Real Estate Glossary
I-9 form
The I-9 form, officially known as the Employment Eligibility Verification form, is used in the United States to verify the identity and legal authorization to work of all paid employees. Employers are required to complete this form for each individual they hire, which includes reviewing the employee's documentation that proves their identity and employment authorization. The form must be retained by the employer either for three years after the date of hire or for one year after employment ends, whichever is later.
iBuyer
A generic name for an online company that will make an offer on a seller's home using AVM technology (automatic valuation methods) to offer the seller convenience and speed in closing (in exchange for a service fee and/or lower than market sales price)
icon
a small graphic that when clicked, executes a command.
ideal
A standard of perfection, beauty, or excellence.
identification period
The period during which the exchanger must identify replacement property in a 1031 tax deferred exchange. The identification period starts on the day the exchanger transfers the first relinquished property and ends at midnight on the 45th day thereafter.
identity theft
Identity theft is the illegal practice of setting up and using bank accounts and credit facilities fraudulently in another person's name without his or her knowledge.
identity theft report
The meaning given the term by the Federal Trade Commission is at minimum: a) a report that alleges an identity theft; b) a copy of an official, valid report filed by a consumer with an appropriate Federal, State, or local law enforcement agency; and/or c) the filing of which subjects the person filing the report to criminal penalties relating to the filing of false information if, in fact, the information in the report is false.
illusory contract
An apparent contract that is not a contract because the parties have not agreed to be bound.
immediate family member
An immediate family member is a spouse, child, sibling, parent, grandparent, or grandchild, and includes a stepparent, a stepchild, a stepsibling, and an adoptive relationship.
immobility
The fact that property cannot be relocated to satisfy demand where supply is low, nor can buyers always relocate to areas with greater supply.
impact fees
A municipal assessment against new residential, industrial or commercial development projects to compensate for the cost of the public services generated by the new construction.
imperfect markets
An imperfect martket arises when a small group of buyers or sellers is able to directly influence the price and output of a good or service. (See monopoly, oligopoly, monopsony, oligopsony, perfect market)
Implicit bias
Implicit bias is our unconscious brain's ability to recognize patterns and use them to assign people and things to categories, such as threats and non-threats, or safe or non-safe. Every human being has honed the skills of implicit bias because it is a necessary function for survival.
implied agency
An agency agreement created by the actions of the parties, and not a stated (written or verbal) agreement. (See express agency)
implied agreement/contract
A contract under which the agreement of the parties is demonstrated by their acts and conduct.
implied authority
The authority of an agent to perform acts which are reasonably necessary to accomplish the purpose of the agency.
implied covenant
A covenant implied rather than expressly written into a lease. On the part of the lessor this could include the asset being fit for the purpose for which it is let and allowing for quiet enjoyment. On the part of the lessee it could include keeping the premises clean.
implied easement
When the owner of two or more adjacent properties sells a part thereof, he or she grants by implication all those apparent and visible easements which are necessary for the reasonable use of the property granted. (See easement)
implied guarantee
The assumption, prevalent in the financial markets, that the federal government will cover Government Sponsored Enterprise (GSE) debt obligations.
implied warranty
A theory in landlord/tenant law in which the landlord renting residential property implies quiet enjoyment of the property or that the property is habitable. (See habitability, quiet enjoyment)
impossibility of performance
An event, such as the destruction of property, that makes it impossible to perform a contract on its terms.
impound account
A trust account established to set aside funds for future needs relating to a parcel of real property. Many mortgage lenders require an impound account to cover future payments for taxes, assessments, private mortgage insurance and insurance in order to protect their security from defaults and tax liens. In the case of FHA loans, many lenders require a tax reserve of six months and an insurance reserve of one year. When the property is sold and the buyer assumes the seller's mortgage, the lender does not usually return the escrow account balance to the owner. The sum remains with the lender, and it is the responsibility of the buyer and seller to prorate the balance between them. Impound accounts are required for FHA loans, and although VA regulations do not require an impound account for taxes and insurance premiums on GI loans, many lenders customarily require that such accounts be established and maintained. Under RESPA, the amount of reserves in the impound account is limited to one-sixth of the estimated amount of taxes and insurance that will become due in the 12-month period beginning at settlement. Sometimes, part of the purchase price due the seller may be impounded or put aside by escrow to meet the post-closing expense of clearing title or repairing the structure. The issue of use of interest earned on reserve funds is frequently debated. Typically, lenders do not pay interest to borrowers on money held as reserves.
impound funds
Impound funds are collected by the lender as part of the borrower's monthly mortgage payments. These funds are set aside in an impound account, also known as an escrow account, and used to pay property taxes, homeowners insurance, and sometimes other expenses such as homeowners association fees. The lender manages the impound account and ensures that these obligations are met on behalf of the borrower.
impracticability of performance
Excuse for failure to perform contract obligation because of changed circumstances that make a purchase uneconomic; also called impracticability of performance. Also called commercial frustration.
improved lot (AZ subdivision law)
improvement
1) Any structure, usually privately owned, that humans either have erected or built on the property or done to the property, for example, building a fence or a driveway or digging a trench. The key is that humans have done it or placed it. 2) A publicly owned structure added to or benefiting land, such as a curb, sidewalk, street or sewer.
imputed notice
The legal concept that a principal is deemed to have knowledge of information if notice of the information was conveyed to the principal's agent.
in-class
Traditional classroom setting
in-house sale
A sale in which the listing broker is the only broker in the transaction; there is no outside broker involved as in a cooperative sale. Either the listing salesperson finds the buyer, or another salesperson working for the listing broker finds the buyer. If the buyer is a client of the broker, the issue of dual agency arises.
incentive zoning
Zoning that offers incentives to developers, such as retail shops on the first floor of multistory office buildings if a plaza for public use is included. (See zoning)
inclusionary zoning
Inclusionary zoning is a land-use concept where local ordinances require builders to include a certain amount of housing for low and moderate income households.
income
Income is the money an individual, business, or organization receives in exchange for providing goods, services, or through investments. In the context of budgeting and financial management, income refers to the total inflow of funds during a specific period. For a business or association, this can include membership dues, service fees, rental income, investment returns, or grants. Income is a crucial component of a budget, as it determines the available funds for covering expenses, building reserves, and planning for future projects or obligations.
income and expense report
A financial report generated by a property manager that details the income and expenses from a property and the amount remitted to the owner.
income approach
The process of estimating the value of an income-producing property through capitalization of the annual net income expected to be produced by the property during its remaining useful life. (See appraisal)
income capitalization approach
Appraisal method in which the actual or likely net operating income of property is divided by its expected rate of return (capitalization rate) to arrive at an estimate of market value. (See capitalization rate)
income ratio
The relationship between a person's total income and the amount needed to make one month's mortgage payment.
income statement
An income statement is a financial statement that measures a company's financial performance over a specific accounting period. Financial performance is assessed by giving a summary of revenue and expenses through both operating and non-operating activities. It also shows the net profit or loss over a specific accounting period, typically a fiscal quarter or year. Also known as the "profit and loss statement."
