THE IMPACT OF DEPRESSED ECONOMY ON REAL ESTATE FINANCE
Financing of Real Estate/Real Estate finance at its name implies is simply concerned mainly with decision about fund that are involved in Real Estate
transaction. Most of the transaction involves the exchange of cash for Real Estate (property). Furthermore, most of the cash borrowed money from
financial institution such as mortgage banks the political fluctuation and slump in the Nigerian Economy has gross erect on various sector of the
economy especially Real Estate Sector. This project is intended looking at the impact of depressed economy on Real Estate Financing.
1.1 BACKGROUND OF THE STUDY
In the minds of most people “financing” as its name implies conjure up visions of inexplicable exchanging of piece of paper which involves something
called “interest” that take place generally anywhere. Those who trail their interest in finance swily find out that you don’t have to go that level before getting involved in a financial transaction. The major brokerage houses have branches in most communities.
Furthermore there are usually commercial banks and savings institutions as well as microfinance banks and many communities, regardless of their
various sizes. Infact, financial transaction can take place almost anywhere there is no need to go to a commercial bank. All you need is two or more populace. Chika E Udechwuku (2008) says real estate financing is the process of acquiring funds or capital generally for the purpose of development in order to gain control over the property or assets there are two ways of classifying estate finance which tend to overlap themselves
- Whether the financing is internal or external to the real estate owners or developer.
- The above two depend on the third which is the duration of estate in question.
Sherman J. Maise (1987) also says real estate finance is concerned mainly with the decisions by which many resources are raised for the purpose of owing or developing real estate. Although all decision could be sometimes are made by a single person two or three separate are usually active in a financing transaction. In addition most of the cash is borrowed from financial institution such as Mortgage Banks. Moreover financing of real estate or real estate finance involves evaluating the situation adjourning the transaction and deeding the best method of financing of real estate given the risk and certainty of situation. Given many ways in which financing can be structured professionals must understand how the alternative dear
in their ability to increase potential gains and raise or lower the risk of failure.