Last Updated on May 22, 2023 by Bob Filipczak
Residential real estate is an industry word that describes what most of us are doing – buying new homes and selling our previous homes. It’s the default. Most real estate agents deal with residential real estate, so it’s a term that describes 73% of the market (according to the National Association of Realtors). What are residential properties and what makes them different? What makes them special?
The Definition of Residential Real Estate
If you are going to live in it – meaning the property you are buying – then it’s residential. The term refers to a real property used for living purposes, and that includes:
- Single-family homes – A single-family home is a standalone structure that is designed for one family to live in.
- Townhouses – A townhouse is a multi-level home that is attached to one or more other townhouses.
- Condominiums – A condominium is a unit within a larger building that is owned by an individual, but the common areas are shared among all residents.
- Apartments – An apartment is a unit within a larger building that is rented out to tenants.
These properties are typically purchased for personal use by individuals or families for residential purposes, and not for business or investment purposes. What is not considered residential real estate typically falls into the category: Commercial Real Estate.
Commercial vs Residential Real Estate
While residential real estate is used for living purposes, commercial real estate is used for business purposes. Commercial property includes office buildings, retail spaces, warehouses, industrial real estate, rental properties and other types of structures that are used for commerce. It also includes investment property.
Getting the Right Agent for Residential Real Estate
As we mentioned, the vast majority of real estate agents and REALTORS® work primarily in the residential real estate industry. That’s their bread and butter. You probably don’t even need to ask if they specialize in residential property. Some agents will specialize in helping you buy, and they are called selling agents. Likewise, some agents work mostly with home owners who are trying to sell their house, and they are called listing agents. Many agents work in both arenas – buying and selling.
When buying or selling residential real estate, it is important to work with the right real estate agent. A good agent will be knowledgeable about the local market, have strong negotiation skills, and be able to guide you through the buying or selling process.
Homes for Heroes’ nationwide network of real estate specialists, meaning agents who joined us to assist their local heroes in buying or selling a home, can save community heroes like you an average of $3,000 when you close on a home. An average of $6,000 if you buy and sell with our local real estate specialist. Sign up today to speak with a member of our team to learn more on how we can assist you and save you money in the process.
There are various legal protections in place, based on the principles of the Fair Housing Act, to protect buyers and sellers of residential real estate. For example, sellers are required to disclose any known defects or issues with the property, while buyers have the right to inspect the property before making a purchase. Much of the regulatory requirements around residential real estate are designed for the safety of the people who will live there.
Pricing for residential home sales can vary greatly depending on factors such as location, size, condition, and local market trends. If you are selling, your best tool for pricing will be a comparative market analysis (CMA), which is a report your agent can put together for you. If you are buying residential real estate, do some research on the comps – a real estate term for the pricing of comparable properties. Working with an experienced real estate agent can help you understand the pricing dynamics in your local market.
Mortgages and Mortgage Rates
Most people who purchase residential real estate will need to obtain a mortgage to finance the purchase. A mortgage is a loan that is used to buy a property, and it is typically repaid over a period of 15-30 years. The interest rate for your mortgage is key to how much you pay for the loan, both monthly and over the long term. The contracts for residential real estate lending are pretty complicated. When you get to closing on your residential property, you will be signing a lot of documents, and many of them will be involving your mortgage.
There is a lot of information out there about mortgages, including the four types of mortgages.
Locations (and Local Zoning Ordinances)
Residential real estate is subject to zoning regulations, which dictate how properties can be used in different areas. For example, some areas may be zoned for single-family homes only, while others may allow for multi-family dwellings. If you hear anything about zoning changes in the area where you live, it’s a very good idea to make a visit to your city council at their next meeting. For example, if they are changing some zoning near you from residential to a commercial project, it could affect your lifestyle (and the value of the property). Ask folks living next to parking lots.
When buying or selling residential real estate, it is important to have a written contract that outlines the terms of the transaction. This contract should include details such as the purchase price of the new home, closing date, and any contingencies or conditions that must be met before the sale can be completed. The legal protections we mentioned earlier for a real estate transaction involving a residential property are often baked into this contract.
Homes for Heroes Saves You Money on Residential Real Estate
Homes for Heroes is a service that primarily deals with residential types of real estate. We help community heroes buy their next home, sell their current home or refinance their mortgage loan, and we’ve been at it for more than 20 years. After you have been helped by our local specialists and close on your home, we will send you a Hero Rewards® check. The average amount received by a hero is $3,000 when they buy or sell a home. The average is $6,000 if you do both. In addition to provided you expert support and dedicated service, we provide this money to say thank you for your service. The hero groups who qualify for the savings we provide are:
- Healthcare Workers
- Military Service Members (Active Duty, Reserves and Veterans)
- Law Enforcement
Simply sign up today to speak with a member of our team. We would be honored to serve you and save you significant money in the process.