Real Estate Glossary

Letter I

I-BeamAn iron or steel structural framing member, in cross-section forming the letter I.

Idem SonansSounding the same. Legally, names improperly spelled need not void an instrument, provided the written name sounds the same as the correctly spelled name, and there is no evidence of any intent to deceive by incorrect spelling.

Identifiable GranteeThe person, to whom real property interest is to be conveyed, identified in such a way so as to reasonably separate that person from all others in the world.

Igenous RockRock produced by the cooling of magma within the earth (plutonic rock) or on the surface (volcanic rock).

I-GirderSee: I-Beam.

IlliquidityAssets that cannot easily be converted to cash.

IlluviationThe deposit of soil material by elevation.

Immediate Delivery ProgramProgram giving sellers up to 60 days to deliver mortgages Freddie Mac has agreed to buy on the secondary market.

ImmobilityPhysical characteristic of real estate referring to the fact that it cannot move from one place to another.

ImmovableUsed frequently in definitions of real estate, things which cannot be moved, such as land, buildings, etc.

Impact FeesFees charged for improvements that impact public facilities such as sewers. Building a new house or even adding a bathroom could result in impact fees being charged by the local government.

Imperial GallonA measure of 277 cubic inches, as opposed to the 231 cubic inch standard gallon.

ImpliedSomething apparent from the circumstances, rather than from direct action or communication.

Implied AgencyAn agency which is not expressly set out but must be deduced from the circumstances and other facts. It is an actual agency as opposed to an ostensible agency or agency by estoppel (see which).

Implied By LawRequired by law to be part of an agreement and treated by a court as part of an agreement even if it contradicts the express terms agreed to by the parties.

Implied ContractA contract under which the agreement of the parties is demonstrated by their acts and conduct.

Implied GrantA method of creating an easement. One party may be using another's property for the benefit of both parties.

Implied ListingAn implied contract (see which) which would be governed by contract law, including the statute of frauds.

Implied NoticeA form of actual notice not expressly given. For example: "A" purchases property from "B". "C" is in possession. "A" will have implied notice that "C" may have an interest in the property if reasonable observation and inquiry on the part of "A" would have disclosed the interest of "C".

Implied WarrantyA warranty given by law or circumstances rather than by words of the seller. See also: Express Warranty.

Implied Warranty Of HabitabilityAn implied guarantee that the property is safe and fit for human habitation; treated by law as an implicit provision in every residential lease, regardless of the express terms of the lease.

Impound AccountAccount held by a lender for payment of taxes, insurance, or other periodic debts against real property. The mortgagor or trustor pays a portion of, for example, the yearly taxes, with each monthly payment. The lender pays the tax bill from the accumulated funds.

Impound DisbursementsThe payment of escrowed funds to pay taxes and insurance when due.

Improved LandLand having either on-site improvements, off-site improvements, or both.

Improved ValueAn appraisal term encompassing the total value of land and improvements (buildings) rather than the separate values of each.

Improvement1. Improvements on land: any structure, usually privately owned, erected on a site to enhance the value of the property; 2. Improvements to land: usually a publicly owned structure.

Improvement BondA bond issued by a municipality to finance any public improvement.

Improvement Mortgage BondA bond to finance improvements by a business which is secured by a general mortgage.

ImprovementsGenerally, buildings, but may include any permanent structure or other development, such as a street, utilities, etc. See also: On- Site Improvements; Off-Site Improvements.

Improvements-On-LandSee: On-Site Improvements.

Improvements-To-LandSee: Off-Site Improvements.

Inadequate ImprovementSee: Underimprovement.

Incentive ZoningA system by which developers receive zoning incentives on the condition that specific physical, social, or cultural benefits are provided to the community.

InchoateIncomplete; begun but not completed; contingent.

Inchoate DowerThe dower interest of a wife during the life of her husband. May vest at his death.

