Closing- A closing is the final step in the real estate sales process. It is the meeting at which all of the money for the purchase is paid by the buyer and the mortgage lender and all of the documents to be recorded in the public records are executed. It is sometimes called “closing of escrow.”
Closing Agent- The closing agent is the person or entity that conducts the closing. In Florida, the closing agent is usually an attorney or a title insurance agency.
Closing Disclosure (“CD”)- The form promulgated by the Consumer Finance Protection Bureau (CFPB) to disclose closing costs in a real estate transaction to consumers. CFPB is a federal governmental agency and formulated the CD for use nationwide. Because of the desire of the CFPB for uniformity, the cost of title insurance is not accurately disclosed on the CD. Your closing agent will explain the discrepancies and may give you another form (DFS-H1-2146) that accurately discloses the cost of title insurance.
Declaration of Covenants and Restrictions- Subdivision restrictions are contained in the declaration of covenants and restrictions for that subdivision that is recorded in the public records. This declaration contains restrictions on the way that property in the subdivision may be used. It also may set up a homeowners’ association and provide for assessments that every homeowner in the subdivision must pay.
Deed- The deed is the legal instrument that transfers title to real estate from the buyer to the seller. Deeds are recorded in the public records of the county in which the real estate is located.
Deposit- Customarily, a buyer will post a deposit, also called “earnest money,” with an “escrow agent” at the time the buyer makes an offer to buy a house. While there is no legal requirement that a buyer post a deposit for a contract to be valid, posting a deposit gives the seller an indication that the buyer is making a serious offer.
Documentary Stamps- A tax that is due on certain documents, such as deeds and mortgages, that are executed in Florida. This tax is usually collected at a real estate closing, and the charge for it is one of the closing costs.
Easement- An easement is a right to use a piece of property owned by someone else. For example, an easement may give the electric company the right to run power lines from the street to your house or give a neighbor the right to walk across your property to get to the beach. Easements on the property you are planning to buy may or may not interfere with the way in which you plan to use your property. Before buying,
you should review any easements affecting your property to make sure that they are acceptable to you.
Fee Simple- Fee simple is the most complete ownership of real estate possible. The owner of the fee simple has an unconditional right to dispose of or mortgage the property, and the property passes to the heirs of the fee simple owner on the death of the owner.
Fixed Rate Mortgage- A fixed rate mortgage is one in which the rate of interest stays the same for the entire term of the mortgage.
Homestead Exemption- Homeowners receive a tax exemption on real estate taxes on the house in which that they live. To qualify for the exemption, after you buy the house, you must be living in the house on January 1, and must make application for the exemption with the county tax collector by March. There is currently legislation pending before the Florida legislature to make changes to the homestead exemption. You can get details on the current state of the homestead tax exemption from your real estate agent or lawyer.
Intangible Tax- Intangible tax is a Florida tax that is charged on mortgage notes, among other things. This tax is collected at real estate closings.
Proration- A proration is a division of certain expenses (such as taxes or homeowners’ association dues) between the buyer and the seller based on the number of days that each owns the property.
Quit Claim Deed- A quit claim deed is a deed which transfers all of the title that the grantor has in a piece of property but without any warranties. Quit claim deeds are frequently used to correct title problems.
Recording Fees- A recording fee is a fee paid for recording a document in the public records. In Florida, the charge is determined by the number of pages recorded.
Survey- A survey is a scale drawing of a piece of real estate. It will show the footprint of the house, driveways and sidewalks, easements, fences, encroachments, set-back distances, and other things. You should review the survey carefully before you close on your house to make sure that it does not reveal any problems.
Three Day Rule- The CFPB now requires that mortgage lenders deliver a Closing Disclosure to borrowers at least three days prior to the closing.
Warranty Deed- A warranty deed is a deed used to transfer property in which the grantor warrants, among other things, that the grantor owns the property, has the right to convey it, and will defend the buyer’s title against anyone who makes a claim against the property. A warranty deed is the type of deed used most often in real estate transactions in Florida. A form for a warranty deed has been adopted by the Florida legislature and is set out in the Florida Statutes (this form is called a “statutory warranty deed”).
