For millions of people, real estate—in the form of their homes—is the single largest

investment they’ll ever make and, in many cases, is their most valuable asset.

Whether buying or selling, the real estate industry can be lucrative and provides a

variety of options for investors, developers, sales professionals and more.

Understanding how does real estate work is important to ensure success in this fastpaced

and complex business.

The simple definition of real estate is land and anything that’s permanently attached

to it, including buildings. This is in contrast to personal property, which includes

items that can be removed, such as cars, furniture, products and livestock. There are

different branches of the real estate industry, each with its own unique facets and

processes. Real estate transactions are facilitated by real estate professionals, such

as real estate agents and brokers, who help buyers and sellers understand the

market, negotiate terms and close deals.

Purchasing a home or commercial building usually requires a mortgage, and that’s

where real estate lenders come in. Lenders can be private banks, credit unions,

mortgage companies or other financial institutions. They assess the risk of lending to

real estate investors and lend based on the value of the property, its location, and

other factors. Real estate lenders also provide insurance to protect against loss or

damage to the property. Also read

There are six major areas of the real estate industry. Residential real estate includes

everything from single-family homes to multifamily rental properties with four or

more housing units. It also encompasses portable dwellings like houseboats and

mobile homes. The housing market is one of the most significant parts of the real

estate industry, and it relies on supply and demand to determine valuation.

Commercial real estate includes retail spaces, office buildings, strip malls and gas

stations, as well as apartment buildings with five or more units. The demand for

these types of spaces is driven by the need for businesses to have a physical

presence and employees to have a dedicated workspace.

Industrial real estate consists of factories, warehouses, processing plants and similar

properties. This type of real estate is typically located on the outskirts of cities and

serves as an alternative to urban sprawl. This type of real estate is a great

opportunity for investors because it offers low rents and good access to labor and


Vacant or undeveloped land is a great investment opportunity because it can be

used for a wide range of purposes, such as grazing, timber production and

agriculture. It also tends to increase in value over time and can be a secure source

of income for investors.

The process of selling real estate can be complex, but it doesn’t have to be. Using

the right tools and strategies can improve efficiency and reduce costs. For example,

a real estate CRM like Pipedrive can help you track communications with clients,

nurture leads through the sales funnel and organize the myriad of documents that

need to be reviewed before closing.