The International Association of Assessing Officers (IAAO) is a nonprofit, educational, and research association dedicated to promoting innovation and excellence in property appraisal, assessment administration, and property tax policy.
Insulating Concrete Forms (ICFs) provide high-quality, energy-efficient building systems that streamline construction processes, improve energy performance, and offer enhanced durability.
IDRC (Industrial Development Research Council) was an organization focused on industrial real estate development and research, which has now merged with CoreNet Global.
An illiquid asset is an asset that cannot be quickly converted into cash without a substantial loss in value. This is a critical consideration in real estate investing, as properties can take considerable time to sell and often incur significant transaction costs.
Illiquidity refers to the inability to quickly convert an asset into cash without a significant loss in value. Real estate is considered an illiquid investment because of the time, effort, and costs required to sell properties.
Impact fees are charges levied by a city or county on developers as a condition for granting permission for development projects, typically to cover the costs of expanding public services to accommodate the new development.
Imperative necessity refers to the legal principle that grants an agent the authority to take necessary and immediate action in case of emergencies, even if it means disregarding the principal’s instructions, to protect the interests of the principal.
In real estate and legal terms, 'implied' refers to obligations, rights, or contracts that are not explicitly declared in writing or verbally but are assumed to exist under the circumstances and are enforceable by law. It contrasts with 'expressed,' which refers to explicitly stated agreements or declarations.
Implied agency is an agency relationship established through the conduct, behavior, or circumstances of the involved parties, rather than through explicit agreement or written contract.
An implied contract is an agreement created by actions of the parties involved, but it is not necessarily spoken or written. Such contracts are legally binding, provided they demonstrate mutual intent and agreement.
An implied easement, also known as an easement by implication, is a legal right to use someone else's property for a specific purpose without formal documentation. It is typically established through long-term use and necessity.
The act of placing funds or assets in the control of a third party, often by court order, until specific conditions are met or legal matters are resolved.
An impound account, also known as an escrow account, is a type of savings account set up by a mortgage lender to pay property taxes and insurance premiums on behalf of the borrower.
Improved land refers to property that has been enhanced with certain modifications and development activities to make it more useful and potentially more valuable compared to raw land.
The Improvement Ratio measures the relative value of improvements on a property compared to its unimproved value, providing insight into the investment in enhancements versus the land value itself.
Improvements refer to alterations made to raw land, such as the addition of buildings, streets, and sewage systems, which tend to increase the value of the property.
Imputed interest is the interest that tax authorities assume to be paid on a loan, even if no actual interest payment has been made or if the interest rate is below market levels.
In perpetuity refers to an indefinite duration, often used legally to describe rights that are permanent or last indefinitely.
"In Rem" is a legal term derived from Latin which means “against the thing.” It refers to proceedings directed against the property itself rather than against a specific person. For example, In Rem actions are typically used in scenarios involving property seizure due to non-payment of taxes.
In situ, a Latin term meaning 'in place' or 'onsite,' refers to processes or treatments that are carried out directly at the location of interest. In real estate, this often pertains to remediation efforts carried out at the contaminated site, without the need to transport pollutants offsite.
In-Fill Development refers to the process of developing vacant or underutilized land within existing urban areas that are already largely developed. This type of development is a strategy to manage urban growth without extending urban boundaries.
An Incentive is an added inducement or reward for successful performance. It is generally offered to better align the interests of an agent or employee with that of the principal or employer in a real estate context.
Inchoate refers to rights, claims, or interests that are not fully developed or completed. In real estate, it often pertains to certain spousal rights that remain incomplete until specific events occur.
Inclusionary zoning is a local law that requires housing developers to reserve a certain percentage of housing units for lower-income buyers in exchange for approval of their projects, aiming to increase the availability of affordable housing.
The Income Approach is one of three methods used to appraise real estate value, primarily utilized for properties that generate consistent income, such as apartments, office buildings, hotels, and shopping centers.
Income in real estate refers to the monetary benefits or other state advantages derived from the use of property, skills, or business. This includes rents, fees, royalties, and revenues from various activities related to the property.
