Real estate is a legal term 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 that also includes things such as commercial and residential real property transactions. Real estate is often considered synonymous with real property, in contrast with personal property.

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.

Real Estate and Business

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 two parties

* Development – Improving land for use by adding or replacing building

* Net Lease- When the tenant pays, in addition to rent, some or all of the property expenses which normally would be paid by the property owner

* Property Management – Managing a property for its owner

* 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

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.

Residential Real Estate

The size of an apartment or house can be described in square feet or meters. In the United States, this includes the area of ‘living space’, excluding the garage and other non-living spaces. The “square meters” figure of a house in Europe may report the total area of the walls enclosing the home, thus including any attached garage and non-living spaces, which makes it important to inquire what kind of surface definition has been used.

It can be described more roughly by the number of rooms. A studio apartment has a single bedroom with no living room (possibly a separate kitchen). A one-bedroom apartment has a living or dining room separate from the bedroom. Two bedroom, three bedroom, and larger units are common.

Mortgages

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 and 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 (or other instruments). These are 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 which allows them to take back the property and sell it to get their money back. For investors, profitability can be enhanced by using an off plan or pre-construction strategy to purchase at a lower price which is often the case in the pre-construction phase of development.

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.