People all over the world occupy space. The environment we exist in and occupy is structured. These structures are governed by laws and narratives that forbid certain things to be done. They have also put legal policies that demand individuals to follow procedures that have been put in place.
Each individual can only acquire or gain ownership of these spaces if they meet the legal demands that allow them to do so. They also have to be clear on what and how they are going to make use of that particular space. The structures that have been put in place, based on various factors such as settlement structures dictate what a specific piece of land ought to be used for.
Real estate exists to enforce these structures and these laws and also to assist the prospective occupants of a piece of land with the legal procedures.
What is real estate?
Real Estate is basically rights to property such as land, building. It is the right to land in its complete form i.e., the air rights above that particular space and the space underneath the ground.
There are four different types of real estate.
1.Industrial real estate
This kind of property is mainly used for purposes of manufacturing and production. It can be used for research, storage, and warehousing. Rights to this kind of property is often given to firms or institutions that undergo mass production. They are usually isolated from everything and everybody else within a specific location. They often found on the outskirts of a town or city.
2.Land real estate
These are usually vacant pieces of land or land being used for farming. They usually come in the form of ranches and working farms. Ownership of land real estate is given to people who want to venture into agriculture, either for commercial use or for domestic use.
3.Commercial real estate
This includes property that is used specifically for producing income. These include shopping centers, corporate buildings, medical buildings, hotels, and educational buildings. Apartment buildings also fall under this category because they exist for the purpose of producing income.
4.Residential real estate
These include property used specifically for housing. This includes construction and resale of homes. They range from single-family homes to multi-generational and vacation homes.
How does real estate work?
Real estate primarily refers to the production, selling, and buying of property. The process of giving up ownership and gaining ownership is usually a complicated one and requires experts to intervene. The people who exist as mediums for these transactions to take place are called real estate agents. They can be further subdivided into two distinct categories namely the Seller’s agents and the Buyer’s agents.
1.The Buyer’s agent
These help individuals who desire to purchase property. They understand the market really well and can help find a property that best matches the criteria set by the aspiring property owner. Agents compare prices and go for the most affordable ones or ones that match the budget. They are also in a position to negotiate on behalf of their client. Upon purchase of the property, they assist with the legalities of change of transfer of ownership.
2.The Seller’s agent
These agents help clients who own property and wish to sell. They help with the pricing of the property using factors that influence its value. They also help with the listing of the property and finding potential buyers. They help the sellers with negotiations and therefor selling to the highest bidder.
After the buyer and the seller agree on a price, change of ownership is not instant, there is something called the pending status. In fact, the most common question by buyers is what does pending mean in real estate?
What does pending mean in real estate?
The pending status simply means the seller accepted the buyer’s offer but the property has not been officially sold. Legally, the seller still owns the property because the title deed is still in their name and still has not been officially been transferred to the buyer.
Until the paperwork is done, it technically still means the house is still on the market, this is an important note to make when answering the question “what does pending mean in real estate“. As a precautionary measure, buyers usually include clauses in their offer that seller cannot cancel their offer if a better offer comes their way. This helps them secure the property just until the paperwork has been finalized.
The pending status also means the buyer can still pull out of the deal since it has not been officially closed. In the event that they change their mind or decide on a different property altogether, the pending status allows them to reverse their offer. This opens doors to other potential buyers.
When agents are searching for properties to buy for their clients, they do not completely overlook properties with the pending status. This is because, at this point, the seller can still be swayed into changing their mind and considering a new offer.
Sometimes the pending sale is confused with a contingency sale. The difference is in the process of closing a deal. A contingency sale means there are specific conditions that need to be met before a deal is closed. A sale on the contingency status means the seller has accepted an offer under the conditions of the buyer. If all the conditions are met, the sale can then be finalized and officially closed.
It is important for buyers to understand that a pending sale does not mean the property is officially theirs. The primary ownership of a property means having your name on the titles and the deeds. If that transfer has not been made, the property still belongs entirely to the seller.