income tax
A tax levied on net personal or business income. (See progressive tax)
incorporeal right
A nonpossessory right in real estate; for example, an easement or a right of-way.
increased interest rate
An increased interest rate is an increase in the interest rate after default. This does not apply to interest rate changes in a variable-rate loan otherwise consistent with the home loan documents, provided that the change in the interest rate is not triggered by the event of default or the acceleration of indebtedness.
increasing and diminishing returns
The addition of more improvements to land and structures which increases value only to the assets' maximum value. Beyond that point, additional improvements no longer affect a property's value. As long as money spent on improvements produces an increase in income or value, the law of increasing returns applies. At the point where additional improvements do not increase income or value, the law of diminishing returns applies.
inculpate
The act of becoming culpable or having guilt. Any time evidence or testimony tends to show culpability of a person, it is inculpatory evidence.
incurable depreciation
A depreciated item that would be impossible or too expensive to restore or replace. (See also external obsolescence, functional obsolescence and physical deterioration)
indemnification
Indemnification is an agreement between two parties not to hold one of them liable for future legal action or fines.
indemnify
To guarantee against any loss which another might suffer. For example, a party might agree to pay any claims which may arise from the contract, holding the other harmless.
independent
A brokerage firm operating on-its-own without an affiliation with a regional or national franchise. (See franchise)
independent contractor
One who is retained to perform a certain act, but who is subject to the control and direction of another only as to the end result and not as to how he or she performs the act. The critical feature, and what distinguishes an independent contractor from an employee or agent, is the degree of control the employer has over such a person's activities.
Because many licensing laws make brokers responsible for the activities of their salespeople, even if they are independent contractors, many brokers want to exercise a high degree of control over such activities. However, the state licensing laws do not preclude the establishment of independent contractor status for tax purposes, provided the relationship is carefully structured to avoid possible classification of such a person as an employee. A broker should always consult a tax attorney concerning such matters.
index
An index, such as the Consumer Price Index, is used to set interest rates. (See index rate)
index lease
A lease containing an escalation clause that is tied to an index. (See lease)
index method
The appraisal method of estimating building costs by multiplying the original cost of the property by a percentage factor to adjust for current construction costs. (See appraisal)
index rate
The rate to which the interest rate on an adjustable rate loan is tied (see adjustable-rate mortgage). At set adjustment periods, the borrower's interest rate will move up or down as the index rate changes. Four indices are most commonly used:
indicators
Certain characteristics or facets of an economy relied on by economists as symptoms of the relative health of the whole economy. Indicators may be coincident (reflecting the economy’s present state), lagging (trailing the business cycle), or leading (providing advance notice of change).
indirect costs
The 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.
indirect management costs
Expenses in a budget of a real estate agency or parent company the are partially attributable to the operation of a management department. (See direct management costs)
individual
An individual is a natural person.
Individual Retirement Account (IRA)
An Individual Retirement Account (IRA) is an IRS-approved way for any working individual to set aside savings for retirement each year in a tax-deferred account. The individual is not taxed for accumulated earnings in an IRA until benefits are withdrawn (usually after retirement when the person may be in a lower income tax bracket).
indoor air
Breathing air inside a habitable structure, often highly polluted because of lack of exchange with fresh oxygen from outdoors. Solvents, smoke, paints, furniture glues, carpet padding, and other synthetic chemicals trapped inside contribute to an often unhealthy environment.
industrial broker
A real estate broker who specializes in brokering industrial real estate. (See broker)
industrial development bonds
A bond that allows private investors to finance apartment and commercial development by using tax-exempt, inexpensive funds. TRA '86 imposed severe restrictions on this financing technique. (See TRA '86)
industrial location theory
Industrial location theory attempts to place facilities where the transportation costs of raw materials and final product is at a minimum. The goal is to select a location that assists in maximizing profit.
industrial park
An industrial park is a designated area zoned and planned for the purpose of industrial development, where multiple industrial businesses operate in close proximity. These parks are typically equipped with infrastructure such as roads, utilities, and services tailored to the needs of manufacturing, warehousing, and distribution companies. Industrial parks aim to promote economic growth by providing a centralized location for industries, fostering business synergies, and facilitating efficient logistics and supply chain operations.
industrial property/parks
A property primarily used for the production or manufacture of goods or products.
industrial revenue bonds
Bonds issued for the development of an industrial park or the construction of a building for lease to commercial tenants.
industrialization
The process by which a society transforms itself from primarily agricultural into one based on the manufacturing of goods and services. Manual labor is often replaced by mechanized mass production. Characteristics of industrialization include the use of technological innovation to solve problems, a more efficient division of labor, and economic growth. (See goods, services)
Industrialized
Industrialized housing is factory-made or prefabricated to some degree.
industrialized housing
Housing that is factory-made or prefabricated to some degree.
industry questions
Questions that may be asked about the industry Industry is any department or branch of art, occupation, or business; especially, one which employs much labor and capital and is a distinct branch of trade; as, the sugar industry; the iron industry; the cotton industry.
infestation (AZ definition)
"Infestation" or "infested" means that the presence of bedbugs is sufficient to materially affect the health and safety of tenants and their guests.
inflation
The gradual reduction of the purchasing power of the dollar, usually related directly to increases in the money supply by the federal government. (See reserve requirements)
inflationary cycles
Inflationary cycles are periods of inflation and disinflation that take turns in a trend over a period of years. During inflationary cycles, present prices are cheaper than future prices. Disinflation is a lowering in prices.
influencing skills
Skills that require an understanding of organizational culture and informal networks, and that enable the establishment of a sphere of influence in which to contribute ideas.
informal career assessments
Tests, assessments, surveys, and inventories that gather information about a person through less structured methods than standardized tests.
Informal hearing
An informal hearing is a less structured proceeding where a respondent meets with a regulatory agency or board to address alleged violations or disputes. It often involves discussions to clarify issues, present evidence, and potentially negotiate a resolution without the formalities of a trial or strict procedural rules. Decisions made in an informal hearing are usually binding unless appealed.
informal organization
An informal organization is a network of personal and social relationships that arise as people associate with others in the work environment.
informal training
Skill development that may be more targeted than formal education to specific employer needs.
informational interview questions
Questions that you can ask another person about their job.
informational interviewing
1) Interviewing others to gain specific career-focused information. 2) process that involves interviewing others to gather information about careers, jobs and worksites before making the decision to change fields.
infrastructure
Basic physical and social facilities: airports, roads and bridges, electrical power generation and transmission, schools and universities, dredged harbors, water supply, waste disposal, mail and telephone systems, radio, television and newspapers.
ingress
A way to enter a property - access. The opposite of egress.
inherent authority
The authority of an agent to perform activities that are not specifically mentioned in the agency agreement but are necessary or customary to carry out an authorized act.
inheritance taxes
An "estate" tax imposed by the state on heirs for their right to inherit property. The tax is not levied on the property itself, but rather on the heirs for their right to acquire the property by succession or devise. Therefore, the rates or the deductions may vary depending on the degree of the relationship.
