Property Types and Terms in Real Estate

Real and Personal

What is the difference between real property and personal property? Basically, land and anything attached to it is considered real property, or real estate. This includes open land, anything naturally attached to the land (like trees), and permanent structures attached to the land. On the other hand, personal property is anything that isn’t real property. Most personal property falls into two categories: tangibles and intangibles.

Tangible and Intangible

Personal property can be categorized as tangible or intangible. Tangible personal property refers to things that you can see and touch. Your car, furniture, and satellite dish are all examples of tangibles. Intangibles are things you own that you cannot see or touch. Intangibles are sometimes just legal rights that you have and no “thing” at all. Bank accounts, insurance policies, intellectual rights, and stocks are all examples of intangibles.

Fixtures

Fixtures are a type of tangible personal property, and they can sometimes become part of real estate. Take a chandelier, for example. Say you are renting a house and decide to buy your own chandelier to hang in the dining room. The chandelier is your personal property, but it is attached to the house. While it is attached to the real property, it is considered a fixture.

Annexation

When you move, you decide to sell the chandelier to the landlord and leave it behind. The landlord buys the chandelier from you and it becomes a part of the rental house, or real property. In essence, the landlord has just annexed the chandelier. Attached to the real property, the chandelier was a fixture that became a part of it when you moved out and relinquished your personal property rights to it.

Now you should be familiar with just a few of the basic property terms used in real estate. There are many others, but these form the framework for many property transactions.”