Introduction to Real Estate

DEFINING REAL ESTATE 

Real Estate is defined as a land along with any permanent improvements attached to the land, whether natural or man-made including water, trees, minerals, buildings, homes, fences, and bridges. It is also a form of Real property and is different from Personal Property where things are not permanently attached to the land. (E.g. Car, Tables, Toys, etc.) 

5 Main Categories of Real Estate 

• Residential Real Estate

• Commercial Real Estate 

• industrial Real Estate 

• Raw Land 

• Special Use 

Residential Real Estate 

Any property used for residential purposes, this includes both new construction and resale homes. The most common category is single-family homes. There are also condominiums, co-ops, townhouses, duplexes, triple-deckers, quadplexes, high-value homes, multi-generational and vacation homes. 

Commercial Real Estate 

Any property used exclusively for business purposes, such as apartment complexes, gas stations, grocery stores, hospitals, hotels, offices, parking facilities, restaurants, shopping centers, stores, and theaters. Apartment buildings are often considered commercial, even though they are used for residences. That's because they are owned to produce income. 

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 commercial real estate. The classification is important because the zoning, construction, and sales are handled differently. 

Land 

This includes vacant land, working farms, and ranches. The subcategories within vacant land include undeveloped, early development or reuse, subdivision and site assembly. 

Special Purpose 

Property used by the public, such as cemeteries, government buildings, libraries, parks, places of worship, and schools. 

3 Physical Characteristics of Real Estate 

• Immobility 

• Indestructibility

 • Uniqueness 

5 MOST COMMON REAL ESTATE LEGAL RIGHTS 

• Right of Possession
        Right to own the property 

• Right of Control 
        Right to use the property as you please. 

• Right of Exclusion 
        Right to keep others out of your property. 

• Right of Enjoyment 
        Right to enjoy all the amenities or features of your property. 

• Right of Disposition 
        Right to sell the property. 

REAL ESTATE TERMS & DEFINITIONS 

BUYER'S AGENT 

• Represents the buyer. • Schedules showings • Alerts the buyer to homes on the market that match their needs. • Will advise clients on an appropriate price to offer and present it to the seller's agent. 

SELLER'S AGENT 

• a.k.a. Listing Agent • Represents the seller • Markets the property to different portals. • Presents potential buyers. 

ESCROW 

• is a contractual arrangement in which a third party receives and disburses money or documents for the primary transacting parties, with the disbursement dependent on conditions agreed to by the transacting parties, or an account established by a broker for holding funds on behalf of the broker's principal or some other person until the consummation or termination of a transaction. 

PRE-QUALIFICATION 

• Dry run of the loan application process. • Only takes minutes to an hour and can be done over the phone. 

PRE-APPROVAL 

• The loan application process itself. • Verification of details is done. • Borrower can be charged for additional fees for the verification of credit reports and such. 

RESIDENTIAL PURCHASE AGREEMENT ( RPA)

• Real Estate Purchase Agreement (RPM • A document which specifies the details of the purchase and the property. 

FORECLOSURE

• Process of taking possession of a property when a mortgage has defaulted.

EARNEST MONEY DEPOSIT

• A security deposit made to the seller showing the buyer's good faith in the transaction.. 

LEADS

• A prospective consumer of a product or service. 

TITLE 

• Refers to your legal ownership of a home or property. • Refers to a "bundle of tights" to a property that gets transferred from seller to buyer. 

DEED 

• A document that conveys the title to the new owner when you sell your home. 

HOME INSURANCE 

• An optional service that the buyer can purchase from a Home Insurance Company. 

• Home Insurance covers damages to the property that's caused by natural disasters. 

HOME WARRANTY 

• Sellers are required to issue a home warranty to the buyer after a successful purchase. 

• Home warranty covers damages to the property that are not caused by natl.). 

• The cost of the repairs are shouldered by the Seller. 

Real Estate Agent vs. Broker vs. Realtor 

Real Estate Agent 

• Individuals who ate ii=esaii i= toy. sell S rent real es:ale • Responsible for bringing buyers s sellers together and are paid a commission. • This commission is typically a percentage of the property's sale price. • They cannot work individually and must be operating their services under a brokerage firm. 

Broker 

• They are also Real Estate Agents however, they have completed/continued their education and has successfully received a State Real Estate Broker license. • Brokers can work independently or own a brokerage firm and hire real estate agents. • Brokers earn money by taking a share of the commissions by the real estate agents who work under them. 

Realtor 

• Is a licensed Real Estate Agent or Broker who is a member of the National Association of Realtors (NAB) • licensed to use the Realtor Trademark as pan of their name.