Real Estate in Cape Coral, Florida

Markus Hartwich, P.A., Realtor®

GRI (Graduate of Realtor Institute)
ACCRS (Accredited Cape Coral Residential Specialist)
RNCS (Residential New Construction Specialist)

Lexicon of Real Estate Terms in Florida

 Here is a collection of the main real estate terms used in Florida:

AD VALOREM TAX Taxes assessed based on the value of the land and improvements
ADDENDUM A supplement to any document that contains additional information pertinent to the subject. Appraisers use an addendum to further explain items for which there was inadequate space on the standard appraisal form.
ADJUSTABLE RATE MORTGAGE (ARM) A type of mortgage where the interest rate varies based on a particular index, normally the prime lending rate.
AMENITIES Any feature of a property that increases its value or desirability. These might include natural amenities such as location or proximity to mountains, or man-made amenities like swimming pools, parks or other recreation.
ANNUAL PERCENTAGE RATE (APR) The rate of annual interest charged on a loan.
APPLICATION A form used to apply for a mortgage loan that details a potential borrower's income, debt, savings and other information used to determine credit worthiness.
APPRAISAL A ''defensible'' and carefully documented opinion of value. Most commonly derived using recent sales of comparable properties by a licensed, professional appraiser.
APPRAISED VALUE An opinion of the fair market value of a property as developed by a licensed, certified appraiser following accepted appraisal principals.
APPRAISER An educated, certified professional with extensive knowledge of real estate markets, values and practices. The appraiser is often the only independent voice in any real estate transaction with no vested interest in the ultimate value or sales price of the property.
APPRECIATION The natural rise in property value due to market forces.
ARMS LENGTH TRANSACTION Any transaction in which the two parties are unconnected and have no overt common interests. Such a transaction most often reflects the true market value of a property.
ASSESSED VALUE The value of a property according to jurisdictional tax assessment.
ASSESSMENT The function of assigning a value to a property for the purpose of levying taxes.
ASSIGNMENT Transfer of ownership of a mortgage usually when the loan is sold to another company.
ASSUMPTION When a buyer takes over, or "assumes" the sellers mortgage.
BROKER An individual who facilitates the purchase of property by bringing together a buyer and a seller.
BUILDING CODE Regulations that ensure the safety and material compliance of new construction within a municipality. Building codes are localized to ensure they are adequate to meet the risk of common hazards.
DEPOSIT VERIFICATION Cash given along with an offer to purchase property, Also called EARNEST MONEY.
CERTIFICATE OF OCCUPANCY Issued by an appropriate jurisdictional entity, this document certifies that a building complies with all building codes and is safe for use or habitation.
CERTIFICATE OF TITLE A document designating the legal owner of a parcel of real estate. Usually provided by a title or abstract company.
CLEAR TITLE Ownership of property that is not encumbered by any counter-claim or lien.
CLOSING A torturous process designed to induce cramping in a home buyer's hands by requiring signature on countless pieces of documentation that nobody has ever read. Or, the process whereby the sale of a property is consummated with the buyer completing all applicable documentation, including signing the mortgage obligation and paying all appropriate costs associated with the sale (CLOSING COSTS).
CLOSING COSTS All appropriate costs generated by the sale of property which the parties must pay to complete the transaction. Costs may include appraisal fees, origination fees, title insurance, taxes and any points negotiated in the deal.
CLOSING STATEMENT The document detailing the final financial arrangement between a buyer and seller and the costs paid by each.
COMPARABLES An abbreviated term used by appraisers to describe properties which are similar in size, condition, location and amenities to a subject property whose value is being determined. The Uniform Standards of Professional Appraisal Practice (USPAP) establish clear guidelines for determining a comparable property.
CONDOMINIUM A development where individual units are owned, but common areas and amenities are shared equally by all owners.
CONSTRUCTION-PERM LOAN A loan made to a builder or home owner that finances the initial construction of a property, but is replaced by a traditional mortgage one the property is completed.
CONTINGENCY Something that must occur before something else happens. Often used in real estate sales when a buyer must sell a current home before purchasing a new one. Or, when a buyer makes an offer that requires a complete home inspection before it becomes official.
CONTRACT A legally binding agreement, oral or written, between two parties.
CREDIT HISTORY A loan of money for the purchase of property, real or personal. Credit is either secured by an asset, such as a home, or unsecured.
DEBT An obligation to repay some amount owed. This may or may not be monetary.
DEED A document indicating the ownership of a property.
DEFAULT The condition in which a borrower has failed to meet the obligations of a loan or mortgage.
DELINQUENCY The state in which a borrow has failed to meet payment obligations on time.
DEPRECIATION The natural decline in property value due to market forces or depletion of resources.
DWELLING A house or other building which serves as a home.
DOWN PAYMENT An amount paid in cash for a property, with the intent to mortgage the remaining amount due.
EARNEST MONEY DEPOSIT (EMD) A cash deposit made to a home seller to secure an offer to buy the property. This amount is often forfeited if the buyer decides to withdraw his offer.
EFFECTIVE AGE The subjective, estimated age of a property based on its condition, rather than the actual time since it was built. Excessive wear and tear can cause a property's effective age to be greater than its actual age.
EQUITY The difference between the fair market value of a property and that amount an owner owes on any mortgages or loans secured by the property.