At the time of a person's death, a statutory lien usually attaches to all real property interests owned by the decedent, which lien remains in effect until the inheritance taxes have been paid and a "tax clearance" is issued. This applies even if property was held in joint tenancy with right of survivorship. (See estate taxes, statutory lien)
initial adjustment cap
The cap that indicates how much the interest rate can increase the first time it adjusts after the fixed-rate period expires.
initial deposit
The initial deposit is the earnest money deposit (as defined in the CAR Purchase Contract).
initial rate
The inital rate charged to a borrower for the first adjustment period of an adjustable rate mortgage. (See adjustable rate mortgage)
injunction
A legal action whereby a court issues a writ or order that forbids a party to a suit or defendant from doing some act. An injunction requires the person to whom it is directed to refrain from doing a particular thing, such as violating deed restrictions or house rules. (See restraining order)
input-output analysis
A technique used in economics for tracing resources and products within an economy. The system of producers and consumers is divided into different branches, which are defined in terms of the resources they require as inputs and what they produce as outputs. The quantities of input and output for a given time period, usually expressed in monetary terms, are entered into an input-output matrix within which one can analyse what happens within and across various sectors of an economy where growth and decline take place.
insolvent
Insolvent means that, for any reason, a financial institution is unable to pay its obligations in the ordinary or usual course of business, or the present fair salable value of its assets is less than the amount that will be required to pay its probable liabilities on its existing debts as they become absolute and matured.
installment contract
A contract for the sale of real estate whereby the purchase price is paid in periodic installments by the purchaser, who is in possession of the property even though title is retained by the seller until a future date, which may not be until final payment. Also called a contract for deed or articles of agreement for warranty deed. (See contract for deed, warranty deed)
installment note
A promissory note with payments of principal and interest made at designated intervals. (See promissory note)
installment sale
An income tax method of reporting gain received from the sale of real estate when the sales price is paid in installments, i.e., where at least one payment is to be received after the close of the taxable year in which the sale occurs. No down payment is required in an installment sale.
If certain conditions are met the taxpayer can save on taxes by postponing the receipt of an installment and the reporting of such income to future years when his or her other income may be lower. Thus, a taxpayer can avoid paying the entire tax on the gain in the year of sale. (See realized capital gains)
installment sales contract
Land contract; sales contract; a contract used in a sale of real property whereby the seller retains title to the property until all or a prescribed part of the purchase price has been paid, but no earlier than one year from the date of possession.
Institute of Real Estate Management (IREM)
A national organization concerned with professional management of real estate. The professional designation conferred by IREM is ARM, Accredited Resident Manager.
IREM Website
institution
A corporation, joint stock company, limited liability company, limited liability partnership, association, trust, partnership, or any similar entity.
institutional advertising
Institutional advertising is comprised of promotional messages aimed at creating an image, enhancing reputation, building goodwill, or advocating the philosophy of an organization, instead of sales promotion.
institutional investor
An institutional investor is a depository institution, real estate investment trust, insurance company, real estate company, accredited investor, licensed mortgage broker or mortgage lender, or other business entity that invests in mortgage loans, including secondary mortgage market institutions, such as the Federal National Mortgage Association (FNMA or Fannie Mae), the Federal Home Loan Mortgage Corporation, and the Government National Mortgage Association (GNMA or Ginnie Mae).
institutional lenders
Institutional lenders are those lenders who lend their own money. Savings and loan associations, banks, life insurance companies and mutual savings banks. (See noninstitutional lenders, savings and loan associations)
insulation
Use of wrapping and filling materials to reduce heat conductivity and improve energy efficiency of buildings and building components; measured in R-value. (See R-value)
insurable value
The highest reasonable value that can be placed on property for insurance purposes.
insurance companies
Insurance companies accumulate large sums of money from the premiums paid by their policyholders. While part of this money is held in reserve to satisfy claims and cover operating expenses, much of it is free to be invested in profit-earning enterprises, such as long term real estate loans. Although insurance companies are considered primary lenders, they tend to invest their money in large, long-term loans that finance commercial and industrial properties rather than single-family home mortgages. (See primary lenders)
insurance policy
A contract between a policy holder and an insurance carrier/company that helps reimburse costs the policy holder might have to pay on a loss, subject to the coverage provided in the insurance policy.
insured mortgage
An insured mortgage is a mortgage insured, or approved to be insured or guaranteed by a federal agency and includes instruments or certificates that are guaranteed by a federal agency and secured by insured or guaranteed mortgages.
integrity
The adherence to moral and ethical principles; soundness of moral character; honesty.
intellectual property
Intellectual property is comprised of knowledge or creative ideas that have commercial value and are protectable under copyright (ⓒ), patent, servicemark (℠), trademark (™), or trade secret laws from imitation, infringement, and dilution. Intellectual property includes brand names, discoveries, formulas, inventions, knowledge, registered designs, software, and works of artistic, literary, or musical nature.
intentional interference with a contract
Intentional interference with contract rights can occur where the tortfeasor convinces a party to breach the contract against the plaintiff, or where the tortfeasor disrupts the ability of one party to perform his obligations under the contract, thereby preventing the plaintiff from receiving the performance promised. Also, this tort may occur when a first party's conduct intentionally causes a second party not to enter into a contractual relationship that otherwise would probably have occurred.
inter vivos trust
An arrangement in which a property owner (trustor) transfers assets to a trustee who assumes specified duties in managing the asset. After payment of operating expenses and trustee's fees, the income generated by the trust property is paid to or used for the benefit of the designated beneficiary. Also known as a living trust.
inter-governmental agreement
An agreement describing tasks to be accomplished using a team effort between two government agencies.
interaction
Mutual or reciprocal action or influence.
interest
This is the cost paid for borrowing money, or the earnings from lending money.
interest factor
In a table, numbers derived from formulas used to determine the present or future value of money. Interest factors are a function of interest rate and time, and can be derived for any combination of the two. (See future worth)
interest only note
A note where installment payments of interest are made during the term of the loan, and the final installment includes all of the principal. Many lines of credit operate this way with periodic interest payments until maturity, when the entire balance is due.
interest rate
A rate which is charged or paid for the use of money. An interest rate is often expressed as an annual percentage of the principal. It is calculated by dividing the amount of interest by the amount of principal. Interest rates often change as a result of inflation and Federal Reserve policies.
interest rate reduction refinance loan (IRRRL)
A type of VA-guaranteed loan that can be used for loan refinancing.
interest rate risk
The exposure of an institution's financial condition to adverse movements in interest rates.
interest-only
A term loan calling for payments of interest only, not to include any amount for principal. (See term loan)
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 loan
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 occupancy agreement
An agreement allowing a buyer to take possession of a property as a tenant prior to close of escrow.
interim use
A temporary property use awaiting transition to its highest and best use.
interlocutory
A legal term referring to a court ruling given in an intermediate stage before the termination of an existing cause of action. It is used to provide a temporary or provisional decision on an issue. Thus, an interlocutory ruling is not final and is not subject to immediate appeal.
intermediate theory
Some states have adopted an intermediate theory of mortgage based on the principles of title theory, but requiring the mortgagee (lender) to foreclose to obtain legal title as is necessary in lien theory. (See lien theory, title theory)
internal rate of return (IRR)
A multi-year analysis of rate of return similar to "financial management rate of return" (FMRR). Used by investors in medium and large properties (occasionally on small properties). Multi-year cash flows and net sale proceeds are analyzed using discounted cash flow techniques to solve for the Financial Management Rate of Return (FMRR).
