ARV (After Repair Value)
The estimated market value of a property after all necessary repairs and renovations are completed. Serious investors use ARV to calculate maximum allowable offer, expected profit, and deal viability before bidding.
← ResourcesGlossary of
Glossary of
Foreclosure Terms
The terminology that defines Florida foreclosure investing. Understanding these terms is the difference between reading a case file and understanding a deal.
Lis Pendens
Latin for 'suit pending.' A formal notice recorded in public records announcing that a lawsuit affecting the title to a property has been filed. In Florida, the lis pendens is the first public signal of an impending foreclosure and marks the start of the foreclosure timeline.
Final Judgment of Foreclosure
The court order that authorizes the sale of the property to satisfy the mortgage debt. It specifies the amount owed, the sale date, and the conditions of sale. In Florida, the sale typically occurs 20 to 35 days after final judgment.
Judgment Amount
The total the lender is owed as ruled by the court, including principal, interest, attorney fees, and costs. This often sets the opening bid at auction and is a key data point for evaluating spread.
Opening Bid
The starting amount at a foreclosure auction, set by the plaintiff (usually the lender). It's generally equal to the judgment amount but can be reduced if the lender decides to take a lower opening. Properties selling at or near opening bid may indicate lower investor interest — or an opportunity.
Certificate of Sale
Issued by the clerk of court to the winning bidder after the auction. It establishes the buyer's equitable interest but does not yet convey legal title. A 10-day objection period follows during which the sale can be challenged.
Certificate of Title
The document that conveys legal title to the winning bidder after the 10-day objection period has passed without successful challenge. This is when ownership formally transfers.
Right of Redemption
In Florida, the borrower has the right to redeem the property (pay off the full amount owed) up until the clerk files the certificate of sale. After that point, the right terminates. This is shorter than many states and affects timing decisions.
REO (Real Estate Owned)
Property that was not sold at auction and reverts to the lender's balance sheet. REO properties are typically listed through real estate agents and sold at retail prices, though institutional discounts can apply for portfolio purchases.
Tax Deed Sale
A separate legal process from mortgage foreclosure. When property taxes go unpaid for two or more years, the county can auction the property to recover taxes owed. Tax deed sales typically wipe out junior liens but come with specific title and occupancy considerations.
Short Sale
A pre-foreclosure transaction where the lender accepts less than the full mortgage balance to release the lien. Requires lender approval and is typically longer and less certain than auction acquisition.
Deed in Lieu of Foreclosure
The borrower voluntarily transfers title to the lender to avoid foreclosure. Rare in investor-facing deal flow but occasionally surfaces as a pre-auction negotiation.
Senior Lien
A lien with priority over others, typically the first mortgage. Foreclosure by a senior lienholder generally extinguishes junior liens (with exceptions — see IRS and government liens).
Junior Lien
A subordinate lien recorded after a senior lien. Second mortgages, HELOCs, HOA liens, and most judgment liens typically fall into this category. Junior liens are usually wiped out by senior foreclosure, but always verify.
IRS Lien
A federal tax lien that can survive foreclosure under certain conditions. The IRS has a 120-day right of redemption after the foreclosure sale. This is a critical item in title review.
HOA Lien
A lien recorded by a homeowners association for unpaid dues, assessments, or fines. Florida has specific statutes governing HOA lien priority — in some cases HOA liens can survive foreclosure or require negotiation.
Municipal Liens
Liens from local governments for unpaid utilities, code violations, demolition costs, or special assessments. These often survive foreclosure and transfer with the property. Always check with the relevant municipality before closing.
Surplus Funds
When a foreclosure sale generates more than the amount owed on the judgment, the excess is called surplus funds. Junior lienholders and ultimately the former owner have claims to these funds through a separate legal process.
Deficiency Judgment
If a foreclosure sale generates less than the amount owed, the lender can seek a deficiency judgment against the borrower for the difference. Florida allows these within certain time limits and conditions.
Upset Bid
A higher bid submitted after the initial auction ends. Florida generally does not allow upset bids in judicial foreclosure — the winning bid at auction is final, subject only to the 10-day objection period.
Plaintiff
The party bringing the foreclosure action — typically the lender, mortgage servicer, or HOA. Often a corporate entity with a name that may not match the original lender due to loan sales and servicing transfers.
Defendant / Mortgagor
The borrower, the party against whom the foreclosure action is filed. May also include spouses, subordinate lienholders, and other parties with an interest in the property.
Quiet Title Action
A legal proceeding to clear clouds on title — unclear ownership, old liens, conflicting claims. Sometimes needed on foreclosure acquisitions where title insurance underwriters require cleanup before insuring future transfers.
Title Insurance
Insurance protecting against defects in title that existed before the policy date. Critical on foreclosure acquisitions since the auction process can surface latent issues.
Judicial Foreclosure
The court-supervised foreclosure process used in Florida. Requires a lawsuit, court order, and public auction. More transparent and longer than non-judicial foreclosure states, creating a window for investor intelligence.
Summary Judgment
A court ruling issued without a full trial when there is no disputed issue of material fact. Most uncontested Florida foreclosures resolve at summary judgment — this is where the judgment amount and sale date are set.
Service of Process
The formal delivery of the foreclosure complaint to the defendant(s). Failures here can delay or void a foreclosure and occasionally surface as legal defects that affect subsequent sales.
Comparable Sales (Comps)
Recently sold properties similar in size, condition, age, and location used to estimate a subject property's value. Quality comps are the foundation of accurate ARV estimation.
Spread
The difference between the amount required to acquire a property and its projected value after repairs — the investor's gross opportunity before transaction costs, repairs, and carrying costs.
Cash-to-Close
In Florida foreclosure auctions, winning bidders typically must pay a 5% deposit immediately and the balance within 24 hours — in certified funds. Financing is not an option for courthouse auction purchases in most counties.
Vocabulary is the starting line.
Deal flow is the race.
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