Inchoate InstrumentAn unrecorded instrument (such as a deed) which is valid only between the parties and those having actual notice; but not against "the world" as it would be after recording.

Inchoate RightIncomplete right, such as a wife's dower interest in her husband's property during his life.

IncineratorA heavily insulated, furnace-like device for burning rubbish, giving off a minimum of heat and smoke, and burning the rubbish more completely than an open fire.

IncomeGenerally, any increase in the assets of a person or corporation caused by labor, sales, or return on invested funds. May be different for tax purposes.

Income ApproachThe process of estimating the value of an income-producing property by capitalization of the annual net income expected to be produced by the property during its remaining useful life.

Income AveragingA method of figuring income tax by paying tax on the average income per year for the past five years. For example: A, a real estate salesperson, earns $10,000 taxable income for 4 years. In the fifth year, A sells a shopping center and earns $100,000 taxable income. A could take the total income for 5 years ($140,000), divide by 5 ($28,000), and pay tax on $28,000 for the past 5 years, less what A has already paid.

Income Capitalization ApproachEstimating value (v) by dividing Net Operating Income (N.O.I.) by an overall capitalization rate R0. N.O.I. ÷ R0 = v. See: Overall Capitalization Rate.

Income ParticipationSee: Participation.

Income PropertyProperty which produces income, usually from rental. May also include any property not entirely owner occupied.

Income Tax LienSee: Tax Lien (2).

IncompetentOne who is mentally or physically unable to handle his property without help. A court will appoint someone to handle the financial affairs of such a person.

IncorporateTo create a corporation.

Incorporeal RightA nonpossessory right in real estate.

Incorporeal RightsRights to intangibles, such as legal actions, rather than rights to property (rights to possession or use of land).

Increase ClauseSee: Escalation Clause.

Increasing And Diminishing ReturnsAn economic theory that an increase in capital or manpower will not increase production proportionately (five workers may do less than five times the work of one worker; and two workers may do more than twice the work of one worker). When the increase in production is proportionately greater than the addition, there is an increasing return; when production is proportionately less than the addition, the return diminishes.

Increasing ReturnsThe principle that applies when increased expenditures for improvements to a given parcel of land yield an increasing percentage return on investment.

IncrementAn increase or growth, gained or added, such as a population increase.

Incumbrance (encumbrance)A claim, lien, charge, or liability attached to and binding real property. Any right to, or interest in, land which may exist in one other than the owner, but which will not prevent the transfer of fee title.

Incurable Depreciation1. A defect that would cost more to fix than the increase in value it would bring. 2. A defect that is not financially practical to fix.

Incurable Functional ObsolescenceSee: Functional Obsolescence.

Incurable Physical DeteriorationSee: Physical Deterioration.

Indemnity AgreementAn agreement by which one party agrees to repay another for any loss or damage the latter may suffer.

Indenture DeedA deed executed by both grantor and grantee, containing reciprocal agreements (grants or obligations). See also: Deed Poll.

Independent AppraisalAn appraisal by one who has no interest in the property or nothing to gain from a high or low appraisal.

Independent ContractorOne 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. Unlike an employee, an independent contractor pays all of his or her expenses, pays his or her income and Social Security taxes, and receives no employee benefits. Many real estate salespeople are independent contractors.

IndexSee: Rate Index.

IndexingTo alter mortgage term, payment, or rate according to inflation and/or a suitable mortgage rate index. See also: Rate Index.

Index LeaseLease that allows the rent to be increased or decreased periodically, based on changes in the a selected economic index, such as the Consumer Price Index.

Indigent MortgageSee: County Mortgage.

Indirect Construction CostsThose costs other than labor and materials, such as administrative costs, financing costs, taxes and insurance, loss of interest on money invested, etc.

Indirect CostCosts associated with a construction project, other than labor and materials.

Indirect LightingLighting by means of reflecting the light off the ceiling, wall, or other reflector, in order to soften glare.

