REAL ESTATE TERMS

  (Some real estate terms you may hear as you´re buying your new home)

AMORTIZATION
The schedule of loan payments that establishes the amount of payment to be applied to the principal and amount to be applied to interest, usually on a monthly basis, for the full term of the loan.

APPRAISAL
Professional service provided by a registered, licensed or certified appraiser or real estate licensee to produce an estimate of value.

BUYER´S MARKET
The supply of available properties exceeds the demand.

CAPITAL GAIN
The profit from the sale of a capital asset, including real property.

COMPARATIVE MARKET ANALYSIS
An informal estimate of market value performed by a real estate
licensee for the seller to assist in arriving at an appropriate listing price, or if working with the buyer, an informal estimate of market value to assist the buyer in arriving at an appropriate offering price.

CONTINGENCIES
These are conditions or "safety valves" written into real estate offers and contracts to prevent a buyer from being forced to buy a house that is unsatisfactory, either structurally or financially.Examples of contingencies are given under our section in this manual.

DEED
The document that, when recorded with your local government, determines ownership of a property.Transferred from seller to buyer at closing.

DEPOSIT
Earnest money or some other valuable consideration given as evidence of good faith to accompany an offer to purchase or rent.

DOCUMENTARY STAMP TAX ON DEEDS
Tax required on all deeds or other documents used as conveyances.The charge is based on the total purchase price and is computed at 70 cents for each $100 of the full purchase price or any fraction thereof.

DOCUMENTARY STAMP TAX ON MORTGAGE
Tax required on all promissory notes.The cost is based on the face value of the note and is computed at 35 cents per $100 or any fraction thereof for any new or assumed mortgage.

DOWNSTAIRS ENCLOSURES
Finished enclosed space below an elevated home.Since 1975, the only allowable below flood level construction in Monroe County was limited to parking of vehicles or limited storage or access.The law is changing but purchasing a home with a downstairs enclosure built after 1975 could require demolition or increased insurance premiums.

EASEMENT
A right, privilege or interest in real property that one individual has in lands belonging to another; a legal right to trespass; right-of-way authorizing access to or over land.

ESCROW
Funds held in reserve both prior to closing (for example, the earnest moneydeposit) by a third party and after closing by the mortgage company to pay future taxes and homeowners insurance.In some areas, "escrow" also refers to the closing process.

ESCROW ACCOUNT
An account in a bank, title company, credit union, savings association or trust company used solely for safekeeping customer funds and not for deposit of personal funds; impound account.

FLOOD & WIND INSURANCE
The City of Key West and Monroe County participate in the National Flood Insurance Program. Please be informed that if you purchase a home in the Keys using a lender, you will likely be required to carry flood and wind insurance.These insurances can be purchased through local agencies but will be covered by the same FEMA backed companies.

FSBO (FOR SALE BY OWNER)
Real estate that is sold without the assistance of an agent.FSBO can refer to both the individual selling the property or to the property itself.

HARC
The Historical Architectural Review Commission helps protect the unique character of Key West´s Historic District. Application for building permits in the Historic District must first be approved by this commission before going to the building department.

HOME OWNER´S ASSOCIATION (HOA)
An owner´s group, whether in a condominium, townhouse or single family subdivision that establishes general guidelines for the operation of the community, as well as its standards.

HOMESTEAD
Term used to describe three separate but related situations: (1) a tax exemption, (2) a tract of land limited in size and (3) a statutory condition designed to protect the interests of a spouse and lineal descendants.

HOMESTEAD EXEMPTION
To qualify for this exemption, each person must have legal title to the property, reside and make the property their permanent residence as of January 1^st of the year they are applying.The benefits are taxable value cannot increase more than 3% of the prior years assessment or Consumer Price Index, whichever is less.

LEASE
An estate for years, an agreement that does not convey ownership but does convey possession and use for a period of time and for compensation.

LISTING
A property for sale by a real estate brokerage and agent.

MLS (MULTIPLE LISTING SERVICE)
A listing of all the properties for sale by real estate brokerages in a given geographical area.

MOBILE/MANUFACTURED HOMES
These homes were formerly referred to as trailers. Built in a factory conforming to a Federal code called the HUD Code rather than codes at their destinations. They are built on a non-removable steel chassis and transported to the site on their own wheels. These homes are generally harder to finance and insure than Modular Homes.

MODULAR HOMES
Modular homes are built in modules at a factory and are built to conform to all state, local, and regional building codes at their destinations. They are transported to the site on truck beds and joined by local contractors. A well built modular home should have the same longevity as site-built homes but cost substantially less.

PMI (PRIVATE MORTGAGE INSURANCE)
Required on most conventional loans with less than 20% down payment.The payments for PMI are included in your mortgage payment and protect the lender should you default on the loan. On FHA loans, you will pay an MIP (Mortgage Insurance Premium) which accomplishes the same purpose.

PROPERTY TAX
An annual or semi-annual tax paid to one or more governmental jurisdictions based on the amount of the property assessment.Generally paid as part of the mortgage payment.

QUIT CLAIM DEED
A type of deed that will effectively convey any present interest, claim or title to real property that the seller (grantor) may own.

REAL ESTATE
Land, including the air above and the earth below, plus any permanent improvements affecting the utility of the land; real property; property that is not personal property.

REAL ESTATE TAX
There is an automatic re-appraisal on the sale of a property.The assessment will be at market or just value.If the property purchased was on a Homestead Exemption for a number of years, the increase in taxes could be substantial.

ROGO
Monroe County adopted the Rate Of Growth Ordinance to control the growth of the Florida Keys. It is derived from a federal law that prohibits further expansion of an area until the infrastructure is in place to handle that expansion. Under the current system, points are awarded for certain design features in building plans, location of the building lot, donating non-buildable lots, and time in the system waiting or a building permit. Don´t get too bogged down with the details since this system is about to be changed to the Tier System.

TIER SYSTEM
A point system in ROGO that awards most of its points towards a building permit mainly on the location of land on the Monroe County Tier map. There are three Tiers and different points are awarded for each. Tier I is considered unbuildable and gets zero points towards a permit. Tier II is considered buildable, in an area of less that 50% developed, and gets 20 points towards a permit. Tier III is buildable,in an area more than 50% developed, and gets 30 points towards a permit. The details have not been finalized as of this writing.

TITLE INSURANCE
A policy of insurance that protects the holder from any loss resulting from defects in the title.

TRANSIENT LICENSE
An occupational license issued by the City of Key West that allows the holder to rent a property for less than 30 days. This license is specific to a certain property and cannot be moved to other locations unless that location is zoned for such use. It must be renewed yearly at a cost of $23.00. New ones are no longer available but there is a market to purchase existing ones (presently valued at $50-60K) providing the new location meets certain criteria.

VARIANCE
An exception to zoning regulations or ordinances granted to relieve a hardship.

WARRANTY
Covers either most of the house in a new home, or selected items (for example, the heating and air conditioning system or water heater) in a resale home.Warranties vary widely.They are optional in resale homes and can be paid for by the buyer or seller.

ZONING
Laws that govern how a zoned area can be used.For example, an area may be zoned for single-family residential, condominiums, commercial or retail, or a mix of two or more uses.