We use the term Real Estate in our daily lives, we hear it all the time but not that many people know its true meaning, the right definition of Real Estate.
If you want to be a savvy investor, you should be able to explain its meaning with no hesitation.
What is Real Estate?
Real estate by definition is the land, the buildings on the land, and everything affixed to the land such as houses, buildings, landscaping, fencing, wells, etc. Also, its natural resources such as such as crops, minerals, and water.
On the business aspect of the real estate industry is the profession of buying, selling, or renting land, buildings or housing.
Another aspect to remember and pay attention to is not confusing the terms of Real Property and Real Estate
Real Estate vs Personal Property
Sometimes those terms are not use properly use when when buying and selling real estate. So understand the difference is important.
The personal property is not part of real estate.
Just to keep it in simple words, when you are selling real estate, all the fixtures of the house, fences, trees, wells, utilities and all other item attached to the land or the house belongs to the property and needs to stay unless agreed on the contract.
On the other hand, the furniture, cars, jewelry are examples of personal property rather than the real estate.
To use a simple rule of Thumb, If you need to use a tool to remove it from the property, those items are part of the property
Some Other Terms to Know or Get Familiar With
- Title: A legal term describing who officially owns the real estate property.
- Mortgage: A loan that covers the price of a house.
- Foreclosure: The process by which the lender takes control of a house if the owner fails to pay back the mortgage.
- Closing: The meeting in which ownership of real estate is officially transferred between a seller and a buyer.
- Escrow: Money or property held by a third, disinterested party for safekeeping, this is generally Taxes and insurance
- Real Estate Agent: A professional licensed to negotiate and conduct real estate transactions. This person needs a state license and is an intermediate between the sellers and buyers.
What is Real Estate? By now, you can see is not complicated. You can have a normal conversation and be able to understand what real estate is all about.