Income limits are the maximum amounts that a family can earn and still be eligible for various government housing assistance programs. These limits differ based on family size and geographic area.
The Income Multiplier, also known as Gross Rent Multiplier, is a valuation method that establishes the relationship between a property’s purchase price and its gross rental income. It is commonly used to assess the attractiveness of an income-generating property investment.
Income participation, also known as a participation mortgage, describes a loan where the lender is entitled to a portion of the income produced from the real estate property in addition to receiving interest payments. This shared income could come from property rents or the sale of the property.
Income Property refers to real estate that is specifically utilized to generate rental income. It encompasses a variety of property types that can provide steady income streams to the owner.
An income stream refers to a regular flow of money generated by a business or investment. It can come from various sources such as rentals, dividends, interest, or any other form of residual income.
The Income/Expense Ratio in real estate measures the relationship between a property's operating income and its operating expenses, providing investors insights into financial performance.
An individual who is not legally capable of completing a contract due to mental illness, being a minor, or other factors rendering them incapable. Contracts involving incompetent parties are voidable.
Incorporating refers to the process of forming a corporation under state regulations or providing a geographic area with the legal status of a political subdivision. Incorporation can protect personal assets by limiting liability to the assets owned by the corporation.
Incorporeal refers to intangible legal interests that do not have a physical form. These may include rights or privileges that are exercised over or in relation to real estate without possessing the property itself.
An incumbrance (or encumbrance) is a claim, lien, charge, or liability attached to and binding real property. These claims often affect the property's use, transferability, or value.
Incurable depreciation or obsolescence refers to a defect in a property that cannot be rectified or is not financially feasible to rectify, often due to fundamental structural issues.
Indemnification refers to a contractual obligation typically found in insurance agreements where one party agrees to compensate the other for any potential loss or damage incurred. This concept is widely used to manage risk, particularly in real estate transactions.
Indemnify refers to the act of protecting another party against loss or damage, typically through compensation. This term is commonly used in insurance and real estate transactions to ensure that financial loss is mitigated.
An indenture is a formal legal agreement made between two or more parties, especially regarding obligations in the world of real estate, finance, and bond issuance.
An independent appraisal is a value estimate provided by an individual who does not stand to benefit financially from the property's value or its income. The independence ensures the appraisal is impartial and objective, which is crucial for making informed financial decisions.
An Independent Contractor is a self-employed individual who provides services to a client under terms specified in a contract. Independent contractors are responsible for their own taxes, benefits, and often have more flexibility in their work schedules.
An independent fee appraiser is a professional who estimates the value of a property without any vested interest in the property and is not affiliated with a lending association or investor.
An index is a statistical measure that indicates some current economic or financial condition. Indexes are often used to make adjustments in wage rates, rental rates, loan interest rates, and pension benefits set by long-term contracts.
An index lease is a rental agreement that adjusts the rent based on a published record of cost changes like the Consumer Price Index (CPI). This helps maintain the rent's real value over time despite inflation.
An Indexed Loan is a long-term loan where the term, payment, interest rate, or principal amount may be adjusted periodically in accordance with a specific index.
Indirect costs, also known as soft costs, refer to expenses that are not directly associated with the physical building structure but are incurred during the construction period.
Indirect damages, also known as consequential damages or severance damages, refer to losses that do not flow directly and immediately from an act but are a consequence of the initial act. These are often distinguished from direct damages, which are the immediate and obvious losses.
An industrial park is an area designed and zoned specifically for manufacturing and related activities, offering a conducive environment for industrial development.
Industrial property refers to real estate used for industrial purposes, such as housing manufacturing plants, warehouses, and research facilities. These properties are specifically designed to support industrial operations and can vary widely in terms of their structure and usage.
A technique within market analysis to estimate future demand for a property based on recent trends and projections.
Inflation in real estate refers to the rise in property prices due to the diminished purchasing power of money over time. This effect can make real estate a popular choice as a hedge against inflation.
A crucial aspect of financial compliance involving the submission of detailed transaction information to the IRS. This ensures accurate tax assessment and can include various types of income, including commissions earned by real estate sales agents and the proceeds from real estate transactions.
