Real estate is a lucrative industry, and that is why many professionals try their luck at being a real estate agent. If you are a real estate agent, you have the responsibility of informing your clients about the property you are trying to sell them. You need to disclose everything about the property and let the client decide if he or she wants to purchase it. If you are a buyer, you need to familiarize yourself with real estate law. Knowing the basics of real estate law enables you to know your rights as a property owner or buyer.
What is Real Estate Law?
Real estate law is also called real property law. It is a set of laws that indicates your right to own, encumber, use, and transfer the land and permanent additions attached to it. It is essential to learn the basics of real property law to be aware of your different rights as a property owner.
Three Types of Properties that the Law Recognizes
When the word “property” is mentioned, people may think that it automatically refers to real estate – houses, buildings, condominiums, and the like. However, property may mean different forms of assets. The law recognizes three different types of properties. These properties are:
- Tangible personal property – This type of property consists of items that most people own. It can refer to furniture, appliances, clothing, cars, jewelry, housewares, and more.
- Intangible personal property – Intangible properties refer to cash and cash equivalents. Cash equivalents may refer to bank accounts, stocks, bonds, insurance policies, mutual funds, and other investments.
- Real property – Real property refers to land and the structure built on it. Any person who owns a condominium, a building, or a house is a real property owner. A trailer or a mobile home is not considered as real property because it is not built on land. Real property law concentrates on anything related to real property.
Real Estate Law Basics
Anyone involved in the real estate industry must have an idea of the basics of real estate laws. Buying and selling real property involves a lot of rules and regulations; therefore, you must be aware of the following:
- Due diligence. When the purchaser is performing due diligence, he or she aims to answer important questions regarding the property. It involves a thorough inspection of the entire property. Through due diligence, property buyers can learn the limitations and restrictions of the property.
- Mortgage. Most people do not buy land or property in cash. Instead, the buyers pay a certain amount for the down payment and mortgage the remaining balance. Banks or financial institutions lend the buyers the total amount needed to pay for the property. In return, the buyer pays back the amount within a number of years. The mortgage contract is legally binding.
- Purchase and Sale. When you and the seller agree when it comes to the price, a purchase and sale agreement is signed. This legal document shows the amount of the sale, the involved parties, the mortgage amount, and other details related to the property.
For more information on real estate law, you can visit Hackard Law.