Dictionary of Terms - I

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Implied Agency: Based on the actions of the parties which imply that they have mutually consented to an agency relationship, an implied agency relationship is formed.
Implied Agreement: A contract under which the agreement of the parties is demonstrated by their acts and conduct.
Implied Contract: See implied agreement.
Implied Warranty Of Habitability: A theory in landlord/tenant law in which the landlord renting residential property implies that the property is habitable and fit for its intended use.
Impounds: A portion of the monthly mortgage payment placed in an account to pay for hazard insurance, property taxes and private mortgage insurance, if applicable.
Improved Land: Real property made suitable for building by the addition of utilities and publicly owned structures, such as a curb, sidewalk, street-lighting system and/or sewer.
Improvement: (1) Any structure usually privately owned, erected on a site to enhance the value of the property-for example building a fence or a driveway. (2) A publicly owned structure added to or benefiting land such as a curb sidewalk street or sewer.
Income Analysis: the process of performing the income approach or a summary of the research and calculations performed during the income approach to value real estate.
Income Approach: An appraisal procedure which converts anticipated monetary benefits to be derived from the ownership of a property into a value estimate.
Income Approach To Value: One of the three approaches to value; it is an estimate of value based upon the monetary returns that a property can be expected to generate.
Income Capitalization Approach: The process of estimating the value of an income-producing property by capitalization of the annual net operating income expected to be produced by the property during its remaining economic life.
Income Property: Property that is not occupied by the owner but is used to generate income.
Income Statement: a summary of the revenues, operating expenses, depreciation, interest and net operating income for a business or parcel of real estate.
Incorporeal Right: A non-possessory right in real estate; for example an easement or a right-of-way.
Increasing Returns Law Of: The situation in which property improvements increase property income or value.
Incurable Depreciation: A depreciated item that would be impossible or too expensive to restore or replace.
Independent Contractor: A person who contracts to do work for another by using his or her own methods and without being under the control of the other person regarding how the work should be done. Unlike an employee, an independent contractor pays all of his or her expenses, personally pays income and social security taxes and receives no employee benefits. Many real estate salespeople are independent contractors.
Index: A ratio of the price or cost of a number of items at one date, compared to the price or composite of prices for equivalent items at another date.
Index Method: An appraisal technique used to estimate reproduction or replacement cost. The appraiser multiplies the original cost of construction by a price index for the geographic area to allow for price changes.
Index: Financial tables used by lenders to calculate interest rates on adjustable mortgages. Commonly used indexes are the Prime Rate, the LIBOR and Treasury bills.
Indexed Rate: The sum of the published index plus a margin. For example if the index were 5% and the margin 2.75%, the "fully indexed rate" would be 7.75%.
Indicator Of Value: An estimate of the worth, expressed in dollars, of a specifically identified item of property (be it a single parcel of land or piece of equipment or an extensive corporate conglomerate) based upon consideration of particular characteristics or attributes of that property. Among the most common indicators of value are those based upon cost, income and comparable sales. Ex: Dollars per square foot or dollars per acre.
Indirect Costs: Costs of erecting a new building not involved with either site preparation or building construction; for example, building permit, land survey, overhead expenses such as insurance and payroll taxes, and builder's profit.
Industrial District Or Park: A controlled development zoned for industrial use and designed to accommodate specific types of industry, providing public utilities, streets, railroad sidings and water and sewage facilities.
Inflation: The gradual reduction of the purchasing power of the dollar usually related directly to the increases in the money supply by the federal government.
Informal Hearing: The first step of the property tax protest process. During the informal hearing, the property owner consultant meets with an appraiser employed by the central appraisal district. The owner/consultant and the appraiser d attempt to negotiate an assessed value. If the informal hearing results in an agreement, the assessed value is final for the year.
Ingress: The way to enter a tract of land. Often used interchangeably with access. (See also access.)
Inheritance Taxes: State imposed taxes on a decedent's real and personal property.
Initial Interest Rate: The original interest rate on an adjustable rate mortgage. This rate may be subject to various adjustment at points throughout the mortgage.
Initial Rate Cap: A specific limit defined by some adjustable rate loans (ARMs) for the maximum amount the interest rate may increase at the expiration of the initial interest rate.
Initial Rate Duration: Most adjustable rate loans (ARMs) offer an initial interest rate below the current market rate. This initial or "teaser" rate expires after a period called the initial rate duration, which may last months or years.
Inquiry Notice: Notice the law presumes a reasonable person would obtain by inquiring into a property.
Inspection Fee: The fee paid to a licensed property inspector in order to determine the present physical condition of the property.
Inspection Report: A licensed property inspectors; written report of the property's condition.