Infrastructure refers to the fundamental public works and physical organizational structures needed for the functioning of a society or neighborhood, including roads, bridges, water and sewer systems, drainage systems, and essential public utilities.
Ingress and egress refer to the right to enter (ingress) and exit (egress) a property. These terms are critical in real estate contracts as they ensure individuals have legal access to properties, facilitating movements in and out particularly for landlocked premises.
Inheritance tax, a type of tax imposed on those who inherit property from a decedent, is based on the property's value. Unlike estate tax, which is based on the total value of the deceased's estate, the inheritance tax is levied on the shares received by individual heirs.
Initial equity refers to the amount of down payment made by a buyer when purchasing a property. Initial equity does not include appreciation, mortgage amortization, or transaction costs.
The initial interest rate is the beginning rate applied to an adjustable-rate mortgage, typically set for an initial period before adjustments. It often acts as an introductory rate that may be lower than prevailing market rates.
The Initial Rate Period is the timeframe in an Adjustable-Rate Mortgage (ARM) during which the initial interest rate is fixed. This period lasts until the first scheduled adjustment, after which the interest rate is recalibrated according to the underlying index.
An injunction is a legal order issued by a court that requires a party to either do or refrain from doing specific acts. It is often used to prevent harmful actions until a resolution is reached.
Inline stores are smaller retail units lined up in a straight front or L shape within a shopping center. These differ from larger units like junior anchors and are usually home to neighborhood retailers.
Inner City generally refers to the older and more urbanized area of a large city surrounding the Central Business District. It is often characterized by densely populated neighborhoods that may face socioeconomic issues, including low income levels and a high proportion of minority racial and ethnic groups.
An innocent purchaser, in real estate terms, is a party who acquired property without being aware of its contamination, providing they had a due environmental assessment before the purchase.
In real estate, an inside lot refers to a plot of land within a subdivision that is enclosed by other lots on its sides, rather than a corner lot which has road frontage on at least two sides.
A detailed, physical examination of property or documents to ascertain their condition or accuracy. Inspections are essential for validating compliance with building standards, property sales requirements, and legal scrutiny of agreements.
An Inspection Addendum or Clause is an agreement within a real estate contract that allows a buyer to inspect the property before finalizing the sale, enabling negotiations or cancellation based on inspection results.
An installment contract, also known as a land contract, is a legal agreement in real estate transactions where the buyer agrees to make regular payments to the seller in exchange for the right to occupy and use the property, with full ownership transferred only after all payments have been made.
An installment sale is a sales method in which the seller receives payments over time and reports a portion of the capital gain to tax authorities as payments are received, thus spreading tax liabilities.
A mathematically derived factor from compound interest functions indicating the level periodic payment required to fully pay off a $1.00 loan over a certain period.
Installments are parts of the same debt, payable at successive periods as agreed. These payments are typically structured to reduce a mortgage or potentially another form of financial obligation over time.
The Institute for Professionals in Taxation (IPT) is an organization dedicated to the uniform and equitable administration of ad valorem and sales and use taxes while minimizing the costs of tax administration and compliance. It emphasizes professional ethics and standards.
The Institute of Real Estate Management (IREM) is a professional organization dedicated to serving property managers. It is affiliated with the National Association of REALTORS® and is known for publishing the Journal of Property Management.
The Institute of Real Estate Management (IREM) is a global organization that provides education, resources, and professional certifications to real estate management professionals, enhancing their skills and career prospects.
Institutional lenders are financial intermediaries that provide loans and other financial products, primarily funding these activities through deposits or customer investments and operating under regulatory guidelines to minimize risk.
Institutional property refers to properties that fall under a zoning category designated for facilities that serve public and community functions, such as educational institutions, healthcare facilities, and other organizations serving the public interest.
An Instrument is a written legal document created to establish the rights and liabilities of the parties involved. It is essential in the legal and real estate fields to ensure clarity and enforceability of the terms agreed upon by all parties.
