What is Real Estate?
Of all the things you learn in school – history, math, science, literature – many people make it all the way through college before learning anything tangible about real estate, home ownership, or This is especially true since a majority of young adults make it through college while living at their parents’ home, on campus, maybe renting an apartment or house, but not really delving deep into the ups and downs of the property management industry. In the simplest terms, real estate is phrase that refers to the buying and selling of property rights. This can include ownership, temporary or indefinite, of not just the building itself but the air, land, even underground space. If a property is not owned by an individual, they can purchase permission from the owner of the property to live there for a temporary or extended period of time through the processes of renting or leasing.
The different types of property that the real estate market deals in can be classified into four different categories. Residential real estate includes the construction, maintenance, and reselling of homes. Most people tend to think of single-family houses, but this type of real estate includes townhouses, apartments, condominiums, multi-family houses, and even vacation homes. Almost the complete opposite of this is vacant land real estate, which includes working farms, ranches, and other undeveloped lots and plots of land.
Next, commercial real estate refers to buildings including strip malls, hotels, office buildings, shopping centers, and similar. Some agencies consider apartment complexes commercial, since they are mostly operated for the purpose of generating a profit, even though they are residential buildings. On a similar note to commercial real estate is industrial real estate, which operates mainly in the manufacturing of buildings and property such as warehouses, factories, and research centers. However, sometimes buildings that produce and distribute goods are considered commercial, so it can be difficult sometimes to keep track of where the lines are blurred.
Now that you know a bit more about the different areas of real estate, how exactly does this industry work? Simply put, it’s all about the production and trade of property. Real estate plays a huge role in local and national economies, since everybody has to live somewhere. Let’s focus on the production of real estate: construction of new buildings plays a huge role in the industry, since public buildings such as offices, hospitals, and schools are nearly always funded in some respect by taxpayers’ dollars. The building of new homes is a huge driving factor in this aspect. The average single-family home takes between six months and a year to build from scratch, so many people use this number to predict how well the market will be doing that many months in the future. For instance, if the sale count of new homes has been especially high or low, the pattern can be traced into the future.
When it comes to the trade of real estate property, there is a wide variety of individuals who are trained to help out during this process. The typical real estate agent is a person who assists businesses, homeowners, and investors gauge the market and figure out what is the best move to make at a certain time, whether it is buying a home, selling a home, investing in the construction of a certain building, or something else. Real estate agents typically specialize in one of the four types of real estate that were discussed in detail earlier. They focus on keeping their client as satisfied as possible, saving them as much money or turning the highest profit possible while handling the legalities and formalities of the interaction.
Sellers’ agents help property owners find clients through networking, professional contact, or some other channel of connection. Whether a property owner is looking to sell the entire building or just a rent out part of their home, sellers’ agents are the ones who assist in communication with potential buyers or tenants. A sellers’ agent will tell you how best to increase the value of property and how to attract a large crowd of interested residents or buyers. Sellers’ agents are usually well-versed in the local market and can advise you in areas tailored to a certain audience, whether you are selling a commercial building or selling a single-family home.
On the other side of the coin are buyers’ agents, who know where to look in the market to find the best building that will suit the needs and preferences of the buyer. Where sellers’ agents look to make a profit for their client, buyers’ agents try to keep things as affordable as possible for their client. The two play an important role in negotiating and communicating so that a compromise can be reached where both parties feel satisfied. For example, a buyers’ agent will voice reasons as to why the value of a home should be higher or lower based on what the sellers’ agent is saying.