will explore these variables and in the process outline the basics and the background necessary to develop sound decision-making in real-estate transactions.
Several million real estate transactions take place in the United States every year, representing billions of dollars in economic activity. Statistics concerning real estate are among the data economists use to evaluate the health of the economy. (p. 2)
The sector includes not only real estate brokers and agents, but also property managers, relocation specialists, real estate investment counselors, real estate appraisers, home inspectors, title company employees, escrow agents, and real estate developers. This industry is closely linked to the construction and financing industries. Although real estate activity has a national economic impact, the real estate business is essentially a local business, dealing with property in a particular area or neighborhood. According to Wade Gaddy and Robert Hart (2003), “each geographic area has different types of real estate and different conditions that drive prices. This relates back to the old adage of ‘location’ being important; a parcel of real estate cannot be moved, is never exactly like another parcel, and its value is impacted by surrounding land uses.” (p. 5)
Two main branches make up the real estate industry – residential and commercial real estates. In most places, residential sales account for a large share of real estate activity that is why there are real estate agents who work exclusively in these types of transactions.
Someone who owns a home and wants to sell it (a seller) transfers ownership of the property to someone who wants to buy it (a buyer) at an agreed price. Ownership is transferred by means of a deed, a legal document that the seller gives to the buyer.
The real estate market almost always requires some form of financing in the real estate transaction. This is because few people have the cash in hand in order to buy a house or