Real estate is a legal term (in some jurisdictions, such as the United Kingdom, Canada, Australia, USA and The Bahamas) that encompasses land along with improvements to the land, such as buildings, fences, wells and other site improvements that are fixed in location—immovable. Real estate law is the body of regulations and legal codes which pertain to such matters under a particular jurisdiction and include things such as commercial and residential real property transactions. Real estate is often considered synonymous with real property (sometimes called realty), in contrast with personal property (sometimes called chattel or personalty under chattel law or personal property law).
However, in some situations the term "real estate" refers to the land and fixtures together, as distinguished from "real property", referring to ownership of land and appurtenances, including anything of a permanent nature such as structures, trees, minerals, and the interest, benefits, and inherent rights thereof. Real property is typically considered to be Immovable property. The terms real estate and real property are used primarily in common law, while civil law jurisdictions refer instead to immovable property.
Etymology
In law, the word real means relating to a thing (res/rei, thing, from O.Fr. reel, from L.L. realis "actual," from Latin. res, "matter, thing"), as distinguished from a person. Thus the law broadly distinguishes between "real" property (land and anything affixed to it) and "personal" property (everything else, e.g., clothing, furniture, money). The conceptual difference was between immovable property, which would transfer title along with the land, and movable property, which a person would retain title to. The oldest use of the term "Real Estate" that has been preserved in historical records was in 1666. This use of "real" also reflects the ancient and feudal preference for land, and the ownership (and owners) thereof.
Some people have claimed that the word real in this sense is descended (like French royal and Spanish real) from the Latin word for 'king'. In the feudal system (which has left many traces in the common law) the king was the owner of all land, and everyone who occupied land paid him rent directly or indirectly (through lords who in turn paid the king), in cash, goods or services (including military service). Property tax, paid to the state, can be seen as a relic of that system, as is the term fee simple. However, this derivation of real is a misconception.
Real estate as "real property" in the U.K.
In British usage, “real property”, often shortened to just “property”, generally refers to land and fixtures, while the term “real estate” is used mostly in the context of probate law, and means all interests in land held by a deceased person at death, excluding interests in money arising under a trust for sale of or charged on land.
Real estate in Mexico and Central America
The real estate businesses in Mexico and Central America are different from the way that they are conducted in the United States.
Some similarities include a variety of legal formalities (with professionals such as real estate agents generally employed to assist the buyer); taxes need to be paid (but typically less than those in U.S.); legal paperwork will ensure title; and a neutral party such as a title company will handle documentation and money in order to make the smooth exchange between the parties. Increasingly, U.S. title companies are doing work for U.S. buyers in Mexico and Central America.
Prices are often much cheaper than most areas of the U.S., but in many locations, prices of houses and lots are as expensive as the U.S., one example being Mexico City. U.S. banks have begun to give home loans for properties in Mexico, but, so far, not for other Latin American countries.
One important difference from the United States is that each country has rules regarding where foreigners can buy. For example, in Mexico, foreigners cannot buy land or homes within 50 km of the coast or 100 km from a border unless they hold title in a Mexican Corporation or a Fideicomiso (a Mexican trust).[6] In Honduras, however, they may buy beach front property directly in their name. There are different rules regarding certain types of property: ejidal land – communally held farm property – can only be sold after a lengthy entitlement process, but that does not prevent them from being offered for sale.
In Costa Rica, real estate agents do not need a license to operate, but the transfer of property requires a lawyer.
Business sector
With the development of private property ownership, real estate has become a major area of business, commonly referred to as commercial real estate. Purchasing real estate requires a significant investment, and each parcel of land has unique characteristics, so the real estate industry has evolved into several distinct fields. Specialists are often called on to valuate real estate and facilitate transactions. Some kinds of real estate businesses include:
* Appraisal: Professional valuation services
* Brokerages: A fee charged by the mediator who facilitates a real estate transaction between the two parties.
* Development: Improving land for use by adding or replacing buildings
* Net lease
* Property management: Managing a property for its owner(s)
* Real estate marketing: Managing the sales side of the property business
* Real estate investing: Managing the investment of real estate
* Relocation services: Relocating people or business to a different country
* Corporate Real Estate: Managing the real estate held by a corporation to support its core business—unlike
managing the real estate held by an investor to generate income
Within each field, a business may specialize in a particular type of real estate, such as residential, commercial, or industrial property. In addition, almost all construction business effectively has a connection to real estate.
Professional university-level education in real estate is primarily focused at the graduate level. Focus in towards the commercial real estate sector, primarily real estate development or investment rather than residential real estate sales conducted by a REALTOR.