Insulation involves materials used to slow the transfer of heat through walls, roofs, and other elements of a building to reduce energy costs and help maintain a uniform internal temperature.
Insurable interest is a financial stake in an entity or event such that the loss of that entity or the occurrence of the event would cause a financial loss to the interested party. It is a prerequisite for purchasing insurance and claiming benefits on a policy.
An insurable title refers to a property title that a title insurance company is willing to insure, ensuring that the title is clear of any disputes, defects, or encumbrances which could affect the ownership or value. This term is significant in real estate transactions to mitigate risk and provide protection to the buyer or lender.
The insurable value is the cost of total replacement of destructible improvements to a property, which insurers consider when issuing coverage.
Insurance provides protection against loss resulting from hazards such as fire and wind over a specified period. The property owner's risk is assumed by the insurer in return for the payment of a policy premium. It is a crucial element in real estate transactions and property management.
Insurance (Mortgage) is a service, generally purchased by a borrower, that indemnifies the lender in case of foreclosure of the loan. Indemnification is generally limited to losses suffered by the lender in the foreclosure process.
An insurance binder is a temporary document provided by an insurance company that serves as proof of insurance coverage until a formal policy is issued.
Insurance coverage refers to the total amount and type of insurance a property owner maintains to protect against various risks, including hazards, liability, and other potential losses.
An insured mortgage is a type of home loan that is backed by either private mortgage insurance or government mortgage insurance programs to protect lenders against borrower default.
Intangible Personal Property refers to non-physical assets that hold value and cannot be seen or touched. It includes items like cash, accounts receivable, goodwill, patents, trademarks, and other non-tangible assets. These are typically exempt from ad valorem tax in most states.
Intangible property refers to nonphysical assets that hold value and can be legally transferred or owned. Unlike tangible property such as buildings or land, intangible property includes items that do not have a physical presence but represent financial value or legal rights.
Intangible value refers to the worth of an asset that cannot be physically seen or touched, such as brand reputation, intellectual property, and goodwill.
An Intelligent Building is equipped with advanced computer and electrical systems that sense and control the heating, cooling, lighting, and other building systems to ensure maximum efficiency and comfort.
The intended use of an appraisal is a key element in the appraisal process, defining the purpose and context in which a property's market value assessment will be used.
Inter vivos is a legal term referring to a transfer or gift made during a person's lifetime, as opposed to one made as part of a will or posthumously. This type of transaction is typically irrevocable.
An Inter Vivos Trust is a legal entity created during an individual’s lifetime to manage and protect assets for the benefit of the trust’s beneficiaries. It is also known as a living trust.
Interest in real estate can refer to both the cost associated with borrowing money to finance real estate transactions and the extent of ownership in a property.
Interest deductions under current tax law vary based on the type of interest incurred. From investment interest to consumer interest, different rules apply for deductibility.
An interest rate is the percentage of a loan amount charged by the lender to the borrower for the use of the borrowed funds. It can also represent the rate of return on an investment. Understanding interest rates is crucial for real estate transactions as they significantly affect mortgage payments and the overall cost of borrowing.
The Interest Rate Reduction Refinance Loan (IRRRL) is a program offered by the Veterans Administration that allows eligible service members to refinance their existing VA loans to lower-interest, fixed-rate mortgages.
Interest rate risk refers to the potential variability in investment returns due to changes in interest rates. This risk can profoundly impact the market value of real estate investments and mortgage-backed securities.
An interest-only loan is a type of financing where the borrower only pays the interest on the principal balance at regular intervals until the loan reaches its maturity date, at which time the full principal amount becomes due. This type of loan does not require amortization during the length of the loan term.
Interim Financing is a short-term loan used when a property owner is unable or unwilling to arrange permanent financing. It often includes a CONSTRUCTION LOAN and is typically arranged for less than three years, allowing time for financial or market conditions to improve.
Intermediation refers to the process where financial intermediaries, such as banks or savings and loan associations (S&Ls), facilitate the flow of funds between savers and borrowers. This process enables the efficient allocation of resources and supports economic growth by providing a mechanism for savers to earn a return on their funds and borrowers to access the capital they need.