IRRs and FMRRs are the best rate of return indicators, because they require an analysis of the investor's entire holding period, not just a single year. The discounting process takes into consideration the time value of money and thereby produces a more realistic rate of return. (See Financial Management Rate of Return (FMRR))
Internal Revenue Code Section 1031
In real estate, a "1031 exchange," also known as a like-kind exchange or a Starker exchange, refers to a section of the Internal Revenue Code (Section 1031) that allows an investor to defer paying capital gains taxes on the sale of certain types of property if they reinvest the proceeds into a similar property. By using a 1031 exchange, the investor can defer paying capital gains taxes that would normally be due upon the sale of the original property. This allows the investor to reinvest the full amount of the proceeds into the replacement property.
internal sources of support for job and employment networking
Your inner resources or talents (innate or developed)
International Code Council (ICC)
Organization of national and international building code officials that established and updates the International Building Code.
internet
A worldwide system of computer networks that use the TCP/IP network protocols to facilitate data transmission and exchange.
Internet Data Exchange (IDX)
Internet Data Exchanges (IDXs) give consumers access to information through a company's website.
internet search
A job search strategy that provides assistance with most of the other approaches that are presented, including information on labor markets, salary information, job search techniques and job listings.
Internet service provider (ISP)
A company that provides Internet access to users.
internships
Supervised practical experiences provided by or referred by institutions where student is in process of earning an education, degree, or certification.
interpersonal skills
Observing others closely and expressing yourself effectively.
interplead
A judicial proceeding by which, when two parties make the same claim against a third party, the rightful claimant is determined. As such, he could require them to litigate their problems between themselves, instead of litigating it with him.
interpleader
A judicial proceeding where an innocent third party, such as an escrow agent or broker, can deposit with the court property or money that he or she holds and that is subject to adverse claims. The court can then distribute it to the rightful claimant.
interrogatories
A requests for further information. A formal set of written questions required to be answered in order to clarify matters of evidence and help to determine in advance what facts will be presented at any trial in the case.
Interstate Land Sales Full Disclosure Act
A federal law, enacted in 1968, that regulates interstate land sales. The main purpose of the act is to require disclosure of full and accurate information regarding the property to prospective buyers before they decide to buy. To comply with the act, the developer must prepare a statement of record and register the subdivision with the CFPB. After the registration is effective, the developer must deliver to the purchaser (and obtain a receipt for) the property report before execution of the purchase agreement. The developer must give prospective buyers a cooling-off period of seven calendar days to consider the material contained in the property report.
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's law of descent.
intestate succession
A succession of a property to the heirs when a person dies without a will.
intranet
An intranet is a local, private and restricted communications network created using World Wide Web software.
intrinsic value
An appraisal term referring to the value created by a person's personal preferences for a particular type of property.
intrusion alarm
In property management, an intrusion alarm is a security system designed to detect unauthorized entry into a building or area. It uses sensors on doors, windows, and other access points to trigger an alarm if breached. The alarm can notify property management and/or a security company, helping to prevent theft, vandalism, or other security breaches.
inure
1. to come into use; take or have effect. 2. to become beneficial or advantageous.
inventories
Stocks of raw materials, work in progress, and finished goods. Inventories represent capital tied up in unsold goods that require storage space, insurance, and other incurred costs but are an inevitable part of the process of production and distribution.
inverse condemnation
A property owner forcing a government to take a property by eminent domain when that government's actions resulted in the owner's inability to use the property. (See condemnation, eminent domain)
investing
Investing is when one does research, pencils out their deal, does due diligence, and buys a lower risk property that will pay back positive cash flow from the first day of closing escrow.
investment
Money directed toward the purchase, improvement and development of an asset in expectation of income or profits.
investment group financing
Large real estate projects, such as highrise apartment buildings, office complexes and shopping centers, are often financed as joint ventures through group financing arrangements like syndicates, limited partnerships and real estate investment trusts. (See equity trust)
investment opportunity
Anything, tangible or intangible, that is offered, offered for sale, sold, or traded based wholly or in part on representations, either express or implied, about past, present, or future income, profit, or appreciation.
investment options
When one invests their hard earned cash equity, they don't need to buy real estate. They can buy stocks, bonds, mutual funds, etc. and an investor should compare investment returns and the risk profile on those types of assets to investment returns on real estate - and consider those options if a particular property, or real estate in general, is not an attractive investment for the corresponding risk.
investment property rule
The Internal Revenue Code specifies that no gain or loss should be recognized on the exchange of property held for productive use in trade or business or for investment if the property is exchanged for property of like kind that is to be held for productive use in trade or business or for investment. (See like kind)
investment value
The worth of investment property to a specific investor.
involuntary lien
A lien placed on property without the consent of the property owner. (See lien)
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.
irrevocable right
Unable to cancel or recall; that which is unalterable or irreversible.
irrigation non-expansion area (INA)
An area that uses irrigation water, but the owners of the property cannot expand their irrigation rights beyond the boundaries of the area.
IRS tax lien
A federal tax lien, or Internal Revenue Service (IRS) tax lien, results from a person's failure to pay any portion of federal taxes, such as income and withholding taxes. A federal tax lien is a general, statutory, involuntary lien on all real and personal property held by the delinquent taxpayer. Its priority, however, is based on the date of filing or recording; it does not supersede previously recorded liens. (See lien)
isolate
To set apart from others.
itemized deduction
Located on 1040 Form line 40. This is a deduction that is calculated on Schedule A. A taxpayer uses the larger of the Government given Standard Deduction or the Itemized Deduction.
