Too Long; Didn't Read

Lands, buildings, and houses are called real property or real estate, and the business pertaining to them, the real estate business. Every one of us has more or less to do with this business. If we do not own property, we pay rent. Rent is the money paid for the use of a piece of land, or a building, or part of a building, and is usually paid at certain stated intervals of time—monthly, for example. The owner of the building is called the landlord; the one who rents, the tenant. Sometimes there is no condition as to how long a tenant shall remain in one place and pay rent, but, as a rule, the landlord requires the tenant to sign a lease. This is a contract between the landlord and the tenant, stating that in consideration of the landlord's furnishing the tenant a place in which to live with certain conveniences—such as heat, hot water, and other services—the tenant agrees to pay rent for a certain length of time, usually a year or more. If the tenant moves out before his lease expires and refuses to pay the rent, he breaks the contract and, as is usually the case when a contract is broken, a lawsuit may follow. In large cities where land is in some places very valuable, owners may not care to sell the property on which others wish to build, but lease it to the builders for a certain term of years, usually ninety-nine years. Suppose you no longer wish to pay rent, but to own the house in which you live. If you buy a piece of property from John Smith and pay him your money for it, you wish to be assured that after a few months John Smith will not come to you and claim the property as his. To protect you John Smith gives you a deed to the property. A deed is a contract between the buyer and the seller of the property. It states that, in consideration of the buyer's paying a certain stipulated sum of money, the seller releases and conveys the property to the buyer. This deed shows that you now own the property. At the same time you should receive a clear title to the property; that is, you wish to be sure that no one else has a claim on the property. If John Smith guarantees that the title is clear, he gives you a warranty deed for the property, in which he will "warrant and defend the same against all lawful claims whatsoever." If, however, he simply turns over the property to you as it stands, he gives you a quitclaim deed, in which he relinquishes or quits all his interest in it. If you have no debts on the property, you own it in fee simple. Very often in buying property, the purchaser pays only a part of the purchase price himself, paying for the balance by borrowing the necessary amount from a third party. For example, if the house you bought from John Smith cost $6,000 and you had only $4,000, you would be forced to borrow the other $2,000 to pay John Smith. You would then go to your bank or to some person who had money to invest and would borrow the required amount, and to guarantee that you would pay the money back, you would give a mortgage on the property. A mortgage is a contract which states that, in consideration of one party's giving the second party a certain sum of money, the second party agrees to pay interest on that money at a stipulated rate, and at the end of a certain length of time agrees to pay the money back; and that, in case the second party does not pay back the amount at the end of the time, the first party is empowered to take possession of the property, to sell it, and to get the amount due him. This last procedure is called foreclosing the mortgage. It is a common practice to mortgage property; almost all the property in a city is mortgaged. Some men and firms make a special business of transferring property, buying and selling it for others, making leases, and collecting rents. They are called real estate agents, and for their services get a commission, which is a certain percentage of the purchase or the selling price and a certain percentage of the amount of rent collected. This percentage varies according to whether the amount of money involved is large or small, the percentage being larger when small sums of money are involved than when large sums are involved.