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. The terms real estate and real property
are used primarily in common law, while civil law
jurisdictions refer instead to immovable property.
In recent years, many economists have not 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 mortgages
-- 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, that
is, file a court action that lets them take the property
and sell it to get their money back. |
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