A quick look at some common real estate jargon.
Every industry has it’s own jargon, or, language that’s fairly specific to a particular business. Real estate is no different. But with so much going on in a typical real estate transaction, and tight timelines to get it all done, it can be difficult to stop and get a handle on exactly what some words mean.
Here are a few words you might hear during a typical real estate sale, and what they mean:
If you’re buying or selling a home in a community with a homeowner’s association (HOA)–sometimes known as a deed restricted community–you’re likely to come across the term “estoppel”, or “estoppel fee”, on your closing documents. The estoppel is basically just a document showing whether or not the current owner has paid all of their required HOA fees to date.
Increasingly common here in northeast Florida, a Community Development District (CDD) is a special purpose government framework that helps finance and manage communities within the district. To do so, the CDD assesses fees, payable with the homeowner’s tax bill, that go toward paying off bonds, as well as helping with the care and maintenance of the community grounds and amenities. There are typically two parts to the CDD fee: the A portion, which refers to the bond that can be paid off over time; and the Operations & Management portion (O&M), which goes toward the upkeep of the community. At a real estate closing, CDD fees will be pro-rated based on how much the existing homeowner has already paid toward the CDD, with the remainder being assigned to the new homeowner.
Increasingly, home buyers may ask that the title company perform a lien search. This search goes beyond what the title company typically does to ensure there are no problems with the title to the property. The lein search is designed to find any unrecorded liens, or, most often, liens that have been levied by a city or municipality for unpaid fees. These can be for things like trash collection, unpaid utility bills, open permits, code enforcement violations, etc. Again, it’s a search to ensure that no costs that would be due and payable by the seller are inadvertently transferred to the buyer.
Have questions about other real estate terms or processes? Let us know in the comments below, and we’ll try to answer your questions.