The I-9 form, officially known as the Employment Eligibility Verification form, is used in the United States to verify the identity and legal authorization to work of all paid employees. Employers are required to complete this form for each individual they hire, which includes reviewing the employee's documentation that proves their identity and employment authorization. The form must be retained by the employer either for three years after the date of hire or for one year after employment ends, whichever is later.
iBuyer
A generic name for an online company that will make an offer on a seller's home using AVM technology (automatic valuation methods) to offer the seller convenience and speed in closing (in exchange for a service fee and/or lower than market sales price)
icon
a small graphic that when clicked, executes a command.
ideal
A standard of perfection, beauty, or excellence.
identification period
The period during which the exchanger must identify replacement property in a 1031 tax deferred exchange. The identification period starts on the day the exchanger transfers the first relinquished property and ends at midnight on the 45th day thereafter.
identity theft
Identity theft is the illegal practice of setting up and using bank accounts and credit facilities fraudulently in another person's name without his or her knowledge.
identity theft report
The meaning given the term by the Federal Trade Commission is at minimum: a) a report that alleges an identity theft; b) a copy of an official, valid report filed by a consumer with an appropriate Federal, State, or local law enforcement agency; and/or c) the filing of which subjects the person filing the report to criminal penalties relating to the filing of false information if, in fact, the information in the report is false.
illusory contract
An apparent contract that is not a contract because the parties have not agreed to be bound.
immediate family member
An immediate family member is a spouse, child, sibling, parent, grandparent, or grandchild, and includes a stepparent, a stepchild, a stepsibling, and an adoptive relationship.
immobility
The fact that property cannot be relocated to satisfy demand where supply is low, nor can buyers always relocate to areas with greater supply.
impact fees
A municipal assessment against new residential, industrial or commercial development projects to compensate for the cost of the public services generated by the new construction.
imperfect markets
An imperfect martket arises when a small group of buyers or sellers is able to directly influence the price and output of a good or service. (See monopoly, oligopoly, monopsony, oligopsony, perfect market)
Implicit bias
Implicit bias is our unconscious brain's ability to recognize patterns and use them to assign people and things to categories, such as threats and non-threats, or safe or non-safe. Every human being has honed the skills of implicit bias because it is a necessary function for survival.
implied agency
An agency agreement created by the actions of the parties, and not a stated (written or verbal) agreement. (See express agency)
implied agreement/contract
A contract under which the agreement of the parties is demonstrated by their acts and conduct.
implied authority
The authority of an agent to perform acts which are reasonably necessary to accomplish the purpose of the agency.
implied covenant
A covenant implied rather than expressly written into a lease. On the part of the lessor this could include the asset being fit for the purpose for which it is let and allowing for quiet enjoyment. On the part of the lessee it could include keeping the premises clean.
implied easement
When the owner of two or more adjacent properties sells a part thereof, he or she grants by implication all those apparent and visible easements which are necessary for the reasonable use of the property granted. (See easement)
implied guarantee
The assumption, prevalent in the financial markets, that the federal government will cover Government Sponsored Enterprise (GSE) debt obligations.
implied warranty
A theory in landlord/tenant law in which the landlord renting residential property implies quiet enjoyment of the property or that the property is habitable. (See habitability, quiet enjoyment)
impossibility of performance
An event, such as the destruction of property, that makes it impossible to perform a contract on its terms.
impound account
A trust account established to set aside funds for future needs relating to a parcel of real property. Many mortgage lenders require an impound account to cover future payments for taxes, assessments, private mortgage insurance and insurance in order to protect their security from defaults and tax liens. In the case of FHA loans, many lenders require a tax reserve of six months and an insurance reserve of one year. When the property is sold and the buyer assumes the seller's mortgage, the lender does not usually return the escrow account balance to the owner. The sum remains with the lender, and it is the responsibility of the buyer and seller to prorate the balance between them. Impound accounts are required for FHA loans, and although VA regulations do not require an impound account for taxes and insurance premiums on GI loans, many lenders customarily require that such accounts be established and maintained. Under RESPA, the amount of reserves in the impound account is limited to one-sixth of the estimated amount of taxes and insurance that will become due in the 12-month period beginning at settlement. Sometimes, part of the purchase price due the seller may be impounded or put aside by escrow to meet the post-closing expense of clearing title or repairing the structure. The issue of use of interest earned on reserve funds is frequently debated. Typically, lenders do not pay interest to borrowers on money held as reserves.
impound funds
Impound funds are collected by the lender as part of the borrower's monthly mortgage payments. These funds are set aside in an impound account, also known as an escrow account, and used to pay property taxes, homeowners insurance, and sometimes other expenses such as homeowners association fees. The lender manages the impound account and ensures that these obligations are met on behalf of the borrower.
impracticability of performance
Excuse for failure to perform contract obligation because of changed circumstances that make a purchase uneconomic; also called impracticability of performance. Also called commercial frustration.
improved lot (AZ subdivision law)
An improved lot is defined as one that has a structure on it or a contract is written for a structure to be built within two years.
The purchaser of improved property does not have the seven-day unilateral rescission right that the purchaser of unimproved property has. In fact, the laws do not provide for unilateral rescission rights for the purchaser of improved property, unless:
- the subdivider/developer has failed to deliver the public report; or
- the purchaser signed the purchase contract before delivery of the public report; or
- the property does not have permanent access.
In all three of the above situations, the rescission period for the purchaser of improved property is three years.
improvement
1) Any structure, usually privately owned, that humans either have erected or built on the property or done to the property, for example, building a fence or a driveway or digging a trench. The key is that humans have done it or placed it. 2) A publicly owned structure added to or benefiting land, such as a curb, sidewalk, street or sewer.
imputed notice
The legal concept that a principal is deemed to have knowledge of information if notice of the information was conveyed to the principal's agent.
in-class
Traditional classroom setting
in-house sale
A sale in which the listing broker is the only broker in the transaction; there is no outside broker involved as in a cooperative sale. Either the listing salesperson finds the buyer, or another salesperson working for the listing broker finds the buyer. If the buyer is a client of the broker, the issue of dual agency arises.
incentive zoning
Zoning that offers incentives to developers, such as retail shops on the first floor of multistory office buildings if a plaza for public use is included. (See zoning)
inclusionary zoning
Inclusionary zoning is a land-use concept where local ordinances require builders to include a certain amount of housing for low and moderate income households.
income
Income is the money an individual, business, or organization receives in exchange for providing goods, services, or through investments. In the context of budgeting and financial management, income refers to the total inflow of funds during a specific period. For a business or association, this can include membership dues, service fees, rental income, investment returns, or grants. Income is a crucial component of a budget, as it determines the available funds for covering expenses, building reserves, and planning for future projects or obligations.
income and expense report
A financial report generated by a property manager that details the income and expenses from a property and the amount remitted to the owner.
income approach
The process of estimating the value of an income-producing property through capitalization of the annual net income expected to be produced by the property during its remaining useful life. (See appraisal)
income capitalization approach
Appraisal method in which the actual or likely net operating income of property is divided by its expected rate of return (capitalization rate) to arrive at an estimate of market value. (See capitalization rate)
income ratio
The relationship between a person's total income and the amount needed to make one month's mortgage payment.
income statement
An income statement is a financial statement that measures a company's financial performance over a specific accounting period. Financial performance is assessed by giving a summary of revenue and expenses through both operating and non-operating activities. It also shows the net profit or loss over a specific accounting period, typically a fiscal quarter or year. Also known as the "profit and loss statement."
income tax
A tax levied on net personal or business income. (See progressive tax)
incorporeal right
A nonpossessory right in real estate; for example, an easement or a right of-way.
