Continued from…
Real Estate Glossary I [Part 1]
Indoor air quality
When there are pollutants in the air inside a building. Tobacco smoke, biological contaminants, formaldehyde, carbon monoxide, organic gases (paint, solvents), radon, and asbestos are the main things that pollute the air inside.
As part of their due diligence when buying a commercial or industrial building, buyers should think about hiring outside experts to do air-quality surveys inside the building. The survey could include questionnaires for tenants and employees, ventilation studies, and sampling of certain contaminants.
When buildings are sealed to save energy, they can also keep in pollution. Indoor air quality problems are caused by things like buildings being used in a way that was not intended, old and dirty ductwork, new materials that give off formaldehyde fumes, and damp and dirty areas. Some experts call the problem “sick building syndrome,” and headaches, tiredness, and trouble breathing are some of the signs.
Inducement
Points in a lease or sales contract agreement that can be negotiated in the tenant’s/favor buyer’s and utilized to persuade them to sign the contract.
Industrial agent
A commercial real estate agent who specializes in listing, selling, and leasing industrial properties.
Industrial broker
A commercial real estate broker who focuses on industrial properties.
Industrial building
A structure built primarily for industrial and commercial purposes. A factory, assembly plant, warehouse, or other structure used for manufacturing and general business purposes.
Industrial development bond (IDB)
A bond issued by a municipal or state government to assist in the financing of an industrial plant or facility that will be leased to a private company.
Industrial district or park
A planned park-like complex that is intended to accommodate specialised industries. It is responsible for all public utilities, roadways, railroad sidings, and other infrastructure.
Industrial estate
A plot of land that has been subdivided for the purpose of industrial development.
Industrial gap
The gap between the need for and availability of industrial real estate in a particular market or region.
Industrial location decision-making
Site selection refers to the decision-making process in which potential sites for an industrial activity are researched and evaluated based on criteria such as their proximity to relevant resources and the level of competition in the market.
Industrial gap
The gap between the need for and availability of industrial real estate in a particular market or region.
Industrial location decision-making
Site selection refers to the decision-making process in which potential sites for an industrial activity are researched and evaluated based on criteria such as their proximity to relevant resources and the level of competition in the market.
Industrial park
A significant development over a vast region geared to the needs of business (such as water, roads, or landscaping)
A large area of land that has been made ready for a variety of light industrial and manufacturing jobs. Users can either buy or rent a site.
A business park is an area that is zoned for industrial use and has sites for many different businesses. It is developed and managed as a single unit, usually with common services for its users.
Usually, an industrial developer buys a large piece of land (usually between 400 and 500 acres), gets it zoned for industrial use, and builds roads, water and sewer systems, and other utilities. The developer then files a declaration of restrictions that sets up a property owners’ association and regulates things like setback lines, landscaping, architectural styles, and so on. The developer might sell a site to an industry that will build its own plant, or the developer might build the plant and rent it to the industry. When you buy a site in an industrial park, you can avoid the problems and costs that come with buying ready-made industrial property. You can also save money by sharing costs for sewers, security, utilities, and other things.
A designated area for industrial purposes.
A planned, park-like development that is designed to accommodate specific types of industry and includes all necessary amenities such as public utilities, streets, railroad sidings, water and sewerage facilities, and so on.
Industrial property
Warehouses and buildings that contain light manufacturing are included in this property categorization.
Real estate designated for industrial use, such as manufacturing or warehousing.
Industrial and manufacturing facilities and distribution centres are examples of commercial properties.
Zoned land suitable for the construction of factories, warehouses, and other industrial structures.
Industrial service area
The market segment that has enough qualified workers (or other resources) to sustain a particular type of manufacturing or other industrial endeavour.
Industry economies of scale
The development of an industry inside a community that results in unique resources and cost advantages for that business.
Inferential statistics
The process of forming conclusions based on evidence included in statistical data.
Inferior goods
Consumer items whose demand falls as buying power grows.
Infiltration
The gradual change of a neighbourhood as a result of people moving out or changing how the property is used. This is caused by changes in the economic, social, and physical forces in the area.
The movement of air from one place to another, as in the case of a draught coming from a crack, seam, or hole in a building.
Property Finance Made Easy
We specialise in Development funding | Commercial finance | Construction loans | Portfolio refinancing & Property investment loans in Australia.
Click Here to strategise with Amber
Infiltration capacity
The rate at which a surface substance absorbs water; measured in inches or centimetres per minute or hour.
Inflation
A rise in prices across the board, resulting in a reduction in buying power.
