Real estate is land and any buildings or structures on it, as well as natural resources like water or minerals. For millions of people, their homes are the largest investment and most valuable asset they own. The value of real estate typically appreciates over time, and people are able to make money by buying and selling real property. Real estate agents and brokers help facilitate these transactions.

The real estate process begins when a homeowner decides to sell their home. They typically seek out a real estate agent, often through recommendation or Internet research. The agent helps the seller negotiate terms of the sale and prepare a contract for the home to be sold. The agent then lists the property for sale with a listing service. Read more

When a home is sold, the agent typically earns a commission from the transaction. This commission is usually a percentage of the sales price. If the real estate agent is working with a broker, the broker may also take a cut of the commission.

Commercial real estate is any property used for business purposes, including apartment complexes, gas stations, grocery stores and hospitals. Industrial real estate includes factories, mines and other businesses that require large spaces. Undeveloped land is also considered part of real estate, and it can generate income through royalties from mineral discoveries or a rental income from the use of the land for something like access roads or cell towers.

Mortgage lending is a major aspect of the real estate industry, and it’s regulated by government agencies. It’s illegal for lenders to discriminate on the basis of race, religion, sex, national origin, disability or age.

The value of real estate can be volatile, as it can go down in value just as quickly as it rises. Real estate investors are able to mitigate risk by diversifying their portfolio with different types of properties and assets.

Another way to reduce the risk of investing in real estate is to purchase a stake in a diversified real estate investment fund or syndication, which involves purchasing shares in a partnership that owns and operates properties and assets. This approach is particularly useful for small investors who can’t afford to purchase a significant amount of real estate on their own.

The housing market is a significant component of the overall economy, and many economists keep close watch on new housing starts as a leading indicator of economic health. However, if new housing starts are too high or if the type of houses being built isn’t appropriate for the area’s workforce, this can signal problems.