increased interest rate
An increased interest rate is an increase in the interest rate after default. This does not apply to interest rate changes in a variable-rate loan otherwise consistent with the home loan documents, provided that the change in the interest rate is not triggered by the event of default or the acceleration of indebtedness.
increasing and diminishing returns
The addition of more improvements to land and structures which increases value only to the assets' maximum value. Beyond that point, additional improvements no longer affect a property's value. As long as money spent on improvements produces an increase in income or value, the law of increasing returns applies. At the point where additional improvements do not increase income or value, the law of diminishing returns applies.
inculpate
The act of becoming culpable or having guilt. Any time evidence or testimony tends to show culpability of a person, it is inculpatory evidence.
incurable depreciation
A depreciated item that would be impossible or too expensive to restore or replace. (See also external obsolescence, functional obsolescence and physical deterioration)
indemnification
Indemnification is an agreement between two parties not to hold one of them liable for future legal action or fines.
indemnify
To guarantee against any loss which another might suffer. For example, a party might agree to pay any claims which may arise from the contract, holding the other harmless.
independent
A brokerage firm operating on-its-own without an affiliation with a regional or national franchise. (See franchise)
independent contractor
One who is retained to perform a certain act, but who is subject to the control and direction of another only as to the end result and not as to how he or she performs the act. The critical feature, and what distinguishes an independent contractor from an employee or agent, is the degree of control the employer has over such a person's activities.
Because many licensing laws make brokers responsible for the activities of their salespeople, even if they are independent contractors, many brokers want to exercise a high degree of control over such activities. However, the state licensing laws do not preclude the establishment of independent contractor status for tax purposes, provided the relationship is carefully structured to avoid possible classification of such a person as an employee. A broker should always consult a tax attorney concerning such matters.
index
An index, such as the Consumer Price Index, is used to set interest rates. (See index rate)
index lease
A lease containing an escalation clause that is tied to an index. (See lease)
index method
The appraisal method of estimating building costs by multiplying the original cost of the property by a percentage factor to adjust for current construction costs. (See appraisal)
index rate
The rate to which the interest rate on an adjustable rate loan is tied (see adjustable-rate mortgage). At set adjustment periods, the borrower's interest rate will move up or down as the index rate changes. Four indices are most commonly used:
- Six-Month Certificate Of Deposit (CD) Spot Indexâ€â€This index is the weekly average of the interest rates paid by institutions on negotiable six-month certificates of deposit. Because it reflects every blip and swing of the market, it can change quickly.
- One-Year Treasury Spot Indexâ€â€This index is the weekly average interest paid by the U.S. Government on funds borrowed for one year. It changes more slowly than the CD index.
- Treasury Twelve-Month Average Indexâ€â€This index is the yearly average of the monthly interest paid by the U.S. Government on actively traded securities. It changes more slowly than either of the preceding indices.
- Eleventh District Cost-of-Funds Indexâ€â€This index is the monthly weighted average cost of what banks on the West Coast pay for their various deposits and for the advances they get through the Federal Home Loan Bank Board of San Francisco. It moves at a tortoise's pace compared to the other indices.
indicators
Certain characteristics or facets of an economy relied on by economists as symptoms of the relative health of the whole economy. Indicators may be coincident (reflecting the economy’s present state), lagging (trailing the business cycle), or leading (providing advance notice of change).
indirect costs
The 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.
indirect management costs
Expenses in a budget of a real estate agency or parent company the are partially attributable to the operation of a management department. (See direct management costs)
individual
An individual is a natural person.
Individual Retirement Account (IRA)
An Individual Retirement Account (IRA) is an IRS-approved way for any working individual to set aside savings for retirement each year in a tax-deferred account. The individual is not taxed for accumulated earnings in an IRA until benefits are withdrawn (usually after retirement when the person may be in a lower income tax bracket).
indoor air
Breathing air inside a habitable structure, often highly polluted because of lack of exchange with fresh oxygen from outdoors. Solvents, smoke, paints, furniture glues, carpet padding, and other synthetic chemicals trapped inside contribute to an often unhealthy environment.
industrial broker
A real estate broker who specializes in brokering industrial real estate. (See broker)
industrial development bonds
A bond that allows private investors to finance apartment and commercial development by using tax-exempt, inexpensive funds. TRA '86 imposed severe restrictions on this financing technique. (See TRA '86)
industrial location theory
Industrial location theory attempts to place facilities where the transportation costs of raw materials and final product is at a minimum. The goal is to select a location that assists in maximizing profit.
industrial park
An industrial park is a designated area zoned and planned for the purpose of industrial development, where multiple industrial businesses operate in close proximity. These parks are typically equipped with infrastructure such as roads, utilities, and services tailored to the needs of manufacturing, warehousing, and distribution companies. Industrial parks aim to promote economic growth by providing a centralized location for industries, fostering business synergies, and facilitating efficient logistics and supply chain operations.
industrial property/parks
A property primarily used for the production or manufacture of goods or products.
industrial revenue bonds
Bonds issued for the development of an industrial park or the construction of a building for lease to commercial tenants.
industrialization
The process by which a society transforms itself from primarily agricultural into one based on the manufacturing of goods and services. Manual labor is often replaced by mechanized mass production. Characteristics of industrialization include the use of technological innovation to solve problems, a more efficient division of labor, and economic growth. (See goods, services)
Industrialized
Industrialized housing is factory-made or prefabricated to some degree.
industrialized housing
Housing that is factory-made or prefabricated to some degree.
industry questions
Questions that may be asked about the industry Industry is any department or branch of art, occupation, or business; especially, one which employs much labor and capital and is a distinct branch of trade; as, the sugar industry; the iron industry; the cotton industry.
infestation (AZ definition)
"Infestation" or "infested" means that the presence of bedbugs is sufficient to materially affect the health and safety of tenants and their guests.
inflation
The gradual reduction of the purchasing power of the dollar, usually related directly to increases in the money supply by the federal government. (See reserve requirements)
inflationary cycles
Inflationary cycles are periods of inflation and disinflation that take turns in a trend over a period of years. During inflationary cycles, present prices are cheaper than future prices. Disinflation is a lowering in prices.
influencing skills
Skills that require an understanding of organizational culture and informal networks, and that enable the establishment of a sphere of influence in which to contribute ideas.
informal career assessments
Tests, assessments, surveys, and inventories that gather information about a person through less structured methods than standardized tests.
