Orlando real estate glossary
The terms every buyer and seller actually needs to know.
Plain-language definitions for the 37 real estate terms that come up most in Orlando and Florida transactions — pricing, mortgages, inspections, insurance, taxes, and the closing process.
6 terms
Buying
- Buyer Representation Agreement
- A written contract between a buyer and a real estate agent defining the agent's duties, compensation, term, and geographic scope. Required by most states post-NAR settlement (2024). Specifies who pays the buyer's agent (buyer or seller via concession) and how much.
- Pre-Approval
- A lender's written commitment to lend up to a specified amount to a borrower, after verifying income, assets, credit, and debts. Pre-approval is stronger than pre-qualification (which is unverified) and is typically required by Orlando listing agents before showings or offers.
- Earnest Money Deposit (EMD)
- Funds the buyer deposits into escrow upon contract acceptance to demonstrate good-faith commitment. In Florida, typically 1–3% of purchase price. Held by a neutral third party (title company or attorney) and applied to closing costs at closing. Forfeited if the buyer terminates outside contract contingencies.
- Escalation Clause
- An offer provision that automatically increases the buyer's price by a stated increment above any verified competing offer, up to a maximum cap. Used to win bidding wars without committing to the maximum price upfront.
- Contingency
- A condition in a purchase contract that must be satisfied before closing. Common contingencies: inspection, financing, appraisal, sale of buyer's existing home, and HOA document review. If a contingency cannot be satisfied, the buyer can typically terminate and recover earnest money.
- As-Is Contract
- A Florida purchase contract giving the buyer the right to inspect and terminate within the inspection period for any reason, but no right to demand repairs. The buyer accepts the property in its current condition (subject to any disclosures). Used by buyers competing on terms in multi-offer situations.
6 terms
Selling
- Comparative Market Analysis (CMA)
- An agent-prepared report estimating a home's market value using recent comparable sales (within 90 days, in the same submarket), active listings, and pending transactions. Adjusted for differences in size, lot, condition, upgrades, and location. The foundation of an accurate list price.
- Listing Agreement
- A written contract between a seller and a real estate brokerage authorizing the brokerage to market and sell the property. Specifies term, list price, commission, and the brokerage's duties. Most are exclusive right-to-sell agreements lasting 60–180 days.
- Days on Market (DOM)
- The number of days a listing has been active on MLS. As of May 2026, the metro Orlando average is approximately 58 days, varying by neighborhood from 46 (College Park) to 98 (Golden Oak). High DOM signals overpricing or presentation issues; very low DOM signals strong market positioning.
- Sale-to-List Ratio
- The final sale price divided by the most recent list price, expressed as a percentage. Orlando's metro-wide ratio is approximately 97.2% as of May 2026, meaning sellers net about 97 cents per dollar of list price after negotiation. Below 95% suggests overpricing; above 100% means buyers paid over asking.
- Pre-Listing Inspection
- A home inspection commissioned by the seller before listing, allowing the seller to identify and address issues on their timeline rather than under contract pressure. Cost is typically $350–$600 in Orlando. Often delivers strong return on investment by reducing buyer-side renegotiation leverage.
- Seller Concession
- Money the seller contributes to the buyer at closing, typically toward closing costs or rate buydowns. In Orlando's 2026 market, concessions of 2–3% of sale price are standard. On a $550,000 home, expect to budget $11,000–$16,000 in concessions into your net sheet.
8 terms
Mortgage
- PMI (Private Mortgage Insurance)
- Insurance protecting the lender against borrower default, required on conventional loans with less than 20% down. Typically costs 0.3–1.5% of loan amount annually. Drops off automatically at 78% loan-to-value on conventional loans, but typically lasts the life of the loan on FHA loans.
- PITI
- Principal, Interest, Taxes, and Insurance — the four components of a typical monthly mortgage payment. Florida buyers should also factor HOA dues (if applicable) and CDD fees. A complete PITI estimate is essential to assess affordability.
- FHA Loan
- A mortgage insured by the Federal Housing Administration, allowing 3.5% down with credit scores of 580+. FHA loans require mortgage insurance for the life of the loan in most cases and have stricter property condition requirements than conventional loans.
- VA Loan
- A mortgage guaranteed by the Department of Veterans Affairs, available to qualifying veterans, active-duty military, and surviving spouses. Allows 0% down with no PMI. The most generous loan structure available in the U.S. for those who qualify.
- Conventional Loan
- A mortgage not insured or guaranteed by a federal agency, typically requiring 3–20% down and credit scores of 620+. Best rates and terms available above 740 credit and 20% down. Most flexible loan type for property condition and occupancy.
- Jumbo Loan
- A mortgage exceeding the conforming loan limit set by the FHFA — $766,550 for most counties in 2026. Common in Windermere, Isleworth, and luxury Dr. Phillips. Requires stronger credit, larger down payments (often 20%+), and more reserves than conventional loans.
- Rate Buydown
- A seller-paid concession that temporarily or permanently reduces the buyer's mortgage interest rate. The 2-1 buydown reduces the rate by 2 percentage points in year one and 1 in year two before settling at the note rate. Common in 2026 to offset elevated rates and attract buyers.
