Why is Real Estate Called Real Estate | Etymology, Origin, History, and Definition

The real estate industry has been around since the earliest civilizations; in fact, it’s even older than many laws that govern it! It’s also been defined under many different names, from landed property to real property to realty—but why? Looking at some of these roots and how real estate has evolved into one of the most important sectors of our economy, let’s see how they originated.

The History of Real Estate

Why is Real Estate Called Real Estate

The first use of real estate can be traced back to Latin and Old French words for land, which go back to the Latin’ res’ meaning thing or property. Over time, the real estate started being used as a type of investment that didn’t rely on farming for returns.

Nowadays, real estate encompasses everything from land to homes and apartments as well as office buildings and retail outlets—basically anything with a value that we rent or buy from someone else.

Why Real Estate Is Known as Real Estate

The origins of real estate have to do with its meaning. If you’re involved in real estate, you’re dealing with land—in other words, property. The reason that term became so popular is due to its early use as a legal term and definition.

Since we’re curious about how real estate became real estate, let’s look at how some of today’s most common words and terms evolved. Real comes from Latin’ res’ and ultimately from re-, thing. The estate comes from Latin status, position, or condition when combined, real estate means a piece of property with a particular condition or position that gives it value.

What Does “Real Property” Mean in Legal Terms?

Why is Real Estate Called Real Estate

The real property encompasses land and whatever grows upon, adheres to, or is built upon.

This covers both man-made structures and crops. Property not moving or attached to the land is referred to as real property. On the contrary, private property can be transported or transferred physically.

“Real estate” and “real property” are two terms that can be used interchangeably. Also, real property can refer to anything permanently placed on or beneath the ground, not merely the land. This could include underground oil, gas, and mineral deposits. “Premises” is another term for real estate.

The word real in real estate refers to all tangible property, such as land and buildings. We use other terms, such as personal or intellectual property, to denote intangible assets.

Our legal system distinguishes between the real and personal property (and even a separate category for things like stocks or bonds) because real estate has unique properties that cause it to behave differently than other forms of wealth.

What is the Distinction between Property and Real Estate?

Real estate is just a plot of land with any natural or man-made improvements. Natural ties to the earth include trees, water, rich mineral reserves, and oil. Artificial additions include structures, paths, borders, and fences. The two most common categories of property are residential and commercial.

Residential real estate is land meant for human residence by one or more households. Real estate can be rented or owned. However, “residential real estate” usually refers to leased property.

Commercial real estate is used for business purposes. This category of property comprises office buildings, shopping malls, restaurants, and other similar establishments. Owner-occupied or leased commercial real estate are also options.

Any property in physical space, such as a house or apartment building, is referred to as a real estate. Real estate agents work in the industry of buying and selling real estate (or agents). Real estate brokers can include professional attorneys, certified public accountants, and even high school students doing after-school jobs to supplement their income.

What Parts of a house aren’t classified as real estate?

Why is Real Estate Called Real Estate

Real estate refers to a permanent attempt to enhance features firmly related to the land, whether natural or man-made. The concept of “real property” includes railings, lawns, pathways, barns, garages, and other immovable features.

Personal property can be found on real land, but it is not considered a part of the property. Personal property is everything that is not firmly attached to the land. Furniture, trucks, farm equipment, and other items fall into this category.

If you go to a furnished house and want to buy it, but the furniture isn’t included in the agreement. If you’re purchasing a farm from a landowner and believe the tractor or animals are included in the purchase, you should discuss it with the farmer before signing any paperwork.

Frequently Asked Questions

In real estate, what does the word “real” mean?

Real estate is a plot of land with any natural or artificial—man-made—changes attached or incorporated into it. Water, forests, vast mineral riches, and oil are all-natural ties to the ground. Structures, walkways, and fences are examples of artificial additions.

What is a synonym for real estate?

Real estate is also known by the terms realty, estate, lot, plot, farm, land, landed interests and preconstruction, real property, landholdings, buildings, and null.

What is the significance of the word “real” in real estate?

The term “actual or existing property” comes from the Latin word “res,” which means “things.” Houses and land are movable elements of your estate rather than your other possessions, such as a cat, dog, or car.

What is the difference between real estate and a house?

Simply put, real estate is the land itself and everything that extends straight up into the sky and down to the earth’s core. A house is a structure that is connected to Real Estate. When you buy a house, you are purchasing a package of rights linked with a specific plot of land that just so happens to have a house on it.


What we call real estate goes far beyond the property. We know it as the American dream or a home sweet home and value it as a physical structure and emotional security.

Humans invest their time, money, and effort into maintaining their homes because, in many ways, it becomes an extension of who they are. Investing in real estate isn’t just an investment of dollars—it’s an investment of us that has lasted throughout generations.

To summarize, the following are the reasons why real estate is called real estate:

  • The origins of the term “real estate” can be traced back to Latin and Old French terminology for land, which stems from the Latin word “res,” which means “thing” or “property.”
  • The word real is assumed to come from the Latin word ‘res,’ which is derived from the prefix re-, which means ‘object.’ The word “estate” comes from the Latin word “status,” which means “place” or “condition.” When used together, real estate refers to a piece of property in a specific condition or location that adds value to it.
  • All physical property, such as land and buildings, is real estate. Intangible assets are referred to by different words, such as personal property or intellectual property. Our legal system distinguishes between real and personal property. As well as a separate category for securities such as stocks and bonds).

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