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
French, real estate is called immeubles ("immovables"); other property is called
meubles ("movables" Italian is similar: in The Godfather Part III, former
mobster Michael Corleone acquires control of a fictional real-estate investment
firm called "International Immobiliari", which is also called "the world's
largest landlord.")
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 mortgages -- 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, that is, file a court action that lets them take 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.
In law, the word real means relating to a thing (from Latin res, matter or
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
unrelated Latin word rex, meaning king.)
[edit] Financial Viability
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 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.
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