- Debt-to-Income Ratio (DTI)
- The percentage of gross monthly income that goes toward debt payments. Lenders use front-end DTI (housing only, ideally under 28%) and back-end DTI (all debts, ideally under 36%). DTI above 43% typically disqualifies borrowers from conventional loans, though FHA allows up to 50% in some cases.
7 terms
Closing
- Title Insurance
- Insurance protecting against title defects: undiscovered liens, ownership disputes, fraud, errors in public records. Florida requires a lender's policy and offers an optional owner's policy. One-time premium at closing, regulated and promulgated. On a $500K home, owner's policy typically runs around $2,500.
- Escrow
- Two distinct meanings. Pre-closing: a neutral third party (title company or attorney) holding earnest money and closing funds. Post-closing: a portion of the monthly mortgage payment that funds property tax and insurance reserves, paid out by the lender when due. Required on most loans with under 20% equity.
- Closing Costs
- Fees and expenses paid at closing beyond the purchase price. Buyer closing costs in Florida typically run 2–4% of purchase price. Seller closing costs typically run 7–10% (including agent commissions, doc stamp tax, title insurance, and prorated taxes).
- Appraisal
- A licensed appraiser's independent estimate of a property's market value, ordered by the lender during financed transactions. If the appraisal comes in below the contract price, the buyer can request a price reduction, increase the down payment to cover the gap, or terminate via the appraisal contingency.
- Settlement Statement
- The document detailing all financial transactions in a real estate closing. Required to be provided to the buyer 3 days before closing under federal TRID rules. Lists purchase price, loan amount, closing costs, prorations, and net amounts to or from each party.
- Deed
- The legal document transferring ownership of real estate from seller to buyer. In Florida, the most common is the warranty deed (which guarantees clear title) followed by the special warranty deed and quitclaim deed (which makes no warranties). Recorded in county public records to establish ownership.
- Recording Fee
- The fee charged by a Florida county clerk to record the deed and mortgage in public records. Typically $10 for the first page and $8.50 for each additional page, plus an intangible tax on the mortgage amount. Recording is essential to establish legal title and lien priority.
10 terms
Florida-Specific
- Homestead Exemption
- A Florida property tax benefit available to owners whose property is their primary residence. Reduces taxable value by $50,000 and caps annual assessed value increases at 3% (the Save Our Homes provision). File with the county property appraiser by March 1 of the year following purchase.
- Documentary Stamp Tax
- A Florida transfer tax levied on the deed at $0.70 per $100 of sale price ($0.60 in Miami-Dade County). On a $500,000 sale, that's $3,500. Customarily paid by the seller, though negotiable. A separate intangible tax of 0.2% applies to mortgage amounts.
- CDD (Community Development District) Fee
- A Florida special-purpose government tax that funds infrastructure (roads, utilities, drainage) in master-planned communities like Lake Nona, Horizon West, and Celebration. Appears on the property tax bill — separate from HOA fees. Typically $1,500–$4,500/year, declining over 20–30 years as bonds are paid off.
- HOA (Homeowners Association)
- A private organization that governs and maintains a residential community. HOA fees fund amenities, security, and common areas — typically $100–$1,000+/month in Orlando depending on community. HOAs also enforce architectural standards and use restrictions. Both HOA and CDD can apply to the same home.
- 4-Point Inspection
- A Florida-specific inspection covering roof, electrical, plumbing, and HVAC. Required by most insurance carriers for homes over 25–40 years old. Determines insurability — if any of the four systems fail, you may not be able to obtain standard homeowner's insurance. Typically $75–$150.
- Wind Mitigation Inspection
- An inspection documenting hurricane-resistant features (roof shape, attachment, secondary water resistance, opening protection). Insurance carriers offer 20–45% premium discounts for homes with strong wind mitigation. Typically $75–$150, almost always pays for itself in first-year insurance savings.
- Flood Zone
- A FEMA-designated area indicating flood risk. Zone X is low-risk and does not require flood insurance. Zones A, AE, V, and VE are Special Flood Hazard Areas requiring federally backed flood insurance for federally backed mortgages. Most Orlando neighborhoods are Zone X; many lakefront and lowland properties are not.
- Hurricane Deductible
- A separate, larger deductible that applies to hurricane-related claims under Florida homeowner's insurance, typically 2–5% of dwelling coverage. On a $500,000 home with a 2% hurricane deductible, the buyer would pay the first $10,000 of hurricane damage. Distinct from the standard all-perils deductible.
- Estoppel Letter
- A document from an HOA or condo association stating the current account balance and any unpaid assessments for a property at the time of sale. Required at closing for any property in an association. Florida law caps estoppel fees at $299 (or $399 with delinquency). Typically paid by the seller.
- Save Our Homes (SOH)
- A Florida constitutional amendment limiting annual increases in homesteaded property's assessed value to 3% or the change in the Consumer Price Index, whichever is lower. Creates the gap between market value and assessed value over time. Lost on sale; new owners pay tax on full market value initially.
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