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INCOME PROPERTY - Real estate that is owned for investment purposes and not used as the owner's residence.

INTEREST - charge paid for the use of money.


INTEREST RATE CAP - 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 CEILING - highest rate that can be charged on an adjustable rate mortgage. Also called a Cap.

INTEREST RATE FLOOR - 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 TRENDS - direction of interest rates. Higher rates usually predict a slowdown in real estate sales and mortgage refinancing. Lower rates predict the opposite.

INTERIM FINANCING - Temporary financing, usually for construction. See Bridge Loan

INTERIOR LOT - Also See: Inside Lot.

INTERIOR TRIM - All of the moldings on the inside walls of a building.

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

INTERMEDIARY - Also See: Qualified Intermediary.

INTERNAL RATE OF RETURN (IRR) - 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.

INTERPLEADER - 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.

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

INTERSTATE - Between two or more states.

INTERSTATE HIGHWAY SYSTEM - federal system of roads which cross the United States, linking its major cities.

INTERSTATE LAND SALES - Sales 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 OWNERSHIP - Also See: Time-Sharing.

INTESTACY - Also See: Intestate.

INTESTATE - Without leaving a will, or leaving an invalid will so that the property of the estate passes by the laws of succession rather than by direction of the deceased.

INTRINSIC VALUE - 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.

INURE - To take effect, to result.

INVENTORY - (1) 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, such as of an estate.

INVERSE CONDEMNATION - Condemnation 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.

INVESTMENT - putting up of money with the intent to make a profit or receive interest.

INVESTMENT PROPERTY - Generally, any property purchased for the primary purpose of profit. The profit may be from income or from resale.

INVESTMENT TRUST - 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 YIELD - gain from an investment in real property, including both income and resale. Expressed as a percentage of the amount invested.

INVOLUNTARY ALIENATION - Also See: Involuntary Conveyance.

INVOLUNTARY CONVERSION - Conversion 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 CONVEYANCE - transfer of real property without the consent of the owner, such as by a divorce decree, by condemnation, etc.

INVOLUNTARY LIEN - 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 TRUST - Also See: 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.

IRON-SAFE CLAUSE - clause in a policy of fire insurance requiring the insured to keep certain records (usually inventory) in a fire-proof safe.

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

IRREGULAR CURVE - Also See: French Curve.

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


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

IRRIGATION DISTRICT - 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 DITCH - 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 ZONING - Also See: Spot Zoning.

ISOHYETAL LINE - line on a map connecting areas which have approximately the same rainfall or thunderstorm activities.

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

I-GIRDER - Also See: I-Beam.

IDEM SONANS - Sounding 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.

IGENOUS ROCK - Rock produced by the cooling of magma within the earth (plutonic rock) or on the surface (volcanic rock).

ILLUVIATION - deposit of soil material by elevation.

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

IMPACT FEES - Fees 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 GALLON - measure of 277 cubic inches, as opposed to the 231 cubic inch standard gallon.

IMPLIED - Something apparent from the circumstances, rather than from direct action or communication.

IMPLIED AGENCY - 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 CONTRACT - contract formed by the actions of the parties rather than by their written or oral agreement.

IMPLIED LISTING - implied contract (see which) which would be governed by contract law, including the statute of frauds.

IMPLIED NOTICE - 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 WARRANTY - warranty given by law or circumstances rather than by words of the seller. See also: Express Warranty.

IMPOUND ACCOUNT - Account 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 DISBURSEMENTS - payment of escrowed funds to pay taxes and insurance when due.

IMPROVED LAND - Land having either on-site improvements, off-site improvements, or both.

IMPROVED VALUE - appraisal term encompassing the total value of land and improvements (buildings) rather than the separate values of each.

IMPROVEMENT BOND - bond issued by a municipality to finance any public improvement.

IMPROVEMENT MORTGAGE BOND - bond to finance improvements by a business which is secured by a general mortgage.

IMPROVEMENTS - Generally, 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-LAND - Also See: On-Site Improvements.

IMPROVEMENTS-TO-LAND - Also See: Off-Site Improvements.

IN GROSS - Personal rather than attached to land. An easement in gross has no dominant tenement.

