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Session 1: Introduction to Real Estate

Updated: May 11




Session 1: 

Introduction to Real Estate

Icebreaker


Medusa:  Students stand in a circle.  Countdown from 3, 2, 1, with all heads down & eyes closed. When counting reaches 1, all heads up to look towards someone.  If 2 people are making eye contact, they are out.  We can extend the game to 3 looks each.  To spell the letters O.U.T.


 

Welcome to our introduction to the fascinating world of real estate! This session is designed to unravel the mysteries of real estate and show you how it touches nearly every part of our lives.   Our journey will take us through the exploration of residential properties like houses, apartments, and condos, illustrating how people create homes and communities. We'll discuss commercial properties, where businesses thrive and grow, adding life to our towns and cities. Through interactive discussions and activities, we aim to provide a solid foundation in the basics of real estate, offering insights into how properties are more than just spaces—they represent life. 


Whether it's the place you call home, where you shop, or where you study, real estate plays a big role in shaping our experiences. By the end of this session, you'll have a clearer understanding of real estate's impact and how it contributes to all of our lives. 


Section 1: Types of Properties


Residential Properties




We're going to explore a very important part of real estate: Residential Properties. Can anyone guess what these might be based on the story of Little Town? They are places where people live. Let's break it down a bit more.


Houses:   


Think of a house like your typical home with a front yard and a backyard. It's a separate building where a single family usually lives. Houses come in all shapes and sizes. Some have one floor, others might have two or even more! They often have a living room, kitchen, bathrooms, and bedrooms.

Apartments: 


Now, let's talk about apartments. Imagine living in a building with lots of other families, but each family has its own separate living space. That's an apartment. Apartments are part of larger buildings called apartment complexes. They can range from small studios, which are like one big room, to large apartments with several bedrooms.


Condos (Condominiums): 


Condos are a bit like apartments, but there's a key difference. While apartments are usually rented, condos are often owned. They're in big buildings too, and each condo is like a separate home inside that building. People who live in condos share common areas like gardens, pools, or gyms.


So, to recap, residential properties are places where people live, and they come mainly in three forms: houses, apartments, and condos. Each has its own unique features and way of living.


Class Activity - Discussion Led By The Instructor:  Who can tell me what they think might be different about living in a house compared to an apartment or a condo?


Commercial Properties




   

Let's shift our focus to another interesting aspect of real estate: Commercial Properties. As we talked about residential properties being places where people live, commercial properties are where people do business. Think about the places you visit when you're not at home or at school. These are typically commercial properties. Let's delve into some examples and understand what makes them special.


Stores and Shops:


Example: Think about your favorite ice cream shop or the bookstore you love to visit. These are commercial properties. They're designed for businesses that sell goods or services directly to people like us.


Class Activity: Discussion::  Can you think of any store you visited recently? What did you notice about it? Maybe the way items were displayed or how the shop looked?


Offices:


Example: Offices are another type of commercial property. They are where people go to work, but they don't usually sell things there. Instead, these are spaces where different businesses, like technology companies or law firms, have their workers do various tasks.


Class Activity: Discussion: : Have you ever seen an office building? What do you think it's like inside? There might be lots of desks, meeting rooms, and maybe a break area.


Restaurants and Cafés:


Example: Restaurants and cafés are also commercial properties. They provide spaces for people to eat and socialize. From small cafes to large restaurants, each offers a unique experience.


Class Activity: Discussion: What's your favorite restaurant or café? What do you like about it? The food, the decorations, or maybe the music?


Malls and Shopping Centers:


Example: Large buildings or complexes that house multiple stores and restaurants, like a mall, are prime examples of commercial properties. They are designed for shopping and entertainment.


Class Activity: Discussion:  When was the last time you went to a mall? What did you do there besides shopping? Maybe you watched a movie or played games?


Factories and Warehouses:


Example: These might not be places you visit often, but factories where things are made and warehouses, where things are stored, are also commercial properties.


By understanding commercial properties, you start to see how our community and economy work. These places are essential for businesses to operate and serve the needs of people like us. So, next time you visit a store, an office, or even a restaurant, remember, you're stepping into a world of commercial real estate!



Section 2: Learning Key Real Estate Terms


Before we dive into our exciting journey through the world of real estate, let's talk about why it's important to understand real estate terms. Just like in any subject, having a good grasp of the key terms and vocabulary is crucial. Here are a few reasons why:


Clear Communication:


When you understand real estate terms, you can communicate about properties. It’s like knowing the right words to use in a conversation about your favorite book or video game. This way, when you talk about houses, apartments, or land, you know exactly what you're discussing.


Informed Decisions:


Real estate is a big part of our lives. People buy, sell, and rent properties all the time. Understanding these terms helps you make informed decisions. For example, if you're moving to a new house, knowing these terms will help you understand what your parents are talking about with agents and sellers.


Foundation for Future Learning:


Like building blocks, these terms lay the foundation for more complex concepts you'll learn later in life. Real estate isn't just for adults; one day, you might want to buy a house or invest in property, and this knowledge will be invaluable.


Remember, learning these terms isn't just about memorizing definitions; it's about understanding a part of the world that affects all of us. So, as we go through this class, I encourage you to ask questions, think critically, and see how these terms apply to the world around you. 🌍🏡📘


TERMS:  

We’ll play a fun game with these terms later. Don't stress out about these words. Maybe you've never seen them before. Read through them and we'll be reviewing them throughout the course.


Real Estate: This term refers to land and any buildings or structures on it. It includes things like houses, apartment buildings, offices, and stores.


Example in Use: "They are learning about real estate in school, including how houses and stores are part of it."


Property: A property is any piece of land or a building. It can be something as small as a tiny shop or as big as a huge shopping mall.


