Mortgages in Real Estate

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 mortgage loans --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 by filing a court action that lets them take back 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.

Levels

According to The Economist, "developed economies'" assets at the end of 2002 was
Residential property: $48 trillion
Commercial property: $14 trillion
Equities: $20 trillion
Government bonds: $20 trillion
Corporate bonds: $13 trillion
Total: $115 trillion
That makes real estate assets 54% and financial assets 46% of total stocks, bonds, and real estate assets. Assets not counted here are bank deposits, insurance "reserve" assets, and human assets; also it is not clear if all debt and equity investments are counted in the categories equities and bonds. For US asset levels see FRB: Z.1 Release-- Flow of Funds Accounts of the United States.

Bussiness Sector

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 a 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. Many internet companies actually use the address of properties as domain names.

Basics

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.