Glossary
Miami real estate terms, in plain language.
The words you will meet while buying or selling in Miami, explained simply and with an international-buyer slant. General information, not legal or tax advice.
- FIRPTA
- A US tax rule that withholds part of the sale price when a foreign owner sells US property, so any tax owed is collected. It affects sellers, not buyers, and is often partly refunded when you file.
- ITIN
- An individual taxpayer identification number, a US tax ID for people without a Social Security number. Foreign buyers who finance or file usually need one, and it takes weeks to obtain.
- Foreign-national loan
- A mortgage for a buyer without US residency or credit history, based on foreign income and bank statements, usually with a larger down payment and a slightly higher rate.
- DSCR loan
- An investor loan that qualifies on the property's rental income rather than your personal income. DSCR is the ratio of rent to the loan's debt service.
- Closing costs
- The taxes and fees paid to complete a purchase, beyond the price. In Miami they include documentary stamp taxes, title insurance, recording fees, and a survey.
- Documentary stamp tax
- A Florida tax on the deed (and on the mortgage note if you finance), charged per hundred dollars of value. Cash buyers avoid the note portion.
- Intangible tax
- A Florida tax on a new mortgage, charged per thousand dollars of the loan. It applies only when you finance, so cash purchases skip it.
- Title insurance
- A policy that protects the owner (and the lender) against defects in the property's title, such as unknown liens. It is a one-time cost at closing.
- Escrow
- Money or documents held by a neutral third party until the deal's conditions are met, which protects both buyer and seller through closing.
- HOA
- A homeowners or condo association that maintains shared areas and sets rules, funded by monthly fees. Its rules and finances are worth reviewing before you buy.
- Estoppel
- An official statement from an HOA listing what a seller owes and the association's rules and fees, ordered during a condo or HOA purchase.
- Homestead exemption
- A Florida property-tax break for a primary residence. Non-resident and second-home buyers generally do not qualify.
- Save Our Homes cap
- A Florida limit on how much the assessed value of a homesteaded property can rise each year. Non-homestead properties have a higher, separate cap.
- Cap rate
- A quick measure of an investment property's return: net operating income divided by price. Higher can mean more income relative to cost.
- Pre-construction
- Buying a unit before or during construction, often with staged deposits. Common in Miami condos, and the contract terms matter as much as the price.
- Power of attorney
- A document that lets a trusted person sign on your behalf, which allows a foreign buyer to close a purchase without traveling to the US.
- Remote online notarization
- Notarizing documents by video with a commissioned online notary, allowed in Florida, so many closing documents can be signed from another country.
- MLS
- The multiple listing service, the shared database of properties for sale that agents use. Public sites show a subset through an IDX feed.
- Contingency
- A condition in a contract that must be met for the deal to proceed, such as financing, inspection, or appraisal. It protects the buyer if the condition fails.
- Appraisal
- A lender-ordered estimate of a property's value, used to confirm the price supports the loan. Cash buyers can choose whether to order one.
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