Acquisition and Disposal of Land and Real Estate Essay

Acquisition and Disposal of Land and Real Estate - Essay Example The acquisition of land and real estate requires an official process that is based on risk analysis, and financial analysis.Real estate refers to things which are not movable for example land and improvements permanently attached to it. There is a difference between real estate and real property. The ownership rights that are associated with the real estate are called real property. During acquisition of real estate, the investor acquires the land, all the physical assets of the land and all the things which are permanently attached to it. The investor also gets property rights which include the right to control, occupy, develop, exploit, lease, improve, and sell the real estate.It is important to differentiate between real estate and real property because different parties have different rights on a given part of real estate. Property rights can also be described as the right of a person to use, dispose, possess and enjoy his property. (Fisher & Brueggeman 2004)The value of real est ate is the total price that an individual is willing to pay so as to acquire the benefits associated with all the property rights. It is important to note that it is not necessary for a person to be the owner of the property so as to have rights to it. A person who rents a piece of land is not the owner but he has the exclusive right to use the land as he wishes for a certain period of time. In exchange for the right to use the land, the tenant/lessee is willing to pay a certain amount of money. (Fisher & Brueggeman 2004) There are certain interests that an investor can acquire from a piece of property. An interest in real estate can be defined as a right or claim on property, production or its revenues. The interest in property is created by the possessor who can pledge the property in order to attain a certain objective with out giving up the property. An example of this is where a person pledges his land as security when he wants a loan from a bank. An easement is an interest in land whereby a person has the right to use the land leased for some special purpose. (Fisher & Brueggeman 2004) The legal aspect of a real estate acquisition is very important. It can assist in knowing the benefits of other persons who have some rights over the property. Often conflict arises concerning the rights to be given to the people who are holders of interests in the property. (Fisher & Brueggeman 2004) Classification of Estates There are certain categories of estates that can be differentiated in terms of the nature of rights that come with the ownership of an estate. An estate in possession allows the owner of the land immediate enjoyment of the land. An estate not in possession is a future estate in land and it doesn't give the buyer any rights to the estate until some time in the future. It will not change to an estate in possession until some future occurrence takes place. (Fisher & Brueggeman 2004) Estates in possession are of two varieties: leasehold and freehold estates. They are differentiated on the basis of the certainty of their duration. A freehold estate lasts for an indefinite period of time which means there is no date that the possession to the estate ends. Leasehold estate ends after a certain amount of time. It is a right to possess and use the property owned by another for a period of time. Examples of leasehold estates include the renting a residential estate whose contract is to be signed every year. A freehold estate can be the purchase of a home in the suburbs which can be leaved in generation after generation. (Fisher & Bruegg