Inflation guard
An add-on to an insurance policy that automatically increases coverage by a certain amount each quarter for the life of the policy, based on what the insured chooses.
Inflation risk
The possibility that overall inflation in the economy may be higher or lower than projected.
The possibility of real estate losses as a result of changes in nominal rates.
Inflow
Consumers who live outside the trade region spend money on retail.
Information search costs
The expense of gathering relevant market data. High information search costs have a negative impact on market efficiency.
Informed consent
Consent to a certain act granted following complete and fair disclosure of all facts required to make an informed decision. Only individuals with sufficient reasoning abilities who understand the ramifications and long-term consequences of an activity can provide informed consent.
Infrared film
Photographic film that can capture near-infrared radiation Gusts that extend beyond the visible spectrum to a wavelength of 0.9 micrometres) but are incapable of capturing thermal infrared wavelengths.
Infrared image
A picture captured within a wavelength range of approximately 0. 7 millimetres to an undefined upper border, which is sometimes fixed at 2.6 millimetres. Photographic infrared ranges from 0.7 to 2.6 millimetres, whereas thermal infrared ranges from 2.6 to 13.5 millimetres.
Infrared radiation
Longwave radiation with wavelengths between 3.0 and 4.0 and 100 micrometres is the most common, although near-infrared radiation with wavelengths between 0.7 and 3.0-4.0 micrometres is also present.
Infrastructure
A municipality’s services and facilities include roads, highways, water, sewerage, emergency services, parks and recreation, and so on. This service is also available on a private basis.
The physical infrastructure of a city, including streets, highways, sewage and drainage systems, and other public services, is required to house a large number of people.
Infrastructure assets
Assets that usually have some or all of the following characteristics: (a) they are part of a system or network; (b) they are specialized and can’t be used for anything else; (c) they can’t be moved; and (d) there may be restrictions on how they can be sold.
Ingress
A way to get into a property. In contrast to egress.
An area that is used for both entering and exiting; the right to enter or leave.
Inheritance tax
A “death tax” is a fee that the state charges people who are going to inherit property. The tax is not put on the property itself. Instead, it is put on the heirs for their right to inherit the property. So, the rates or deductions may be different depending on how close the relationship is.
When a person dies, a statutory lien is usually put on all of the real property that person owned. This lien stays in place until the inheritance taxes are paid and a “tax clearance” is given. This is true even if the property was owned by two people with the right of the last person to own it.
Initial investment
The amount of money needed to purchase an investment.
Initial tax basis
A property’s tax basis at the time of acquisition. Cost + any further expenditures necessary to guarantee good and defensible title.
Initials
A short form of a name. Initials can work as a person’s signature as long as the person who signs them means for them to be the same as that person’s legal signature.
All parties to a contract should sign and date any changes to it. Most of the time, a notary must sign off on all changes made to a document. If they don’t, the document might not be accepted for recording. A safe way to sign a long document is for everyone to put their initials on each page. Some people do this on purpose.
In the more formal Torrens system of title registration, the recorder won’t usually accept a document for recording if the parties haven’t signed it with their full names; initials aren’t good enough. If an initial is the only part of a given name, or if a person doesn’t have a middle name, that should be written on the document. In the same way, the full name of the principal must usually be written on a power of attorney used to sign documents.
Injunction
A legal action in which a court issues a writ that either tells a defendant not to do something or forces the defendant to do something. With an injunction, the person to whom it is given is told to stop doing something, like breaking rules about pets in the deed or house rules. family apartment Look up granny flats.
Inner city
A neighbourhood that most people agree is the centre of a city’s residential or business life, even if it doesn’t have clear political, geographical, racial, or economic boundaries.
An older neighbourhood in a city near the core business sector.
Innocent misrepresentation
An unintentional misstatement of a material truth.
Innocent purchaser for value
One who buys real estate without being aware, either directly or indirectly, of any rights or interests that are more important than theirs. The purpose of state recording laws is to protect an innocent buyer from a previous buyer’s secret claims. Also known as a “true buyer for value.”
Input-output modeling
In economics, a mathematical model is a way to describe a local or national economy that explicitly accounts for the flows and links between different economic sectors. In order to analyze the direct and indirect effects of a change in a given sector or region, it is necessary to estimate sector- and region-specific multipliers, which take into account the fact that the output (products and services) of one sector may require the production inputs of other sectors.
Inquiry notice
Legal notice is what the law assumes when there are signs that would make a reasonable person want to find out more. For example, if someone is living in the property that is for sale, the buyer is expected to know everything that an inspection of the property would have shown. Buyers take title subject to the rights of the occupant.