IN PERPETUITY - Of endless duration; forever.

IN PERSONAM - Directed at specific persons rather than against property or generally for all people.

IN RE - In the matter of.

IN REM - Pertaining to property or people in general.

INADEQUATE IMPROVEMENT - Also See: Underimprovement.

INCHOATE - Incomplete; begun but not completed; contingent.

INCHOATE DOWER - dower interest of a wife during the life of her husband. May vest at his death.

INCHOATE INSTRUMENT - 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.

INCINERATOR - 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.

INCOME - Generally, 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 APPROACH - Also See: Income Capitalization Approach.

INCOME AVERAGING - 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 APPROACH - Estimating value (v) by dividing Net Operating Income (N.O.I.) by an overall capitalization rate R0. N.O.I. ÷ R0 = v. Also See: Overall Capitalization Rate.

INCOME PARTICIPATION - Also See: Participation.

INCOME PROPERTY - Property which produces income, usually from rental. May also include any property not entirely owner occupied.

INCOME TAX LIEN - Also See: Tax Lien (2).

INCOMPETENT - One 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.

INCORPORATE - To create a corporation.

INCORPOREAL RIGHTS - Rights to intangibles, such as legal actions, rather than rights to property (rights to possession or use of land).

INCREASE CLAUSE - Also See: Escalation Clause.

INCREASING AND DIMINISHING RETURNS - 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.

INCREMENT - increase or growth, gained or added, such as a population increase.

INCUMBRANCE (ENCUMBRANCE) - 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 DEPRECIATION - 1. 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 OBSOLESCENCE - Also See: Functional Obsolescence.

INCURABLE PHYSICAL DETERIORATION - Also See: Physical Deterioration.

INDEMNITY AGREEMENT - agreement by which one party agrees to repay another for any loss or damage the latter may suffer.

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

INDEPENDENT APPRAISAL - appraisal by one who has no interest in the property or nothing to gain from a high or low appraisal.

INDEPENDENT CONTRACTOR - term is most important as used to describe the relationship of broker and salesperson. The salesperson is either an employee or independent contractor. If an employee, the broker must withhold income tax and pay social security, provide workman's compensation when applicable, and may be liable for some negligent acts of the salesperson while on the job, such as automobile accidents. The broker avoids all of these responsibilities if the salesperson is an independent contractor. The greater the control over the salesperson, the more likely the salesperson will be considered an employee. Some examples of this control would be required office hours or attendance at regularly scheduled meetings, as well as payment or reimbursement by the broker for license fees, auto expenses, etc.

INDEX - Also See: Rate Index.

INDEX LEASE - Also See: Escalation Clause (2).

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

INDIGENT MORTGAGE - Also See: County Mortgage.

INDIRECT CONSTRUCTION COSTS - Those costs other than labor and materials, such as administrative costs, financing costs, taxes and insurance, loss of interest on money invested, etc.

INDIRECT LIGHTING - Lighting by means of reflecting the light off the ceiling, wall, or other reflector, in order to soften glare.


INDORSEMENT (ENDORSEMENT) - 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 BONDS - Bonds issued to finance industrial or commercial real estate developments.

INDUSTRIAL MULTIPLE - 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 PARK - 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 PROPERTY - (1) Land which is zoned industrial. (2) Real property improved specifically for industrial use.

INDUSTRIAL SIDING - railroad siding (spur track) which serves an industrial park or building.

INDUSTRIAL TAX EXEMPTION - 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.

INFLATION - 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.

INFRASTRUCTURE - Services 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 EGRESS - right to enter upon and pass through land.

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

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

INHERITANCE TAX - tax on the transfer of property from a deceased person; based on the right to acquire the property rather than the property itself.


INITIAL TERM - period before the first adjustment of an adjustable rate mortgage.

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

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

INLAID PARQUET - Also See: Parquet Floor.

INLAND WATERS - All bodies of water exclusive of the open sea.

INLET - narrow waterway extending inland.

INLIQUIDITY - Describing assets not readily convertible to cash.

INNER CITY - 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 DEFENSE - 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 VALUE - Another 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.

INQUIRY - 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.

INSIDE LOT - Not a corner lot.

INSIDE TRIM - Also See: Interior Trim.