Indirect LossA loss that occurs as a consequence of the direct loss. For example, regarding property insurance, on a dwelling policy, fire is covered as a direct loss. Also called: Consequential Loss. Compare: Direct Loss.

Individual Retirement AccountSee: IRA.

Indorsement (endorsement)The act of the holder of a note, bill, check, or other negotiable instrument, of assigning said instrument by signing the back of the instrument, with or without qualifications.

Industrial Development BondsBonds issued to finance industrial or commercial real estate developments.

Industrial MultipleA method of promoting property exclusively listed by a member of the American Industrial Real Estate Association (A.I.R.), by making each listing known to all members.

Industrial ParkA subdivision in the pattern of residential subdivisions, except catering to the needs of industry. Off-site improvements may have stronger roads, heavy plumbing and wiring, wider streets for trucks, rail spurs, and other necessities for industry.

Industrial PropertyAll land and buildings used or suited for use in the production, storage, or distribution of tangible goods.

Industrial SidingA railroad siding (spur track) which serves an industrial park or building.

Industrial Tax ExemptionAn exemption from local property taxes granted to encourage industries to come into an area. Has been used successfully in the South. Usually granted for a definite period.

InflationThe expanse or increase in an economy over its natural growth. Usually caused by over printing money and over-extending credit. Marked by a rapid increase in the price of goods.

Informed ConsentWritten evidence that a client is aware of and has given permission to an agent to perform a specific action or take on a specific role in the client agent relationship.

InfrastructureServices and facilities necessary to cities, such as streets, bridges, public transportation routes, utility generation and delivery, etc. The term can be applied in the same way to a development.

Ingress And EgressA right to enter upon and pass through land.

In GrossPersonal rather than attached to land. An easement in gross has no dominant tenement.

InharmoniousConflicting surroundings. In appraising, a property not suited to its surroundings is inharmonious and consequently less valuable than a property which is better located.

InheritIn strict legal usage, to acquire property by intestate succession; commonly used to mean acquiring property either by intestate succession or by will.

InheritanceIn a legal meaning, real property obtained by law rather than by will; generally misused to mean anything which comes from a deceased person.

Inheritance TaxA tax on the transfer of property from a deceased person; based on the right to acquire the property rather than the property itself.

Initial Interest RateSee: Start Rate.

InitialsThe first letter of one's first (maybe middle) and last name. It may be used as a signature when indicated and is usually used to indicate agreement to a change, correction, addition, deletion, or other alteration of a document. Modernly, stricter laws regarding the validity of initials and marks to replace a signature have been enacted.

Initial TermThe period before the first adjustment of an adjustable rate mortgage.

InjunctionAn order by a court preventing one from acting or restraining one from continuing some action.

Inlaid ParquetSee: Parquet Floor.

Inland WatersAll bodies of water exclusive of the open sea.

InletA narrow waterway extending inland.

InliquidityDescribing assets not readily convertible to cash.

Inner CityA term of no exact meaning but having the connotation of a low economic, high crime area of a large city, rather than merely the geographic central area of a city.

Innocent Landowner DefenseA defense created by the Superfund Amendments and Reauthorization Act of 1986 (SARA). One who acquires contaminated property may avoid liability for cleanup by showing that he/she did not know, nor should not have known, of the contamination. The depth of inquiry required by the landowner before acquisition has not yet been completely established.

Innocent Purchaser For ValueAnother term for one who purchases in good faith, or a bona fide purchaser. The innocent part refers to no prior knowledge (actual or constructive) of an unrecorded interest in the property, such as a prior sale to a third party or a loan secured by the property. The for value part refers to a valuable consideration paid by said purchaser for the property.

In PerpetuityOf endless duration; forever.

In PersonamDirected at specific persons rather than against property or generally for all people.

InquiryAn item on a consumer's credit report showing that there has been a request for a copy of that person's credit report. An excessive number of inquiries may lower the person's FICO SCORE.

