Real Estate Economics
Real Estate EconomicsIntroduction to Real Estate
Real Estate is, by definition, the land and everything that
is a part of it and the extent of one’s interest in it. The
word real in real estate stands for the fact that it is land
and different than personal property. It is real property,
property that is more or less immobile. The word estate in
real estate stands for the interest that one has in the
property. This definitions shows that real estate is a
different sort of property. It is property that may be
legally yours but it is still not your personal property.
Real Estate is land and property that can be acquired,
owned or transferred by both individuals and business.
There are rules and regulations to follow when performing
any one of those actions. These rules and regulations
become very important when discussing the balance in real
estate. But what is real estate? Real estate is the
process of purchasing real property and the problems and
steps that one must follow through with.
Elements of Real Estate
I.Home
When buying a new house there are many things that must be
solved before the deed can be signed to the proud new owner.
Page 2
Very few people have the financial means of making a
one-time full payment on a home. The price of living has
increased and so has the prices for homes. For many, the
only outlet to buy the house of their dreams is to go and
find a mortgage to finance their home.
The first thing the prospective homeowner does is go to his
bank and try to find a loan that is large enough and has the
right interest rate that he can use to buy a house that he
wants and can afford. In order to get the loan the future
owner must establish credit. He will be asked about income,
employment history and credit history. All of these
variables allow the bank to determining whether or not this
person will ever fully pay for the mortgage. Once the
loanee has established credit for the loan the amount of
money paid on each payment and the amount of time allowed to
pay the payment is determined by the bank and must be agreed
to buy the loanee. Most of the time it is a monthly payment
and is between 15 to 35 years. The mortgage is made of two
parts. There is the interest and there is the principal.
The principal is the amount of the loan still owed and the
interest is the fee that the bank sets in order for its
money to be used. The interest is often the only variable
in mortgages and signals the difference in the two main kind
of mortgages. The fixed-rate mortgage and the
adjustable-rate mortgage. With fixed-rate mortgage the
Page 3
interest rate stays the same over the life of the loan.
With an adjustable-rate mortgage, the interest rate can
change at the end of pre-determined intervals. The interest
rate is based on the published index on the current interest
rates....
To view the complete essay, you be registered.