What Is Real Estate? Types Of Real Estate – Details. Real estate refers to real, or physical, property, and can include land, buildings, air rights above the land, and underground rights below the land. As a business term, real estate also refers to producing, buying, and selling property.
How Real Estate Works
Real estate affects the U.S. economy because it’s a critical driver of economic growth. For individuals and businesses, it can be seen as an investment or merely a purchase to meet the buyer’s or the company’s needs.
Sometimes referred to as “real property,” real estate is technically land plus any other tangible improvement that might rest upon it or be installed in it. The improvement might be a building that’s been erected there or a roadway. It can be something that’s been inserted into the ground, such as a septic system. Land with any of these structures is said to be “improved.” It’s “unimproved” when it lacks them.
Real estate involves numerous facets. It can segue from unimproved to improved. It can be purchased or sold. It might be owned by a government, a corporate entity, or by a private party. Certain components can directly impact the economy, such as consistent improvement of land and the individuals or entities that facilitate those transfers of ownership.
Real Estate Agents
Real estate agents assist individuals, businesses, and investors in buying and selling properties. The industry is typically divided up into specialties.
Sellers or listing agents help find buyers through the Multiple Listing Service or their professional contacts. They price your property, using listings of recently sold homes known as “comparables,” or “comps,” because they’re similar to yours. They can help you spruce up your property so it looks its best to potential buyers. They assist in negotiations with the buyer or the buyer’s agent to get the highest price possible.
Buyers’ agents provide similar services for the home purchaser. They know the local market, so they can find a property that meets your most important criteria. They also compare prices, a process that’s referred to as “doing comps.” This helps them guide you to areas that are affordable. Buyers’ agents negotiate for you, pointing out reasons why the seller should accept a lower price. They can help with the legalities of the process, including title search, inspection, and financing.
Types of Real Estate
There are four types of real estate.
Residential Real Estate
Residential real estate includes both new construction and resale homes. The most common category is single-family homes, but there are also condominiums, co-ops, townhouses, duplexes, triple-deckers, quadplexes, high-value homes, multi-generational homes, and vacation homes.
Commercial Real Estate
Commercial real estate includes shopping centers and strip malls, medical buildings, educational buildings, hotels, and offices. Apartment buildings are often considered commercial, even though they’re used for residences because they’re owned to produce income.
Industrial Real Estate
Industrial real estate includes manufacturing buildings and property, as well as warehouses. The buildings can be used for research, production, storage, and distribution of goods. Some buildings that distribute goods are considered to be commercial real estate. The classification is important because zoning, construction, and sales can be handled differently for this type of property.
Land includes vacant lots, working farms, and ranches. The subcategories within vacant land include undeveloped, early development or reuse, subdivision, and site assembly.