How Does Real Estate Work?

Real estate is the most substantial investment most people will ever make. It is an

extremely fast-paced industry that can offer huge rewards for those who are

successful. Buying and selling property is not for everyone, however, and it can be

difficult to navigate the intricacies of real estate transactions. The popularity of

reality shows like Million Dollar Listing, Flip or Flop and Property Brothers have

increased the general public’s interest in the real estate business.

There are four main categories of real estate: residential, commercial, industrial and

land. Most people are familiar with residential real estate, which is comprised of

buildings designed for housing purposes, such as single-family homes, duplexes and

apartment buildings with four or fewer units. Commercial real estate is any building

used for business or retail purposes, including shopping malls, strip malls and office

buildings. Industrial real estate is any building or structure that is used for

manufacturing, processing or storing goods. Finally, land is any undeveloped parcel

of land that may have potential for future development. Also read

Purchasing real estate involves numerous complex processes, many of which are

governed by state and local law. Most buyers and sellers use the services of a real

estate agent or broker who is familiar with the local laws and procedures for

transferring ownership of property. Real estate agents facilitate the purchase and

sale of property by coordinating between the buyer and seller, negotiating terms,

assisting with the preparation of legal documents and conducting a final

walkthrough of the property before closing. They may also recommend a lender for

the buyer and assist with the inspection process.


If a person is not interested in investing in real estate on their own, they can invest

with others through a syndication or partnership. This can be a great way to get

involved with the real estate market without having to commit large amounts of

capital. Investors can receive distributions and equity from the property, while a

general partner takes on the risk of managing the property and generating returns.

While it’s not as glamorous as the work that goes on behind the scenes on popular

reality shows, real estate is a legitimate and highly profitable business for those who

understand the intricacies of the market and how to navigate its many moving parts.


Using a CRM like Pipedrive to manage communications with clients, nurture leads

through the sales funnel and organize documents for closing can make the process

smoother and faster for everyone involved. Try it free today.