Inquiry NoticeWhen circumstances indicate a possible problem prompting further investigation, a person may be held to have had notice of the problem even if he does not have actual knowledge of it.

In ReIn the matter of.

In RemPertaining to property or people in general.

Inside LotNot a corner lot.

Inside TrimSee: Interior Trim.

InsolvencyGenerally applied to a person, corporation, bank, etc., when there is an inability to pay debts as they become due or within a reasonable time thereafter.

InsolventIncapable of meeting one's current debts.

InspectionAn examination of property for various reasons, such as a termite inspection, inspection to see if required repairs were made before funds are released, etc.

InstallmentThe periodic payments, usually monthly, made by a borrower.

Installment ContractA method of purchasing by installment (usually monthly) payments. When referring to real property, it is usually called a land contract.

Installment Land Sales ContractSee: Land Contract.

Installment NoteA note calling for payment of both principal and interest in specified amounts, or specified minimum amounts, at specific intervals.

Installment Note, Balance Due DateA note requiring a final payment much greater than the periodic installment payment. A balloon note.

Installment Note Interest ExtraSee: Interest Extra Note.

Installment Note Interest IncludedSee: Interest Included Note.

Installment SaleA method of reporting gain received from the sale of real estate when the sale price is paid in two or more installments over two or more years. If the sale meets certain requirements, a taxpayer can spread recognition of the reportable gain over more than one year, which may result in tax savings.

Installment Sales ContractAgreement for which the buyer makes payments to the seller in exchange for the right to occupy and use the property, but no deed or title is transferred until all, or a specified portion of, payments have been made. Also called: Land Contract.

Institute Of Real Estate ManagementThe organization conferring the designation of C.P.M. (Certified Property Manager), which is considered the most prestigious designation in the field of property management.

Institutional LendersBanks, savings and loan associations, and other businesses which make loans to the public in the ordinary course of business, rather than individuals, or companies which may make loans to employees.

Institutional PropertyProperty, the use of which is created by law, such as schools or hospitals. May also refer to corresponding private properties, such as private schools and hospitals.

InstrumentAny writing having legal form and significance, such as a deed, mortgage, will, lease, etc.

InsulationMaterials used for their qualities of hindering the passage or transmission of sound, cold, heat, or electricity.

Insulation BoardSheets of compressed vegetable pulp, such as sugarcane or cornstalks, which, because of tiny pockets of trapped air throughout its density, provides good insulation.

Insurable InterestConcerning real property, an interest which, if terminated, destroyed, or in any other way interfered with, would cause a financial loss to the holder of the interest. May be a mortgagee, owner, lessee, etc.

Insurable TitleA title to land that a title company will insure.

Insurable ValueValue of property for insurance purposes. Based on the value of the property, less indestructible parts (land) for fire insurance. For title insurance purposes, the sales price (market value) is used.

InsuranceThe indemnification against loss from a specific hazard or peril through a contract (called a policy) and for a consideration (called a premium).

Insurance AccountFor an insured loan, the account showing the amount a lender or buyer may recover for losses suffered on the insured loan.

Insurance BinderTemporary insurance until a more permanent policy can be written.

Insured MortgageA mortgage insured against loss to the mortgagee in the event of default and a failure of the mortgaged property to satisfy the balance owing plus costs of foreclosure. May be insured by F.H.A., V.A., or by independent mortgage insurance companies.

Insured ValueThe amount for which property can be insured, usually representing only the replacement cost of the structure and disregarding any value for land.

Intangible AppurtenanceAn appurtenant right that does not involve ownership of physical objects, for example, easements as opposed to mineral rights, which involve tangibles.

Intangible AssetsSee: Intangible Property.

Intangible PropertyProperty which has value but cannot be physically touched, such as a patent, the goodwill of a business, etc.

Intangible ValueThe value of intangible property or the intangible portions of tangible property.

