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I

implied agency

one that is created by circumstances, appearances, and/or conduct of the parties.

Example:

  • A seller allows a broker to show his property without any agreement to representation. To third parties viewing the house, the believe the broker was acting on the seller's behalf and so the third party may rightfully infer an agency relationship.

implied agreement

is an unwritten contract/agreement created by the actions of the parties.


Impound Account

Also called the escrow account, is the trust account made to set aside money for future needs.


improvement

(1)Any structure, usually privately owned, erected on a site to enhance the value of the property - for example, building a fence or driveway. (2)A publicly owned structure added to or benefiting land, such as a curb, sidewalk, street or sewer.

income ratio

is one of the three ratios (operating expense ratio; the income ratio; and the break-even ratio) that can be useful in analyzing property income. Ratios provide a quick financial “health” check of an investment. The income ratio is the portion of the effective gross that is income.

incurable depreciation

the economic feasibility of “fixing” the item which is causing the value loss. An item of depreciation is incurable if the cost to cure exceeds the value increase derived from implementing the cure. Alternatively, if the value increase is less than the cost the cure, the deficiency will be categorized as incurable.

The term incurable does not reflect on whether the item “can” or “cannot” be replaced or repaired. Rather it reflects on whether it makes economic sense to cure the item.

independent contractor

someone 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 the way in which the act is performed. Unlike an employee, an independent contractor pays all expenses, social security and income taxes and receives no employee benefits.

index

an undeterminable economic indicator that is used to adjust the interest rate in the loan. Most indexes are tied to US Treasury securities.


index method

The least accurate method of calculating cost new and the least used method is the index method (used mainly to corroborate cost estimates from other methods). The index method attempts to calculate the cost new of a structure by multiplying its original cost by the change in some known index associated with price increases. While the cost approach is normally not concerned with the original or historic cost of a structure, the index method requires the original cost, year built, and cost index from the year of construction to be known. It is also necessary to know the current year index. The index would be associated with price increases in construction and could be consumer price index or construction cost index. To calculate the cost new using the index method, multiply the original cost of the structure times the new index over the old index (the new index over the old index reflects the price changes during the period of time).

indirect costs

are the “soft costs” or hidden costs associated with construction that are other than labor and materials.

Examples of indirect costs include finance charges, appraisal fees, engineering fees, building permits, taxes during construction, etc.

innocent misrepresentation

is basically a negligent misrepresentation made by someone who did not have a duty to verify the accuracy of the statement and had no intentions to deceive. A homeowner rents their home unaware that the Department of Transportation will be widening a nearby road. A rentor asks if there is much traffic on the road and the homeowner says no. The tenant can not cancel the lease after they move in based upon the landlords’ innocent misrepresentation.


inquiry notice

is one of the three ways the law presumes an individual has notice of an event. Inquiry notice presumes that under certain circumstances a reasonable person will make additional inquiries to determine if an event has occurred and its status.

installment contract

under an installment contract the seller retains legal title, the buyer takes possession and gets equitable title to the property. Although the buyer obtains possession under the contract, the seller is not obligated to execute and deliver a deed to the buyer until the terms of the contract have been satisfied.

intangibles tax

The intangibiles tax is a state tax on notes secured by real estate and must be paid before recording is allowed. Tax is on amount of new mortgage (if for more than 3 years). Lender must record the mortgage/security deed in order to foreclose later.

  • Calculation is: $1.50 for each $500 of mortgage amount (or part of $500) to be recorded. Proper rounding is important.
  • Where Recorded: At the court house in the county where property is located.
  • When Recorded: As soon as possible after signing.
  • Requirements: Must be signed, witnessed, and notarized.

Note: The tax must always end in either $.50 or an even $1.00. If tax is not paid lender cannot foreclose. It is the responsibility of the borrower, but may be paid by anyone on his behalf. If an existing loan is being assumed, that intangibles tax on that loan has already been paid and there is NO new intangible tax.

Examples:
Mortgage is $300,000
IT = $300,000 x $1.50/500 = $900.00

Mortgage is $275,400 convert the 400 to one 500 increment
IT = $275,500 x $1.50/500 = $826.50


intended use

must be determined within the first step of the appraisal process. The intended use or intended function of an appraisal describes what the intended users are actually going to do with the appraiser’s analyses and conclusions.


intended user

includes any individuals in addition to the client who are expected to use the appraisal report. Normally, intended users will be identified during the first step of the appraisal process when the appraiser communicates with the client at the time the parties agree on the assignment. Often, however, it will be incumbent on the appraiser to expect or inquire as to the existence of other users in addition to the client based on the nature of the appraisal.

intermediate theory

Adopted by a number of states, a theory based on the principles of title theory but requires the mortgagee foreclose to obtain legal title.

internet advertising

state laws vary, in Georgia, Rule 520-1-.09 of the Commission's Rules and Regulations defines Internet advertising as subject to the regulations governing all other advertising media.

internet listing display policy

a policy from the National Association of REALTORS that allows all MLS members to have equal right to display MLS data, and respects the rights of property owners and their listing brokers to market a property as they wish.

intestate

refers to the status of a deceased and their estate when a will does NOT exist. When a person dies without a will, they are said to die intestate.

involuntary alienation

The act of transferring property to another. Examples of involuntary alienation would be eminent domain or adverse possession.

involuntary lien

A lien place on property without the consent of the propery owner.


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