The Ultimate Real Estate Glossary: Letter i
Almost any industry comes with its own language, and when you’re a newcomer, it can all seem pretty opaque. Real estate is no exception.
You might feel a little overwhelmed if you’re just starting out as a landlord, but don’t worry. The Ultimate Real Estate Glossary has your back. Once you’ve familiarized yourself with all the terms in this series, you’ll be able to navigate investor networking events and meetings with mortgage brokers like a seasoned pro.
For this edition, we’ll go through the real estate terms that start with the letter I.
Real estate terms: The letter I
IDX (Internet Data Exchange): An agreement between agents and brokers to display listing data on websites for public display. IDX allows brokers to display each others’ property listings on participating websites. This permits brokers to increase their reach and get listings in front of more buyers’ eyes.
Inclusions: A non-permanent, removable item that will stay with a real estate property after a sale. The seller agrees on what the inclusions are in the real estate contract and leaves them behind for the future buyer. Typical inclusions are appliances like washing machines or ovens, as well as furniture.
Independent contractor: A real estate agent who is supervised by a broker, but otherwise maintains control over their own business functions. The agent has an office at the brokerage, but otherwise sets their own schedule and performs their own accounting. Independent contractors receive no salary or benefits from their associated broker.
Inputting: The process of entering the data for new listings, or making changes to existing listings, on an MLS.
Inspection: The process of assessing a property’s material condition, undertaken by a qualified inspector. Generally done after the buyer and seller sign a purchase agreement.
The purpose of a property inspection is to ascertain the house’s condition from foundation to roof to ensure that all the house features meet relevant codes. Sellers can use an inspection report to make any necessary repairs or upgrades before putting their house on the market, while buyers can go in with a better picture of the house’s condition.
Inspection rider: An additional clause added to a purchase offer. Should an inspection reveal any problems with the house, the inspection rider permits the buyer to cancel the sale or negotiate repairs. The contract to purchase is not considered binding until the inspection rider is fulfilled.
Inspection riders protect the buyer, though sellers may sometimes find it difficult to comply with them.
Installment land contract: A form of contract. When executing an installment land contract, the buyer gets access to the property, but the seller retains the title. The buyer pays the purchase price and interest in installments over time to the seller. When the buyer has paid the complete purchase price, the seller turns over the title to the buyer.
Interest: The amount charged by a lender for loaning money. Interest rates are usually expressed as APR and are typically encountered when taking out a mortgage. Monthly mortgage payments pay off both the principal amount and the interest accrued on it.
Interest rate float: A borrower may choose to float or lock their loan based on trends in the interest rate. Choosing to float means that the rate is subject to market fluctuations, and thus the rate may rise or fall. This will affect the borrower’s monthly payments accordingly.
Interest rate lock: An option available at the time of filing a loan application. If a borrower chooses to lock, they will receive the rate that was active at the time of their loan application. Without a lock, the borrower would receive the rate that applies at the time the loan was approved, which may be higher than at the time they first applied.
Inventory: In real estate, the number of properties not yet sold, and therefore are available on a listing platform or are being offered by a particular brokerage or agent.
Investing: Spending money with the expectation of creating profit at a later time. For example, purchasing property so that it can be resold at a higher price in the future.
Investment Property: Real estate property purchased to make a profit. This profit may be from collecting rent on the property after a tenant takes up residence, or from capital appreciation and later resale, or both.
All the patience you’ve put into learning these real estate terms will pay off, so don’t give up! The glossary will be here for you when you need it.
Check back on our site regularly for our upcoming installments, because we’re not stopping until we finish with Z.
Have any terms that we’ve missed? Comment them down below so we can cover them too!
Image courtesy of David Mcbee