Installment Contract: A contract for the sale of real estate by which the purchase price is paid in installments over an extended period of time by the purchaser, who is in possession, with the title retained by the seller until a certain number of payments are made. The purchaser's payments may be forfeited upon default.
Installment Sale: A transaction in which the sales price is paid in two or more installments over two or more years. Sometimes a taxpayer can postpone reporting such income until future years by paying tax each year only on the proceeds received that year.
Insurable Value: The highest reasonable value that can be placed on property for insurance purposes.
Insurance Binder: A temporary insurance arrangement usually put in force until a permanent policy can be obtained.
Insured Mortgage: A mortgage that is insured (guaranteed) by the Federal Housing Administration (FHA) or by private mortgage insurance (PMI).
Intangible Personal Property: Property that lacks mass and cannot be seen, felt, weighed, measured or otherwise perceived by the senses. Its existence may be evidenced by a document, and it can be thought of as paper evidence or wealth such as cash, stocks, bonds, mortgages, etc.
Intended Use: The use or uses of an appraiser's reported appraisal, consulting, or review assignment opinions and conclusions, as identified by the appraiser based upon communication with the client at the time of the assignment. (USPAP)
Intended User: The client and any other party as identified, by name or type, as users of the appraisal, consulting, or review report, by the appraiser based upon communication with the client at the time of the assignment.
Interest Accrual Rate: The rate at which interest accrues on a mortgage.
Interest Only Loan: The borrower pays only the interest that accrues on the loan balance each month. Because each payment goes toward interest, the outstanding balance of the loan does not decline with each payment.
Interest Paid Over Life Of Loan: The total amount paid to the lender for the use of money during the time the money is borrowed.
Interest Rate: In this context, Interest Rate has multiple meanings. 1. The portion of the capitalization rate which provides for return on investment. 2. A stipulated rate paid for borrowed money.
Interest Rate Buy-down Plans: For buyers with limited cash reserves some sellers are willing to advance funds from the sale of the home to buy down the interest rate and reduce the buyer's monthly obligation.
Interest Rate Cap: The maximum interest rate charge allowed on the monthly payment of an adjustable rate mortgage during an adjustment period.
Interest Rate Ceiling: The highest interest rate a lender can charge for an adjustable rate mortgage.
Interest Rate Floor: For an adjustable-rate mortgage (ARM), the minimum possible interest rate, as specified in the mortgage note.
Interest Rate: Return on an investment; an interest rate is composed of four component rates-safe rate, risk rate, nonliquidity rate and management rate. 1) management rate: Compensation to the owner for the work involved in managing an investment and reinvesting the funds received from the property. 2) nonliquidity rate: A penalty charged for the time needed to convert real estate into cash. 3) risk rate: An addition to the safe rate to compensate for the hazards that accompany investments in real estate. 4) safe rate: The interest rate paid by investments of maximum security, highest liquidity and minimum risk.
Interest: A percentage of the principal amount of a loan charged by a lender for its use, usually expressed as an annual rate.
Interim Financing: A short-term loan usually made during the construction phase of a building project (in this case often referred to as a construction loan).
Interim Use: A temporary and lesser use of an income-producing property until a higher and better use becomes feasible.
Interim Use: A temporary property use awaiting transition to its highest and best use.
Intermediate Theory: Adopted by a number of states a theory based on the principles of title theory but requires the mortgagee foreclose to obtain legal title.
Interstate Land Sales Full Disclosure Act: A federal law that regulates the sale of certain real estate in interstate commerce.
Intestate: The condition of a property owner who dies without leaving a valid will. Title to the property will pass to the decedent's heirs as provided in the state law of descent.
Intimidation: As defined in the fair housing laws, it is the illegal act of coercing, intimidating, threatening or interfering with a person in exercising or enjoying any right granted or protected by federal, state or local fair housing laws.
Intrinsic Value: An appraisal term referring to the value created by a person's personal preferences for a particular type of property.
Inventory: 7
Inverse Condemnation: An action brought by a property owner seeking just compensation for land taken for public use when the taker of the property does not intend to bring eminent domain proceedings. Property is condemned because its use and value have been diminished due to an adjacent property's public use.
Investment Property: Real estate that generates income, such as an apartment building or a rental home.
Investment Value: The worth of investment property to a specific investor.
Investment: Money directed toward the purchase improvement and development of an asset in expectation of income or profits.
Involuntary Alienation: See alienation.
Involuntary Lien: A lien placed on property without the consent of the property owner.
Inwood Annuity Table: A table that supplies a factor to be multiplied by the desired yearly income (based on the interest rate and length of time of the investment) to find the present worth of the investment.

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