INREV
The European Association for Non-Listed Real Estate Vehicles is a group of investors that invest in non-listed real estate vehicles.
Inside corner
Corner of a room where two walls meet to produce an internal angle.
Inside lot
Any lot between the front and back lots on a given block; inner lot.
Insider rights
The exclusive right to buy their flats for a limited time and usually at a discounted price are granted to tenants occupying a part of a building that is being converted into a coop or condo.
Inspection
An inspection of a certain location. Before signing the dotted line, a buyer should always check the property. An inspection is critical in determining if anybody else has a claim to the property, as possession of the property serves as constructive notice. Any encroachments or unregistered easements may also be discovered during an inspection. To ensure that any claims to prospective purchasers are accurate, a broker should conduct a thorough inspection of the advertised property.
The inclusion of a clause in the sales contract stating that all appliances, electrical fixtures, and plumbing fittings would be examined by the buyer before closing is common practice among real estate brokers. A few days before closing, the buyer is required to conduct this inspection. When an inspection condition is included in the contract, the escrow company will not close the transaction until it receives a letter from the buyer approving the inspection. Inspections are required by the FHA and VA prior to the acceptance of residential loans in order to verify that the buyer would not have to perform major repairs (such as wiring, roof, and the like) during the first year of ownership of the property. There are no inspection costs for purchasers, and sellers should know that they may have to make repairs before the VA approves their loan application.
Eases not recorded in the public records, building limitations, and improvements outside the declared lot borders may be found by a title insurance company’s inspector while preparing an owner policy for the property.
Residential landlords often have the authority to conduct inspections of leased properties provided proper notice has been given.
An examination of documentation or the physical features of a property.
Inspection period
A length of time during which a buyer examines the property and the documentation associated with a deal.
Inspector
Someone who does a thorough inspection of the property and gives a recommendation for repairs based on the findings.
Installment contract
A contract for the purchase of land.
Installment method gain
The difference between the gain on sale of a qualifying asset for installment method reporting and the recapture of accrued depreciation or cost recovery allowances. The installment approach can only be used to record this portion of the gain. The remaining must be recognised in the transaction’s taxable year.
Installment note
A promissory note that says the principal will be paid back in two or more exact amounts at different times.
You are missing out if you haven’t yet subscribed to our YouTube channel.
Installment sale
A way to report income tax gain from the sale of real estate when the price of the sale 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). In an installment sale, you don’t have to pay anything up front. Section 453 of the Internal Revenue Code no longer says that you have to pay the principal in two installments (i.e., the buyer could make a down payment of prepaid interest only, and a balloon payment of principal in a later year). If the seller helps pay for the purchase, this is called an installment sale. Some or all of the price must be paid within one or more tax years after the sale.
If certain conditions are met, taxpayers can save money on taxes by waiting to get an installment and report it as income until a later year when their other income may be lower. So, a taxpayer doesn’t have to pay all of the tax on the gain in the year that it is sold. For any tax year, a gain from an installment sale is counted for principal payments received during that year in the same proportion as the gross profit from the sale to the total “contract price.”
In addition to the cash received, the sales price also includes the market value of any property or notes received from the buyer, as well as any existing mortgage on the property, whether it was taken over by the buyer or not. The year of sale is the seller’s tax year, and the date of sale is the date the property title is transferred or, if there is a contract for deed, the date the property is taken possession of. Note that the installment method of reporting is used automatically for qualifying sales of real estate, but the taxpayer can choose not to use it. This can be done by putting the whole gain on the taxpayer’s tax return for the year. Principal payments that were agreed to before the tax changes in 1997 are taxed at the lower rates that were put in place.
Money received in the year of sale includes option money (even if it was paid in a previous year), down payment, payment of seller’s debt, excess of mortgage over basis, and subsequent principal payments. Most of the time, payments in the year of sale do not include mortgages that the buyer takes on. But if the mortgage is more than what the seller paid for the property, the difference is treated as a payment in the year of sale. Note that the rule only counts money that was paid toward the purchase price of the property. Interest is always taxed because it is not considered a payment on the purchase price but rather a payment for the right to delay all or part of the purchase price payment.
Because the seller can wait to get all or most of the profit until the rest of the purchase price is paid, the seller can accept a small cash down payment, which makes the market of possible buyers bigger. This may also make it possible for the seller to ask for a higher price. Also, the seller only pays income tax on the part of each installment payment that is profit. Only the part of the principal that represents gain is taxed. The part that represents the return of capital invested (basis) is not taxed. So, the seller keeps more of each payment, which he or she can use to make more investments. Interest is, of course, taxed just like any other income.
