgage. Attorneys are not required to be present at closing (unlike New York), though buyers and sellers may hire one for review.

Owner's Title Insurance An insurance policy that protects the buyer's ownership interest against title defects — forgery, missing heirs, recording errors, undisclosed liens — that existed before closing. In Central Florida, the custom is for the seller to pay the owner's title insurance premium (unlike most states where the buyer pays).

Lender's Title Insurance (Loan Policy) Required by all mortgage lenders; protects the lender's interest up to the loan amount. Always buyer-paid. Separate from the owner's policy — the lender's policy does NOT protect the buyer.

Property tax terms

Homestead Exemption Florida's property tax exemption for primary residences — reduces assessed value by $50,000 (first $25,000 applies to all taxes; second $25,000 to non-school taxes). Must be filed by March 1 of the tax year; not automatic. On application, the property becomes eligible for the Save Our Homes cap.

Save Our Homes (SOH) Cap Constitutional cap limiting annual increases in assessed value for homestead properties to 3% or CPI change, whichever is less. Once established, the assessed value can fall far below market value over time — resulting in dramatically lower property taxes than comparably-valued newer purchases.

Portability The ability to transfer accumulated Save Our Homes benefit to a new Florida homestead purchase. Allows sellers who've built up SOH benefit to reduce their new home's assessed value (up to $500,000 transferred benefit). Must apply within 3 years of abandoning the prior homestead.

Millage Rate The tax rate applied to assessed value — expressed in mills (1 mill = $1 per $1,000 of assessed value). Florida property taxes are calculated by multiplying the millage rate by the assessed value (after exemptions). Orange County runs approximately 19–21 mills combined; Seminole County is similar.

CDD (Community Development District) A special-purpose government entity that finances and manages infrastructure — roads, utilities, stormwater, community amenities — through bond issuance. CDD fees (assessments) appear on property tax bills and run 20–30 years from bond issuance. CDDs are common in master-planned communities built after 2000 (Horizon West, Lake Nona, ChampionsGate, Nocatee, etc.).

Inspection terms

General Home Inspection A comprehensive inspection of the home's systems and structure — roof, foundation, HVAC, electrical, plumbing, windows, and more. Performed by a licensed Florida home inspector. Cost: $350–$600 for most homes.

WDO Inspection (Wood-Destroying Organism) Florida's termite inspection — performed by a licensed pest control operator, not the general home inspector. Checks for subterranean and drywood termites, wood decay fungi, and other wood-destroying organisms. Cost: $75–$150. Separate from the general inspection; required by most lenders.

4-Point Inspection A limited inspection evaluating four systems: roof, HVAC, electrical, and plumbing. Required by many Florida insurance carriers for homes over 20–25 years old as a condition of coverage. Performed by a licensed inspector; cost $75–$150. Results affect insurability and insurance premiums.

Wind Mitigation Inspection An inspection documenting construction characteristics affecting wind resistance — roof shape, deck attachment, roof-to-wall connections, opening protection. Submitted to the insurance carrier for potential discounts on the wind portion of the premium (often 20–60% savings). Cost: $150. High-ROI inspection for most Florida homeowners.

Sinkhole Inspection Florida-specific — geological assessment for sinkhole activity. Particularly relevant in west Central Florida (Hernando, Pasco, Hillsborough counties) where sinkhole activity is more prevalent. Cost: $500–$2,000+ depending on depth and methodology.

Community and HOA terms

HOA (Homeowners Association) A private organization governing a residential community — enforcing CC&Rs, maintaining common areas, and collecting monthly dues. HOA fees vary from $50/month (minimal) to $500+/month (resort amenities). HOA governing documents (CC&Rs, bylaws, rules) should be reviewed before closing.

CC&Rs (Covenants, Conditions, and Restrictions) The governing document for HOA communities — specifying what homeowners can and cannot do with their property. Covers exterior modifications, parking, pets, rental restrictions, and more. Enforceable and binding on all owners within the community.

Master HOA vs Sub-HOA Many large planned communities have a master HOA (governing the entire development) plus individual sub-community HOAs. Both charge separate fees; total fees are the combined amount. Common in Horizon West, Lake Nona, Nocatee, and other large master-planned communities.

CDD vs HOA CDDs and HOAs serve different functions and are legally distinct. CDDs are governmental entities created under Florida law; HOAs are private membership associations. Both may coexist in the same community. CDDs primarily fund infrastructure through bonds; HOAs primarily maintain amenities and enforce standards through membership dues.

Flood and insurance terms

FEMA Flood Zone / SFHA (Special Flood Hazard Area) Areas designated by FEMA as having significant flood risk — 1% annual chance of flooding (100-year flood). Properties in SFHAs require flood insurance as a condition of federally-backed mortgages. Flood insurance is separate from homeowners insurance and can add $1,000–$5,000+/year to carrying costs.

Citizens Property Insurance Florida's state-chartered insurer of last resort — available when private market carriers won't insure a property or their rates are more than 20% above Citizens'. Citizens has coverage limitations and different claims handling than private carriers.

4-Point Pass/Fail Insurance terminology for the 4-point inspection result — whether the four systems (roof, HVAC, electrical, plumbing) pass carrier standards. A "fail" result may mean the carrier won't issue a policy, requires remediation, or increases premiums significantly.

Florida-specific concepts

Lady Bird Deed (Enhanced Life Estate Deed) A Florida deed that allows a property owner to designate a beneficiary who receives the property automatically at death — bypassing probate. The owner retains full control and use during their lifetime. A useful estate planning tool that avoids the time and cost of probate for the property.

Homestead Protection (creditor protection) Separate from the tax homestead exemption — Florida's constitutional homestead protection exempts a primary residence from forced sale for most creditor claims. This is why Florida is a favorable state for asset protection; the primary residence can be protected from creditors except for mortgage holders and property tax liens.

Florida AS IS Contract (vs. other state contracts) Unlike New York's attorney-review contract or California's CAR forms, Florida's AS IS contract moves quickly — binding within days of acceptance, with the inspection period being the primary due diligence window rather than ongoing attorney negotiation. Out-of-state buyers should understand this timeline difference before writing offers.

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Ryan Solberg explains Florida-specific concepts clearly to buyers and sellers throughout Central Florida. If you're navigating your first Florida transaction or want to understand a specific term — contact Ryan for a no-obligation consultation.