Business and Real Estate can be defined as the close inter-relations between the two disciplines of real estate and business studies. While business activity is related with any productive activity carried out for the generation of income, real estate is defined as land and everything permanently attached to it such as buildings. Real estate is basically defined as immovable properties and is often called realty or real property. Permanent fixtures to land other than buildings can be fencing to the buildings and other things attached to the buildings such as plumbing, heating and lighting fixtures. Property that is not affixed to the land is regarded as personal property and is sometimes called chattels. These will include clothing, furniture and money. The fundamental difference between personal and real property is that title is transferred along with the land whereas an individual can retain title to the movable property even after the transfer is made.
Technically speaking, the distinction between real estate and real property is getting blurred by the day as real estate now encompasses not only the land and fixtures to the land themselves, but is also used to mean the ownership rights over the real estate. Real property previously meant the ownership rights over the real estate. The terms real estate, real property and immovable property is now used synonymously in jurisprudence.
In economics, business is defined as the social science of organizing and managing people to maintain collective productivity directed towards the accomplishment of particular goals, which can be productive or creative but is usually aimed for reaping profits. Single usage of the term business refers to a company or corporation, while in generalized terms it is used to refer to a particular market sector. Examples of this would be the computer business or the business community which can be defined as the community of suppliers of goods and services. Types of businesses would be sole proprietorships, partnerships, private limited and public limited companies.
The basic interaction between the two streams of disciplines of business and real estate and can be theorized by attaching a business model to real estate. A business model is the theory and basic plan and the required structure for operating a business. Business plan models are dependent on how the owners want to operate the business based on the tastes and preferences of the targeted customers. In this case, real estate business models include independent brokers, franchisees, associate brokers and the buying agency. The aspect of earning profits for the business and a rise in the personal wealth of the owners of the business is the basic premise of treating real estate as a business activity. Real estate business can be both small and large real estate business. Like all other businesses, persons operating in the real estate business also have to undertake risks-that is the investment of work and money without the certainty of success. However, some businesses such as cooperatives, government agencies and non-profit organizations do not always operate with the motive of reaping profits.
Real estate business is a form of investment as capital gains can be realized from its resale. Unlike other investments, real estate is dramatically affected by the condition of the surrounding area where the property is located. The position of the agent or broker facilitating the deal between the buyer and the seller is a fiduciary capacity and acts in the best interest if the client who can confide in him about his personal information. In a fiduciary capacity, it is the duty of the agent or broker to protect the clients' information, unless otherwise required by a court of law. Brokers have the primary responsibility of getting the assessors or appraisers and surveyors to obtain the proper value of the property or real estate and the mortgage broker finally gets the two parties of the buyers and sellers to ink the deal.
The persons engaged with the ownership and use transfers of the real or physical property can be summarized as :-
- Accountants
- Appraisers
- Mortgage brokers
- Counselors
- Brokers
- Surveyors
- Title companies