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Real estate
Real estate or immovable property is a legal term (in some jurisdictions)
that encompasses land along with anything permanently affixed to the land,
such as buildings. Real estate (immovable property) is often considered
synonymous with real property (also sometimes called realty), in contrast
with personal property (also sometimes called chattel or personalty).
However, for technical purposes, some people prefer to distinguish real
estate, referring to the land and fixtures themselves, from real property,
referring to ownership rights over real estate.
The terms real estate and real property are used primarily in common law,
while civil law jurisdictions refer instead to immovable property.
In law, the word real means relating to a thing (from Latin res/rei, 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 word is not derived from the notion of land having historically been
"royal" property. The word royal — and its Castilian cognate real — come
from the related Latin word rex-regis, meaning king.)
British, French and Italian usages of the term
In British usage, however, “real property”, often shortened to just
“property”, refers rather to land and fixtures as such 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.[1]
In French, Italian and Spanish, real estate is called "immovables" (immobilier
in French, immobili in Italian and inmueble in Spanish); other property is
called "movables" (mobilier and mueble).
Business sector
With the development of private property ownership, real estate has become a
major area of business. 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 - Assisting buyers and sellers in transactions
* Development - Improving land for use by adding or replacing buildings
* Property management - Managing a property for its owner(s)
* Real Estate Marketing - Managing the sales side of the property business
* Relocation services - Relocating people or business to a different country
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.
"Internet Real Estate" is a term coined by the internet investment community
relating to the parallel that exists between high quality internet domain
names and real-world, prime real estate. Many internet companies actually
use the address of properties as domain names.
Levels
According to The Economist, "developed economies'" assets at the end of 2002
was
* Residential property: $48 trillion
* Commercial property: $14 trillion
* Equities: $20 trillion
* Government bonds: $20 trillion
* Corporate bonds: $13 trillion
* Total: $115 trillion
That makes real estate assets 54% and financial assets 46% of total stocks,
bonds, and real estate assets. Assets not counted here are bank deposits,
insurance "reserve" assets, and human assets; also it is not clear if all
debt and equity investments are counted in the categories equities and
bonds. For US asset levels see FRB: Z.1 Release-- Flow of Funds Accounts of
the United States.
Mortgages in real estate
In recent years, many economists have recognized that the lack of effective
real estate laws can be a significant barrier to investment in many
developing countries. In most societies, rich or poor, a significant
fraction of the total wealth is in the form of land and buildings. In most
advanced economies, the main source of capital used by individuals and small
companies to purchase and improve land and buildings is mortgage loans
--bank loans for which the real property itself constitutes collateral.
Banks are willing to make such loans at favorable rates in large part
because, if the borrower does not make payments, the lender can foreclose by
filing a court action that lets them take back the property and sell it to
get their money back. But in many developing countries there is no effective
means by which a lender could foreclose, so the mortgage loan industry, as
such, either does not exist at all or is only available to members of
privileged social classes.
Real estate in Mexico and Central America
Real estate in Mexico and Central America is different from the way that it
is 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 monies in order to smoothly make the exchange between the
parties. However, it is thought that there are plenty of possible
scams.
Prices are often much cheaper than most areas of the U.S., but in many
locations prices of houses and lots are the similar, one example being
Mexico City. U.S. banks have begun to give home loans for properties in
Mexico, but, so far, not for other Central American countries.
One important difference from the United States is that each country has
rules regarding where foreigners can buy. For example, in Mexico, they
cannot buy land or homes within 50km of the coast or 100km from a border,
while, in Honduras, they may buy beach front property. There are also
different special rules regarding certain types of property: ejidos -
communally held farm property - cannot be sold to anyone, but that does not
prevent them from being offered for sale.
Many websites advertising and selling Mexican and Central American real
estate exist, but some may be scams and careful research can help to them.
References
1. ^ Oxford Dictionary of Law (4th edition), New York: Oxford University
Press, 1997; See also Estate in land
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