Informal hearing
An informal hearing is a less structured proceeding where a respondent meets with a regulatory agency or board to address alleged violations or disputes. It often involves discussions to clarify issues, present evidence, and potentially negotiate a resolution without the formalities of a trial or strict procedural rules. Decisions made in an informal hearing are usually binding unless appealed.
informal organization
An informal organization is a network of personal and social relationships that arise as people associate with others in the work environment.
informal training
Skill development that may be more targeted than formal education to specific employer needs.
informational interview questions
Questions that you can ask another person about their job.
informational interviewing
1) Interviewing others to gain specific career-focused information. 2) process that involves interviewing others to gather information about careers, jobs and worksites before making the decision to change fields.
infrastructure
Basic physical and social facilities: airports, roads and bridges, electrical power generation and transmission, schools and universities, dredged harbors, water supply, waste disposal, mail and telephone systems, radio, television and newspapers.
ingress
A way to enter a property - access. The opposite of egress.
inherent authority
The authority of an agent to perform activities that are not specifically mentioned in the agency agreement but are necessary or customary to carry out an authorized act.
inheritance taxes
An "estate" tax imposed by the state on heirs for their right to inherit property. The tax is not levied on the property itself, but rather on the heirs for their right to acquire the property by succession or devise. Therefore, the rates or the deductions may vary depending on the degree of the relationship.
At the time of a person's death, a statutory lien usually attaches to all real property interests owned by the decedent, which lien remains in effect until the inheritance taxes have been paid and a "tax clearance" is issued. This applies even if property was held in joint tenancy with right of survivorship. (See estate taxes, statutory lien)
initial adjustment cap
The cap that indicates how much the interest rate can increase the first time it adjusts after the fixed-rate period expires.
initial deposit
The initial deposit is the earnest money deposit (as defined in the CAR Purchase Contract).
initial rate
The inital rate charged to a borrower for the first adjustment period of an adjustable rate mortgage. (See adjustable rate mortgage)
injunction
A legal action whereby a court issues a writ or order that forbids a party to a suit or defendant from doing some act. An injunction requires the person to whom it is directed to refrain from doing a particular thing, such as violating deed restrictions or house rules. (See restraining order)
input-output analysis
A technique used in economics for tracing resources and products within an economy. The system of producers and consumers is divided into different branches, which are defined in terms of the resources they require as inputs and what they produce as outputs. The quantities of input and output for a given time period, usually expressed in monetary terms, are entered into an input-output matrix within which one can analyse what happens within and across various sectors of an economy where growth and decline take place.
insolvent
Insolvent means that, for any reason, a financial institution is unable to pay its obligations in the ordinary or usual course of business, or the present fair salable value of its assets is less than the amount that will be required to pay its probable liabilities on its existing debts as they become absolute and matured.
installment contract
A contract for the sale of real estate whereby the purchase price is paid in periodic installments by the purchaser, who is in possession of the property even though title is retained by the seller until a future date, which may not be until final payment. Also called a contract for deed or articles of agreement for warranty deed. (See contract for deed, warranty deed)
installment note
A promissory note with payments of principal and interest made at designated intervals. (See promissory note)
installment sale
An income tax method of reporting gain received from the sale of real estate when the sales price is paid in installments, i.e., where at least one payment is to be received after the close of the taxable year in which the sale occurs. No down payment is required in an installment sale.
If certain conditions are met the taxpayer can save on taxes by postponing the receipt of an installment and the reporting of such income to future years when his or her other income may be lower. Thus, a taxpayer can avoid paying the entire tax on the gain in the year of sale. (See realized capital gains)
installment sales contract
Land contract; sales contract; a contract used in a sale of real property whereby the seller retains title to the property until all or a prescribed part of the purchase price has been paid, but no earlier than one year from the date of possession.
Institute of Real Estate Management (IREM)
A national organization concerned with professional management of real estate. The professional designation conferred by IREM is ARM, Accredited Resident Manager.
IREM Websiteinstitution
A corporation, joint stock company, limited liability company, limited liability partnership, association, trust, partnership, or any similar entity.
institutional advertising
Institutional advertising is comprised of promotional messages aimed at creating an image, enhancing reputation, building goodwill, or advocating the philosophy of an organization, instead of sales promotion.
institutional investor
An institutional investor is a depository institution, real estate investment trust, insurance company, real estate company, accredited investor, licensed mortgage broker or mortgage lender, or other business entity that invests in mortgage loans, including secondary mortgage market institutions, such as the Federal National Mortgage Association (FNMA or Fannie Mae), the Federal Home Loan Mortgage Corporation, and the Government National Mortgage Association (GNMA or Ginnie Mae).
institutional lenders
Institutional lenders are those lenders who lend their own money. Savings and loan associations, banks, life insurance companies and mutual savings banks. (See noninstitutional lenders, savings and loan associations)
insulation
Use of wrapping and filling materials to reduce heat conductivity and improve energy efficiency of buildings and building components; measured in R-value. (See R-value)
insurable value
The highest reasonable value that can be placed on property for insurance purposes.
insurance companies
Insurance companies accumulate large sums of money from the premiums paid by their policyholders. While part of this money is held in reserve to satisfy claims and cover operating expenses, much of it is free to be invested in profit-earning enterprises, such as long term real estate loans. Although insurance companies are considered primary lenders, they tend to invest their money in large, long-term loans that finance commercial and industrial properties rather than single-family home mortgages. (See primary lenders)
insurance policy
A contract between a policy holder and an insurance carrier/company that helps reimburse costs the policy holder might have to pay on a loss, subject to the coverage provided in the insurance policy.
insured mortgage
An insured mortgage is a mortgage insured, or approved to be insured or guaranteed by a federal agency and includes instruments or certificates that are guaranteed by a federal agency and secured by insured or guaranteed mortgages.
integrity
The adherence to moral and ethical principles; soundness of moral character; honesty.
intellectual property
Intellectual property is comprised of knowledge or creative ideas that have commercial value and are protectable under copyright (ⓒ), patent, servicemark (℠), trademark (™), or trade secret laws from imitation, infringement, and dilution. Intellectual property includes brand names, discoveries, formulas, inventions, knowledge, registered designs, software, and works of artistic, literary, or musical nature.
intentional interference with a contract
Intentional interference with contract rights can occur where the tortfeasor convinces a party to breach the contract against the plaintiff, or where the tortfeasor disrupts the ability of one party to perform his obligations under the contract, thereby preventing the plaintiff from receiving the performance promised. Also, this tort may occur when a first party's conduct intentionally causes a second party not to enter into a contractual relationship that otherwise would probably have occurred.
inter vivos trust
An arrangement in which a property owner (trustor) transfers assets to a trustee who assumes specified duties in managing the asset. After payment of operating expenses and trustee's fees, the income generated by the trust property is paid to or used for the benefit of the designated beneficiary. Also known as a living trust.
inter-governmental agreement
An agreement describing tasks to be accomplished using a team effort between two government agencies.
interaction
Mutual or reciprocal action or influence.
interest
This is the cost paid for borrowing money, or the earnings from lending money.
interest factor
In a table, numbers derived from formulas used to determine the present or future value of money. Interest factors are a function of interest rate and time, and can be derived for any combination of the two. (See future worth)
interest only note
A note where installment payments of interest are made during the term of the loan, and the final installment includes all of the principal. Many lines of credit operate this way with periodic interest payments until maturity, when the entire balance is due.