INSOLVENCY - Generally 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.

INSOLVENT - Incapable of meeting one's current debts.

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

INSTALLMENT - periodic payments, usually monthly, made by a borrower.

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


INSTALLMENT NOTE - note calling for payment of both principal and interest in specified amounts, or specified minimum amounts, at specific intervals.



INSTALLMENT NOTE, BALANCE DUE DATE - note requiring a final payment much greater than the periodic installment payment. A balloon note.

INSTITUTE OF REAL ESTATE MANAGEMENT - 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 LENDERS - Banks, 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 PROPERTY - Property, 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.

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

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

INSULATION BOARD - Sheets of compressed vegetable pulp, such as sugarcane or cornstalks, which, because of tiny pockets of trapped air throughout its density, provides good insulation.

INSURABLE INTEREST - Concerning 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 TITLE - Fee title (ownership) to property free of defects. There may, and usually are, liens and encumbrances.

INSURABLE VALUE - Value 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.

INSURANCE - contract under which, for a consideration, one party (the insurer) agrees to indemnify another (the insured) for a possible loss under specific conditions. May be loss of life, health, property, or property rights.

INSURANCE ACCOUNT - For an insured loan, the account showing the amount a lender or buyer may recover for losses suffered on the insured loan.

INSURANCE BINDER - Temporary insurance until a more permanent policy can be written.

INSURED MORTGAGE - 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.

INTANGIBLE ASSETS - Also See: Intangible Property.

INTANGIBLE PROPERTY - Property which has value but cannot be physically touched, such as a patent, the goodwill of a business, etc.

INTANGIBLE VALUE - value of intangible property or the intangible portions of tangible property.

INTER ALIA - Among other things.

INTER ALIOS - Between other persons.

INTER VIVOS - Between living persons. Property transferred between living persons would fall under different laws than property transferred after death or in contemplation of death.

INTER VIVOS TRUST - trust during the life of the settlor rather than upon death. See also: Testamentary Trust.

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

INTERCHANGE RAMP - ramp at an interchange. See also: Interchange.

INTEREST - (1) share or right in some property. (2) Money charged for the use of money (principal).

INTEREST ACCRUAL RATE - 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 NOTE - 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 NOTE - 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 MORTGAGE - mortgage under which the principal amount borrowed is repaid in one payment. Periodic interest payments are made

INTEREST ONLY NOTE - Also See: Interest Only Mortgage.

INTEREST RATE - percentage of an amount of money which is paid for its use for a specified time. Usually expressed as an annual percentage.

Whatever your financing needs,
we will tailor a loan that's right for you.


Wall Street Journal
Commercial News

5/28/22 US Business

Big Lots, Hibbett Become Latest Retailers to Show Inflation Pain
Big-box chain Big Lots and sporting-goods retailer Hibbett saw double-digit sales declines as higher prices across the spectrum dent shopper spending power.

SEC Confirms Probe Into Elon Musk's Disclosure of Twitter Stake
The agency is asking the Tesla CEO why he didn?t make the required filing within 10 days after his Twitter stake crossed the 5% threshold.

Shoppers Are Fretting. Stores Are Listening.
Consumers are growing cautious, and companies from Walmart to Procter & Gamble are altering course to reflect changing budgets.

Flight Cancellations Pile Up Ahead of Holiday Weekend
Airlines are facing weather-related disruptions and grappling with staffing shortages as the Memorial Day holiday presents carriers with a first test in the run-up to an expected summer travel boom.

China Smartphone Demand Weakens Amid Covid Resurgence
From Apple to chip makers, companies warn of fewer shipments and weaker consumer spending in the world?s biggest smartphone market.

Household Spending Rise Leans on Savings
U.S. households boosted spending for a fourth straight month in April, but the savings rate fell to the lowest in 14 years, suggesting many Americans are tapping savings to offset cost increases from inflation.

Inflation Eased Slightly in April, According to Fed's Preferred Measure
Consumer prices rose 6.3% in April from a year earlier, down from 6.6% in March, as measured by the Commerce Department?s personal-consumption expenditures price index, but remained near a four-decade high.

BRE #:00619059
Charles Elfsten, President
Charles A. Elfsten
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