Integration ClauseContract provision stating the document contains the entire agreement between the parties.

Inter AliaAmong other things.

Inter AliosBetween other persons.

InterchangeA method of connecting highways by ramps and grade level changes, so as to obviate the need for controls (lights, stop signs, etc.).

Interchange RampA ramp at an interchange. See also: Interchange.

InterestA charge made by a lender for the use of money.

Interest Accrual RateThe percentage rate at which interest accrues based on the terms of the note. Example: A fixed rate loan of 6% per year would have an accrual rate of 6%. An adjustable rate loan would have an accrual rate based on the formula for determining interest.

Interest Extra NoteA note stating an equal (usually monthly) payment on principal, plus interest. As the interest decreases (based on declining principal balance) the total payment decreases. The amount applied to principal remains the same. See also: Interest Included Note.

Interest Included NoteA note having equal payments (usually monthly). Interest is figured on the declining principal balance. As the principal decreases, interest also decreases, applying more of each payment to principal. See also: Interest Extra Note.

Interest Only MortgageA mortgage under which the principal amount borrowed is repaid in one payment. Periodic interest payments are made

Interest Only NoteSee: Interest Only Mortgage.

Interest RateThe percentage of an amount of money which is paid for its use for a specified time. Usually expressed as an annual percentage.

Interest Rate Buydown PlanSee: Buydown.

Interest Rate CapThe maximum interest rate increase of an Adjust-able Mortgage Loan. For example: a 12% loan with a 5% interest rate cap would have maximum interest for the life of the loan which would not exceed 17%.

Interest Rate CeilingThe highest rate that can be charged on an adjustable rate mortgage. Also called a Cap.

Interest Rate FloorThe lowest rate that can be charged on an adjustable rate mortgage if interest rates go down. Not all adjustable rate loans allow rates to go below the beginning rate.

Interest Rate TrendsThe direction of interest rates. Higher rates usually predict a slowdown in real estate sales and mortgage refinancing. Lower rates predict the opposite.

Interim FinancingA short-term loan usually made during the construction phase of a building project, often referred to as a construction loan.

Interim LoanSee: Interim Financing.

Interior LotSee: Inside Lot.

Interior TrimAll of the moldings on the inside walls of a building.

Interlocutory DecreeA provisional or temporary decree, pending some contingency before a final decree. Sometimes the contingency may be only the passage of time.

IntermediarySee: Qualified Intermediary.

Internal Environmental HazardAn environmental hazard that occurs within a property.

Internal Rate Of Return (IRR)The IRR measures the annual yield of a financial instrument. For investments, the IRR measures the average rate of return the investment is expected to yield over its life. For lending, the IRR measures the cost of credit over the life of the credit transaction.

InterpleaderA court action which may be filed in an existing case or be the initial action. One holding funds which are in dispute, but not having an interest in the funds, would file an interpleader. For example: An escrow agent is holding a deposit of a buyer which funds both buyer and seller claim to be entitled. Escrow is willing to give the funds to either buyer or seller but does not want to be liable for giving the funds to the wrong party. The interpleader filed by the escrow agent asks the court to determine to whom the funds should be awarded.

IntersectionA crossing, usually of roads, but may be lines, such as on a map or survey.

InterstateBetween two or more states.

Interstate Highway SystemA federal system of roads which cross the United States, linking its major cities.

Interstate Land SalesSales of land to a buyer in another state. Because the buyer is usually totally dependent on the seller for information regarding the property, federal disclosure laws have been passed to aid the buyer. The buyer also has a period (now 3 days) after signing a purchase agreement, in which to rescind. The laws were passed because of the large promotional land sales of the 50's and early 60's, some of which sold worthless desert and swamp land.

Interval OwnershipSee: Time-Sharing.

Inter VivosBetween living persons. Property transferred between living persons would fall under different laws than property transferred after death or in contemplation of death.

Inter Vivos TrustA trust during the life of the settlor rather than upon death. See also: Testamentary Trust.