In an installment sale, there are three steps to figure out how much tax you have to pay:
-
Figure out how much of the transaction’s profit is taxable.
-
Figure out the seller’s total proceeds from the sale (the money that will be paid directly to the seller). Do not include proceeds to others, like a loan assumption, in this figure ( often called the contract price)
-
Figure out how much money you will make each year (the ratio of the total taxable gain to the total “contract price,” multiplied by the amount of cash received in that year)
For example, an investor sells a house for $135,000, takes a down payment of $40,500, and gives the buyer a purchase-money mortgage for $94,500, to be paid back over 20 years starting the next year. The investor makes a profit of $30,375 from the sale. So, the investor must count as a capital gain 22.5 percent of the down payment. This is the ratio between the $30,375 gain and the $135,000 contract price.
You can’t use the installment sale method to sell dealer real estate or personal property.
The profits of a sale are paid in installments over a certain length of time, allowing capital gains to be spread out over several years.
Purchase of a property in which a buyer pays the purchase price in instalments over time.
Installment sales contract
A contract that specifies the terms and conditions under which a seller is committed to provide conveyance deeds to the buyer at a later date. A land contract, contract for deed, or articles of agreement are other terms for the same thing.
Installment sales method
A technique of reporting sales to the IRS in which a part of the ensuing income tax burden is delayed if any of the funds from the sale are not received during the current taxable year.
Installments
Payments made on a debt on a regular basis.
Institutional investor purchases
Residential homes sold to non-lending businesses that acquired at least 10 properties in a year are referred to as institutional investor purchases.
Institutional lender
A financial institution, such as a bank, insurance business, savings and loan association, or any other lending institution whose loans are governed by law. In contrast to private lenders such as pension and trust funds or credit unions, which invest their own funds, such institutions invest depositors’ and customers’ money in mortgages. Mortgage brokers that operate as loan correspondents for out-of-state institutional lenders frequently represent institutional lenders. Because they are lending other people’s money, institutional lenders are strictly controlled by the government.
Institutional property
The same corporation owns and occupies an office building.
Institutional-grade real estate
Institutional investors, such as pension funds and international investors, prefer larger, more valuable commercial buildings worth more than $10 million. These investments are often concentrated in the 50 to 60 major metropolitan regions in the United States.
Instrument
A written legal contract that establishes the parties’ rights and duties.
A contract, deed, or will is a formal legal instrument. The phrase document is a broader term that refers to any paper that is used as the foundation, proof, or support for anything else. insulation Plasterboard, asbestos sheeting, compressed wood-wool, fiberboard, or other material put between inner and outer surfaces such as walls and ceilings to prevent heat loss. Air currents are broken up and dissipated by insulation.
Insulation
Any substance with a high heat transmission resistance that, when installed in a building’s walls, ceilings, or floors, reduces the flow rate of heat.
Non-conductive heat-resisting substance. It is applied to ceilings, floors, and walls in order to keep heat in the room.
A heat-resistant material that is put on the outside walls, the ceiling of the top floor, or the roof to stop heat or cold from getting in or out of the house. Also, the way a house is insulated.
Insulation board, rigid
Cane fibre or coarse-wood construction board in 12 and 25/32inch thickness. It’s available in a variety of sizes and densities, making it versatile.
Insulating glass
There is an air space between the two panes of glass in this window or door. Also referred to as a “dual glass.”
A door or window having a sealed air space between two panes of glass. Double-glazing is another name for this type of glass.
Insulation disclosure
The Federal Trade Commission has made it a rule that real estate agents, builders, and sellers of new houses must put information about the type, thickness, and R-value of the insulation in the house in the sales contract. In all listing and earnest money agreements, brokers also have to show the required facts.
Insurable interest
You have an insurable interest as soon as you sign a contract to buy a home, and it’s a good idea to cover it.
A right or interest in property that would result in monetary loss to the person who has that right or interest if the property were destroyed or damaged. As a result, an insurable interest would exist not just for the property owner or lessee, but also for any mortgagee or other lien creditors involved. To recover insurance policy damages, one must be able to demonstrate an insurable interest at the moment of loss.
Property that qualifies for insurance is referred to as “insurable interest.”
Insurable risk
The risk of loss from natural disasters such as fire, flood, and storm can be shifted to an insurance provider.
Insurable title
A title for which a title insurance company is willing to sell a policy.
A title that a title firm is willing to insure.
Insurable value
The monetary worth of the non-indestructible parts of a property.
Continued at…
