1 Managerial Economics (ARE) 143 University of California, Davis Instructor: John H. Constantine KEY —Handout: Chapter 1, An Introduction to Real Estate Investment: Legal Concepts (1) What is the difference between real estate and real property? Real estate refers to the physical land and improvements constructed on the land, while real property refers to the ownership rights associated with the real estate. (2) What is meant by an estate? Why are estates important in real estate finance? Estate is used to denote a possessory or potentially possessory interest in real estate. However, not all interests in real property are estates. Ownership can be quite different from possession and a variety of legal factors affect the ownership rights associated with real estate. The economic benefits expected by lenders, investors, and other parties in real estate transaction are affected by these legal factors. (3)
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