Commercial Real Estate

Real estate is real property consisting of the actual buildings and land on it, and its accompanying natural resources like water, crops or livestock; and its beneficial infrastructural facilities like roads, railways or communication lines. It is a market involving the purchase and sale of lands or other assets from one party to another for the purpose of improving the value of the holdings as well as the productivity of the soil or the underlying structure of the real estate. The parties may be individuals, corporate entities or joint venturers. Real estate includes real estate owned by governments, public utilities, educational institutions, hospitals, schools or any other bodies performing public functions. A real estate contract is the legal document between an individual or a company and a real estate broker or agent acting on behalf of the seller.

There are various factors which determine the price of real estate. They include the location, value of the land or property used, the infrastructure of roads, rail transportation, electronic and electrical properties, and the social composition of the population living in the vicinity of the property used for housing. The location of the property used for housing, its physical condition, the value of the surrounding land or property used for agricultural purposes, the type of houses or buildings constructed, and its proximity to major industrial or shopping centres and other economic characteristics of the area where it is to be located are some of the factors which decide the cost of housing.

In the process of purchasing or selling lands or real estate, the principal aim of the buyer or the seller is to make money either directly or indirectly. They may seek to buy and sell for the purpose of using it themselves and earn a profit on the sale or they may use it as an investment. Buying vacant land for development of a commercial enterprise or housing involves a lot of risk. These enterprises are usually large in scale and require a lot of financial investment. The investors also run the risk of losing their money if the venture is a flop. Selling or buying a vacant land carries with it certain risks like acquiring the land without having an idea of how to develop the land economically and what future business prospects there might be in the land.