IntestacySee: Intestate.

IntestateThe condition of a property owner who dies without leaving a will. Title to such property passes to his or her heirs as provided in the state law of descent.

Intestate SuccessionDistribution of property to the heirs of a person who died intestate.

Intrinsic ValueThe value of the thing itself, rather than any special features which make its market value different. For example: The intrinsic value of a painting is the worth of the canvas and paint, rather than the value to an art collector.

InureTo take effect, to result.

InvalidHaving no force or effect.

InvalidateTo render null and void.

Inventory(1) The goods of a business which are sold in the every day course of business, such as houses by a builder. (2) A detailed list of property.

Inverse CondemnationCondemnation of property near a parcel so as to cause the parcel to lose much of its value. In such a case, the parcel is, in effect, condemned, and just compensation must be paid to the owner.

Inverse Condemnation ActionCourt action by a private landowner against the government, seeking compensation for damage to property that resulted from government action.

InvestmentMoney directed toward the purchase, improvement, and development of an asset in expectation of income or profits. A good financial investment has the following characteristics: safety, regularity of yield, marketability, acceptable denominations, valuable collateral, acceptable duration, required attention, and potential appreciation.

Investment PropertyGenerally, any property purchased for the primary purpose of profit. The profit may be from income or from resale.

Investment TrustA company which sells its own stock and invests the money in stocks, real estate, or other investments. See also: R.E.I.T., Real Estate Investment Trust.

Investment ValueThe highest price an investor would pay for a property based on how well it will serve her investment goals.

Investment YieldThe gain from an investment in real property, including both income and resale. Expressed as a percentage of the amount invested.

Involuntary AlienationSee: Involuntary Conveyance.

Involuntary ConversionConversion of real property to personal property (money) without the voluntary act of the owner. This occurs when property is taken by eminent domain (condemnation). The owner is allowed to convert back to real property (buy another property) without paying tax on the gain from the condemnation. This must be done within a set time (3 years) and the prices of the old and new property are considered to form a new tax base.

Involuntary ConveyanceA transfer of real property without the consent of the owner, such as by a divorce decree, by condemnation, etc.

Involuntary LienA lien, such as a tax lien, judgment lien, etc., which attaches to property without the consent of the owner, rather than mortgage lien, to which the owner agrees.

Involuntary TrustSee: Constructive Trust.

IRA (Individual Retirement Account)Savings programs available to individuals. These plans allow for a certain amount to be deposited each year. This money is not subject to income tax for that year or following years as long as it is not withdrawn. The money is taxed as withdrawn upon retirement, usually when the depositor is in a lower tax bracket. During the life of the account, the money may be put into various interest bearing investments. Securities dealers as well as banking institutions now offer IRA's.

Ironclad ContractA term of no legal meaning, being a contract which is considered strong (as iron) and hard to break.

Iron-Safe ClauseA clause in a policy of fire insurance requiring the insured to keep certain records (usually inventory) in a fire-proof safe.

Irregular CurveSee: French Curve.

IrrevocableThat which cannot be revoked or recalled, such as certain trusts, contracts, and other legal relationships.

Irrevocable ConsentSubjects out-of-state licensees to the jurisdiction of the courts of the state of New York.

Irrevocable OfferSee: Option.

IrrigationWatering, usually by means of pipes, to increase the fertility of ground in areas where additional moisture is needed for crop growth.

Irrigation DistrictA local agency which builds and operates an irrigation system (supplies water to a designated area), and has authority to levy taxes for that purpose.

Irrigation DitchA ditch, channel, canal, etc., used to carry water to or through a planted area to bring water to the planted crops.

Island(1) Land surrounded by a body of water. (2) A space between oncoming lanes of a highway.

Island ZoningSee: Spot Zoning.

Isohyetal LineA line on a map connecting areas which have approximately the same rainfall or thunderstorm activities.