Real estate is simply, as suggested by the title real or physical property. It is a real piece of land that you own, trade or buy. Real estate is also sometimes referred to simply as the business which includes buying, selling and renting out property.
There are 4 types of properties in real estate. Residential, commercial, industrial and land. It is important to segregate these properties in such a manner because the value of all these properties is decided differently. There are different procedures to buy and sell such properties and the tax levied on them also changes.
Even the area to construct these properties is allocated with a lot of thought. For example, you can not build industrial units near residential areas due to risks of chemical waste exposure to the residents. Apart from these, there are many other such factors that make it paramount to segregate these properties.
Let’s have a look at these four types of properties in detail.
Residential properties are different types of homes that people live in. In the olden times, the residential properties were not of many kinds. There were mostly single and double story houses with varying sizes. With the onset of technology and deep study into architecture, the concepts of the apartment buildings or condominiums came into being. These gained a lot of popularity in populated cities due to their ability to house a number of families on a small patch of land.
Apart from condominiums, there are also villas, townhouses, duplexes, holiday homes and so on that are included in residential real estate.
Commercial properties, as the name suggests, are the properties that generate income. Commercial properties play a major role in businesses and contribute a lot to the GDP of a nation. The common examples of commercial properties are school buildings, colleges, markets, malls, office buildings, petrol pumps and so on.
Apartment projects are also considered to be commercial real estate as the main purpose of building these multistory buildings is to generate income.
Industrial properties are the buildings that are used for industrial processes. These can be factories, warehouses, cold storages, greenhouse buildings and so on.
As mentioned before, the industrial properties have to be very carefully placed and allotted. These need to be built at a safe distance from homes and other types of properties because many such industries work with a lot of hazardous chemicals which can cause a lot of trouble to the residents and the general public.
This is perhaps the simplest form of real estate and also the most complex. That is due to the fact that whatever we build, we build on the land. Buying land would be the easiest transaction in this field but the complexities arise when the uses of the land have to be decided.
A lot of choices and variables come into play when we set out to decide exactly how we are going to use the land.
The real estate industry is based on the concept of buying, selling and dealing with different kinds of property. This industry has evolved a lot since the past few decades. The fast pace of growth of the industry has forced it to become quite complex and formal. It has a major share of 6% in the G.D.P. of the United States.
Let’s have a look at some processes of the dealings in real estate and how it actually works
At some point in your life, you might have some property that you would want to sell or buy. The property can be of any sort. We have already looked at the different kinds of properties that we can deal with. Though the most common ones are houses, offices, showrooms, apartments, plots, school buildings, warehouses, and others. Once we set our aim on buying or selling or renting, we can advance to the next step of finding a real estate agent who would take us through the complexities of paperwork and finding interested parties.
Real estate agents or property dealers are the middle link between a buyer and a seller. Ideally, one agent should be representing a seller and the other, the buyer. Sometimes an agent might be representing both the parties and his interests may be inclined towards one of the parties. Most countries do not approve of dual agents but it is still accepted since a lot depends on trust from both sides. “Finding trusted real estate agents is the key” as quoted by experts at NomadicRealEstate.com , as the agents are responsible for transparency and efficiency in the business. In fact, since real estate started spreading its wings through the internet, the industry has seen a major rise in terms of business growth.
Let us look at the working of a real estate agent in detail.
A property dealer who is from the seller’s side is supposed to list the property on the market through different mediums and is thus sometimes called a lister. The agent should also know how to calculate the value of your house, give tax breakdowns and make various suggestions that would benefit the client. Also, he has to make sure that the client has paperwork of the property in order. Mostly the agents offer to handle all the paperwork.
The agent from the buyer’s end has the responsibility of finding the desired property for his client from all the various listings that are available to him. He is also responsible for making sure that the documents of the other party are absolutely genuine. This agent too, like the one from the seller’s side, needs to have knowledge of the current rates and value of different properties.
Once the two parties meet, they start negotiating the price of the property in question. The negotiations are usually handled by the property dealers. Once the paperwork is all in order and the price is set, the deal stands closed. Whatever money that needs to be exchanged is exchanged at this moment.
Mostly at the closing of the deal, the agents are paid some percentage of the final price of the property. This exchange of money gets taxed by the government and all this flow of money helps the G.D.P. of the nation.
Real estate is definitely here to stay. They say that even air regenerates but what surely will not regenerate is the land that we have. We have a fixed amount of land at our disposal and the people will never stop investing in it. We will always need houses to stay in. The cost of land and properties will only increase as the population grows.
With the support of the growing technology, it will be even easier in the future to deal with real estate. Buying and selling a property will become easier. Technology will also enable us to build structures faster and deliver projects at a quicker rate. Villages and towns will start seeing development brought about by real estate. Infrastructure will touch the lives of the unfortunate and will surely improve their situation.
We do witness slumps in the market from time to time but the slump is never there to stay. The market rises up ever stronger, each time.
All in all the future of real estate is bright as ever. Our basic needs for shelter and safety will ensure that.
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