Example in Use: "The Smiths bought a new property on Main Street. It has a house and a big backyard."


Real Estate Agent: This is a person whose job is to help people buy, sell, or rent properties. They know a lot about different houses and apartments.


Example in Use: "The real estate agent showed us four houses today to see which one we liked best."


Seller: A seller is someone who wants to sell something, like a house or a piece of land. When someone decides to move out of their house and wants someone else to buy it, they become the seller of that house.


Example in Use: "The Johnson family became sellers when they put their house up for sale because they were moving to a new city."


Buyer: A buyer is someone who is looking to purchase something, like a house or an apartment. When you buy something, you are the buyer.


Example in Use: "The Garcia family were buyers when they were searching for a new home to purchase."


Closing: Closing is the final step in the process of buying a property. This is when the ownership of the house officially changes from the seller to the buyer.


Example in Use: "At the closing, the Williams signed the final papers and became the new owners of the house."


Commission: A commission is the money paid to a real estate agent for their services, usually a percentage of the sale price of the property.


Example in Use: "The real estate agent received a commission after helping the Martins sell their home."


Tenant: A tenant is someone who rents a place to live or work. If you live in an apartment, your family is the tenant.


Example in Use: "Mrs. Jones is a tenant in the downtown apartment building, she rents the apartment on the second floor."


Landlord: A landlord is the person or company that owns the property being rented out. They are responsible for maintaining the property and collecting rent.


Example in Use: "Mr. Lee, the landlord, fixed the broken window in the lobby of our building."


Rent: Rent is the money that a tenant pays regularly to a landlord to live in or use their property.


Example in Use: "Every month, my family pays rent for our apartment."


Lease: A lease is a contract or agreement between the landlord and the tenant. It says how long the tenant can stay and how much they need to pay for rent.


Example in Use: "My parents signed a one-year lease for our house, which means we'll stay here for at least a year."


Market Value: Market value is how much a property is worth in the current market. It can change based on things like where the property is located and how big it is.


Example in Use: "The market value of our house has gone up because a lot of people want to live in this neighborhood."


Appraisal: An appraisal is an expert estimate of how much a property is worth.


Example in Use: "Before my parents bought our house, they had an appraisal done to make sure they were paying a fair price."


Equity: Equity is the part of a property that you truly own. If you have a mortgage, your equity is the value of the property minus what you still owe on the mortgage.


Example in Use: "Over time, as my parents pay off the mortgage, they build more equity in our house."


Closing Costs: These are additional costs that buyers and sellers pay when a property is bought or sold, on top of the purchase price. It includes things like legal fees and taxes.

Example in Use: "When my parents bought our house, they also had to pay closing costs, which were for the lawyer and government taxes."


Property Taxes: These are annual taxes that property owners pay to the local government, based on the value of their property.


Example in Use: "Every year, our family pays property taxes for our house, which help pay for things like schools and roads in our town."


Zoning: Zoning laws determine what types of buildings can be built in different parts of a town or city. For example, some areas are zoned for houses, and others might be for businesses or factories.


Example in Use: "The empty lot near our school is zoned for residential use, so only houses or apartments can be built there."


Escrow: This is when a third party holds onto money or a property until a certain condition is met, like all parts of a sale being complete.


Example in Use: "When my aunt bought her house, her down payment was held in escrow until the sale was finalized."


Deed: A deed is a legal document that shows who owns a piece of property. It's like a certificate for owning land or a house.


Example in Use: "When my family bought our house, they received a deed that says they are the owners."


Home Inspection: This is when experts check a house for problems before it is bought. They look for things like broken things, safety issues, or places that need repair.


Example in Use: "Before buying our house, my parents had a home inspection done to make sure everything was in good condition."


Appraiser: An appraiser is a professional who looks at a property and decides how much it's worth. They check things like the size of the house, how old it is, and where it's located.


Example in Use: "Before the Smiths could sell their house, an appraiser came to determine its value."



Mortgage and Finance Terms


Mortgage: A mortgage is a special kind of bank loan that people use to buy a property. They pay it back over many years.


Example in Use: "My aunt and uncle took out a mortgage to buy their new house, and they'll pay it back over 30 years."


Down Payment: This is a large initial payment made when buying a property. It's a part of the property’s price that you pay upfront, and the rest is often covered by a mortgage.


Example in Use: "My parents saved for years to make a down payment on our house."


Mortgage Rate: This is the interest rate you pay on your mortgage. It's like a fee for borrowing money to buy a house.


Example in Use: "My parents shopped around for a good mortgage rate when they were buying our house to make sure they got a good deal."


Adjustable-Rate Mortgage (ARM): This is a type of mortgage where the interest rate can change over time, usually based on current financial market conditions.


Example in Use: "My aunt chose an adjustable-rate mortgage for her house, so her payments can go up or down in the future."


Fixed-Rate Mortgage: This is a mortgage with an interest rate that stays the same through the whole term of the loan which is most commonly 15 or 30 years.


Example in Use: "My parents chose a fixed-rate mortgage for our house, so they know exactly how much they will pay every month."


Refinancing: This is when you get a new mortgage to replace the original one. This can be done to get a better interest rate or different loan terms.


Example in Use: "My neighbors refinanced their mortgage to take advantage of lower interest rates."


Foreclosure: This happens when a homeowner is unable to make their mortgage payments, and the lender takes back the property.


Example in Use: "The house down the street went into foreclosure because the owner couldn't pay the mortgage."



Class Activity: Jeopardy:  Take a few minutes and quickly scan through these new terms.  Let's see how much we’ve learned.  Click the Google Forms link to take a Knowledge Challenge!    And/Or Click The Link and Play Jeopardy.   




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