1---How to divide houses into only two categories?
We need to divide houses according to the historical average price.
(Because the predicted price for any house under consideration is the historical average price of houses in the same category.)
2---What should I do after I sort them out?
We use data to decide how to break the houses into two groups, and then again to determine the predicted price in each group.
3---What is "Fitting(Training) the model"&"Training data"?
Fitting(Training) the model: the step of capturing patterns from data.
Training data: the data used to fit the model.
4---What is the function of model fitting?
After the model has been fit, you can apply it to new data to predict prices of additional homes.