interest rate
A rate which is charged or paid for the use of money. An interest rate is often expressed as an annual percentage of the principal. It is calculated by dividing the amount of interest by the amount of principal. Interest rates often change as a result of inflation and Federal Reserve policies.
interest rate reduction refinance loan (IRRRL)
A type of VA-guaranteed loan that can be used for loan refinancing.
interest rate risk
The exposure of an institution's financial condition to adverse movements in interest rates.
interest-only
A term loan calling for payments of interest only, not to include any amount for principal. (See term loan)
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 loan
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 occupancy agreement
An agreement allowing a buyer to take possession of a property as a tenant prior to close of escrow.
interim use
A temporary property use awaiting transition to its highest and best use.
interlocutory
A legal term referring to a court ruling given in an intermediate stage before the termination of an existing cause of action. It is used to provide a temporary or provisional decision on an issue. Thus, an interlocutory ruling is not final and is not subject to immediate appeal.
intermediate theory
Some states have adopted an intermediate theory of mortgage based on the principles of title theory, but requiring the mortgagee (lender) to foreclose to obtain legal title as is necessary in lien theory. (See lien theory, title theory)
internal rate of return (IRR)
A multi-year analysis of rate of return similar to "financial management rate of return" (FMRR). Used by investors in medium and large properties (occasionally on small properties). Multi-year cash flows and net sale proceeds are analyzed using discounted cash flow techniques to solve for the Financial Management Rate of Return (FMRR).
IRRs and FMRRs are the best rate of return indicators, because they require an analysis of the investor's entire holding period, not just a single year. The discounting process takes into consideration the time value of money and thereby produces a more realistic rate of return. (See Financial Management Rate of Return (FMRR))
Internal Revenue Code Section 1031
In real estate, a "1031 exchange," also known as a like-kind exchange or a Starker exchange, refers to a section of the Internal Revenue Code (Section 1031) that allows an investor to defer paying capital gains taxes on the sale of certain types of property if they reinvest the proceeds into a similar property. By using a 1031 exchange, the investor can defer paying capital gains taxes that would normally be due upon the sale of the original property. This allows the investor to reinvest the full amount of the proceeds into the replacement property.
internal sources of support for job and employment networking
Your inner resources or talents (innate or developed)
International Code Council (ICC)
Organization of national and international building code officials that established and updates the International Building Code.
internet
A worldwide system of computer networks that use the TCP/IP network protocols to facilitate data transmission and exchange.
Internet Data Exchange (IDX)
Internet Data Exchanges (IDXs) give consumers access to information through a company's website.
internet search
A job search strategy that provides assistance with most of the other approaches that are presented, including information on labor markets, salary information, job search techniques and job listings.
Internet service provider (ISP)
A company that provides Internet access to users.
internships
Supervised practical experiences provided by or referred by institutions where student is in process of earning an education, degree, or certification.
interpersonal skills
Observing others closely and expressing yourself effectively.
interplead
A judicial proceeding by which, when two parties make the same claim against a third party, the rightful claimant is determined. As such, he could require them to litigate their problems between themselves, instead of litigating it with him.
interpleader
A judicial proceeding where an innocent third party, such as an escrow agent or broker, can deposit with the court property or money that he or she holds and that is subject to adverse claims. The court can then distribute it to the rightful claimant.
interrogatories
A requests for further information. A formal set of written questions required to be answered in order to clarify matters of evidence and help to determine in advance what facts will be presented at any trial in the case.
Interstate Land Sales Full Disclosure Act
A federal law, enacted in 1968, that regulates interstate land sales. The main purpose of the act is to require disclosure of full and accurate information regarding the property to prospective buyers before they decide to buy. To comply with the act, the developer must prepare a statement of record and register the subdivision with the CFPB. After the registration is effective, the developer must deliver to the purchaser (and obtain a receipt for) the property report before execution of the purchase agreement. The developer must give prospective buyers a cooling-off period of seven calendar days to consider the material contained in the property report.
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's law of descent.
intestate succession
A succession of a property to the heirs when a person dies without a will.
intranet
An intranet is a local, private and restricted communications network created using World Wide Web software.
intrinsic value
An appraisal term referring to the value created by a person's personal preferences for a particular type of property.
intrusion alarm
In property management, an intrusion alarm is a security system designed to detect unauthorized entry into a building or area. It uses sensors on doors, windows, and other access points to trigger an alarm if breached. The alarm can notify property management and/or a security company, helping to prevent theft, vandalism, or other security breaches.
inure
1. to come into use; take or have effect. 2. to become beneficial or advantageous.
inventories
Stocks of raw materials, work in progress, and finished goods. Inventories represent capital tied up in unsold goods that require storage space, insurance, and other incurred costs but are an inevitable part of the process of production and distribution.
inverse condemnation
A property owner forcing a government to take a property by eminent domain when that government's actions resulted in the owner's inability to use the property. (See condemnation, eminent domain)
investing
Investing is when one does research, pencils out their deal, does due diligence, and buys a lower risk property that will pay back positive cash flow from the first day of closing escrow.
investment
Money directed toward the purchase, improvement and development of an asset in expectation of income or profits.
investment group financing
Large real estate projects, such as highrise apartment buildings, office complexes and shopping centers, are often financed as joint ventures through group financing arrangements like syndicates, limited partnerships and real estate investment trusts. (See equity trust)
investment opportunity
Anything, tangible or intangible, that is offered, offered for sale, sold, or traded based wholly or in part on representations, either express or implied, about past, present, or future income, profit, or appreciation.
investment options
When one invests their hard earned cash equity, they don't need to buy real estate. They can buy stocks, bonds, mutual funds, etc. and an investor should compare investment returns and the risk profile on those types of assets to investment returns on real estate - and consider those options if a particular property, or real estate in general, is not an attractive investment for the corresponding risk.
investment property rule
The Internal Revenue Code specifies that no gain or loss should be recognized on the exchange of property held for productive use in trade or business or for investment if the property is exchanged for property of like kind that is to be held for productive use in trade or business or for investment. (See like kind)
investment value
The worth of investment property to a specific investor.
involuntary lien
A lien placed on property without the consent of the property owner. (See lien)
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.
irrevocable right
Unable to cancel or recall; that which is unalterable or irreversible.
irrigation non-expansion area (INA)
An area that uses irrigation water, but the owners of the property cannot expand their irrigation rights beyond the boundaries of the area.
IRS tax lien
A federal tax lien, or Internal Revenue Service (IRS) tax lien, results from a person's failure to pay any portion of federal taxes, such as income and withholding taxes. A federal tax lien is a general, statutory, involuntary lien on all real and personal property held by the delinquent taxpayer. Its priority, however, is based on the date of filing or recording; it does not supersede previously recorded liens. (See lien)
isolate
To set apart from others.
itemized deduction
Located on 1040 Form line 40. This is a deduction that is calculated on Schedule A. A taxpayer uses the larger of the Government given Standard Deduction or the Itemized Deduction.
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