Real Estate 201 – Cram Course (Florida Version)

Welcome to your cram course for selling real estate! We’re happy you chose our team to help guide you through this process. If you're not buying and selling houses every day, there are terms that will sound unfamiliar. Keep this guide handy to refer back to definitions throughout your home sale. We’ll get more in depth in later sections—this is just to get you grounded in the basics.

Important Definitions

  • Anti-Flip Rule: FHA won’t allow a home to be sold to an FHA buyer within 90 days of the seller acquiring it. A contract cannot be written until Day 91 from the last deed recording.

  • Appraisal: A professional value estimate. In Florida, appraisers must comply with federal lending guidelines. Some loan types require repairs for health and safety items before closing. You cannot use your own private appraisal to replace the loan-required one.

  • Comparative Market Analysis (CMA): A report your real estate agent provides using comparable recent sales to help set a pricing strategy. This is not the same as an appraisal.

  • Capital Gains Tax: If you haven’t lived in the home 2 of the past 5 years or it’s an investment property, capital gains taxes may apply. This is based on the net profit, not the sale price.

  • Seller Disclosure: Florida is a full disclosure state. Sellers are legally required to disclose known material facts that could affect a home’s value. This includes roof leaks, past flooding, sinkhole activity, mold issues, and more—even if the buyer waives an inspection.

  • Flood Zone: Many areas in Florida fall within FEMA-designated flood zones. If your property is in a high-risk area (Zone A or AE), your buyer’s lender may require flood insurance. This can affect their financing and monthly payment, so it’s good to know up front.

  • Sinkhole Disclosure: Florida law requires sellers to disclose prior sinkhole claims—even if repairs have been completed. Your insurance history may show this, so it’s better to be upfront with your agent.

  • Closing Costs: Includes title fees, commissions, prorated taxes, recording fees, and potentially doc stamps on the deed (which sellers typically pay in Florida). We’ll break this down more in later sections.

  • Homestead Exemption: Florida offers a property tax exemption on your primary residence. Sellers can’t transfer their homestead to the buyer, but it may affect prorated taxes and escrow refunds. Buyers must file after Jan 1 following purchase to claim the exemption.

  • HOAs & CDDs: If your property is in a Homeowners Association or Community Development District, Florida law requires advance disclosure and the delivery of governing documents. Buyers have a three-day right of rescission after receipt of HOA disclosures.

  • Escrow: Earnest money in Florida is typically held by the title company, not the listing broker. Escrow disputes are governed by strict timelines, so it’s critical to follow contract procedures.

  • WDO Inspection: A “Wood-Destroying Organism” inspection is often required by lenders in Florida, especially VA loans. This includes termites, wood rot, and other organisms that could affect structural integrity.

  • 4-Point Inspection: Common in Florida for homes over 20 years old. Insurance companies may require this to issue or maintain a policy. It covers HVAC, plumbing, electrical, and roofing. Buyers may request this during the inspection period, so be prepared to address any issues.

  • Wind Mitigation Report: While not required by law, this report can dramatically reduce insurance premiums. It evaluates roof shape, strapping, age, and impact-rated openings (windows/doors).

  • Owner's Title Insurance: In most of Florida, the seller provides title insurance to the buyer (and chooses the title company), but this can vary by county. In the Panhandle/North Florida, this is often still the case unless negotiated otherwise.

  • Doc Stamps on Deed: Florida charges a documentary stamp tax (usually paid by the seller) on the deed at closing—$0.70 per $100 of value in most counties. This is a major line item in your closing costs.

  • Tax Proration: Florida property taxes are paid in arrears and become due Nov. 1 for the calendar year. At closing, you'll credit the buyer for your portion of the year up to the closing date.

You're now ready to move on to Real Estate 202. Continue on if you're ready to keep learning, or keep an eye out for our next email!