ERRORS AND OMISSIONS INSURANCE An insurance policy taken out by appraisers to cover their liability for any mistakes made during the appraisal process.
ESCROW ACCOUNT An account setup by a mortgage servicing company to hold funds with which to pay expenses such as homeowners insurance and property taxes. An extra amount is paid with regular principal and interest payments that go into the escrow account each month.
ESCROW DISBURSEMENTS The payout of funds from an escrow account to pay property expenses such as taxes and insurance.
ESTATE The total of all property and assets owned by an individual.
FAIR MARKET VALUE The price at which two unrelated parties, under no duress, are willing to transact business.
FEE SIMPLE A complete, unencumbered ownership right in a piece of property.
FHA MORTGAGE A mortgage that is insured by the Federal Housing Administration (FHA).
FLOOD INSURANCE Supplemental insurance which covers a home owner for any loss due to water damage from a flood. Often required by lenders for homes located in FEMA-designated flood zones.
FLOOR PLAN The representation of a building which shows the basic outline of the structure, as well as detailed information about the positioning of rooms, hallways, doors, stairs and other features. Often includes detailed information about other fixtures and amenities.
FORECLOSURE The process whereby a lender can claim the property used by a borrower to secure a mortgage and sell the property to meet the obligations of the loan.
GRANTEE Any person who is given ownership of a piece of property.
GRANTOR Any person who gives away ownership of a piece of property.
HAZARD / HOMEOWNER INSURANCE Insurance covering damage to a property caused by hazards such as fire, wind and accident.
HOME INSPECTION A complete examination of a building to determine its structural integrity and uncover any defects in materials or workmanship which may adversely affect the property or decrease its value.
HUD STATEMENT A standardized, itemized list, published by the U.S. Department of Housing and Urban Development (HUD), of all anticipated CLOSING COSTS connected with a particular property purchase.
IMPROVED LAND Any parcel of land which has been changed from its natural state through the creation of roads, buildings or other structures.
IMPROVEMENTS Any item added to vacant land with the intent of increasing its value or usability.
INTEREST RATE A percentage of a loan or mortgage value that is paid to the lender as compensation for loaning funds.
INVESTMENT PROPERTY Any piece of property that is expected to generate a financial return. This may come as the result of periodic rents or through appreciation of the property value over time.
JOINT TENANCY A situation where two or more parties own a piece of property together. Each of the owners has an equal share, and may not dispose of or alter that share without the consent of the other owners.
LEASE (AGREEMENT) A contract between a property owner and a tenant specifying the payment amount, terms and conditions, as well as the length of time the contract will be in force.
LEGAL DESCRIPTION The description of a piece of property, identifying its specific location in terms established by the municipality or other jurisdiction in which the property resides. Often related in specific distances from a known landmark or intersection.
LENDER The person or entity who loans funds to a buyer. In return, the lender will receive periodic payments, including principal and interest amounts.
LIABILITIES A person's outstanding debt obligations.
LIEN Any claim against a piece of property resulting from a debt or other obligation.
LOAN Money borrowed, to be repaid with interest, according to the specific terms and conditions of the loan.
LOAN ORIGINATION How a lender refers to the process of writing new loans.
LOAN-TO-VALUE RATIO (LTV) The comparison of the amount owed on a mortgaged property to its fair market value.
MORTGAGE A financial arrangement wherein an individual borrows money to purchase real property and secures the loan with the property as collateral.
PERSONAL PROPERTY Owned items which are not permanently affixed to the land.
PRE-APPROVAL The process of applying for a mortgage loan and becoming approved for a certain amount at a certain interest rate before a property has been chosen. Pre-approval allows the borrower greater freedom in negotiations with sellers.
PRINCIPAL, INTEREST, TAXES, AND INSURANCE (PITI) The most common constituents of a monthly mortgage payment.
PURCHASE AGREEMENT A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.
REAL ESTATE A piece of land and any improvements or fixtures located on that land.
REAL ESTATE AGENT A licensed professional who facilitates the buying and selling of real estate.
REALTOR® A real estate agent or broker who is a member of the NATIONAL ASSOCIATION of REALTORS®.
RECORDING A local government employee whose role it is to keep records of all real estate transactions within the jurisdiction.
RESIDENTIAL PROPERTY A piece of property whose highest and best use is the maintenance of a residence.
SURVEY A specific map of a piece of property which includes the legal boundaries and any improvements or features of the land. Surveys also depict any rights-of-way, encroachments or easements.
TITLE A specific document which serves as proof of ownership.
TITLE COMPANY An organization which researches and certifies ownership of real estate before it is bought or sold. Title companies also act at the facilitator ensures all parties are paid during the real estate transaction.
TITLE INSURANCE A policy which insures a property owner should a prior claim arise against the property after the purchase has been completed. This also covers a lender should a question of ownership arise.
TITLE SEARCH The process whereby the TITLE COMPANY researches a properties title history and ensures that no outstanding claims exist.
TRANSFER OF OWNERSHIP Any means by which the ownership of a property changes hands.
WALK-THROUGH INSPECTION A process whereby an appraiser examines a property in preparation for estimating its value. Also, the process of inspecting a property for any damage prior to that property being bought or sold.