real estate finance - full book (500 pgs)

Leverage is using others money to the maximum extent

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Unformatted text preview: e a cash flow for the owner. 1-8 Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 1. IMPORTANCE OF REAL ESTATE FINANCE THE PUBLIC Home Buyers – Purchasing a home is the major investment for most families, and a cash purchase is generally impossible. When property values rise, the availability of financing determines, more and more, whether or not the Investors – Frequently, income property is purchased to take advantage of leverage. Leverage is using others money to the maximum extent. Without financing, leverage is not possible. Refinancing – The public provides an enormous demand for money through refinancing. GOVERNMENT INVOLVEMENT Governments exert an enormous influence on finance at different levels. The controls increasingly affect the cost and availability of funds for real property. Regulations – Regulations on interest and loan broker commission rates directly affect how much the borrower pays for money. Monetary and Fiscal Policies – Government spending, tax policies, and regulation of the money supply all affect the availability of mortgage money, and the prevailing interest rates. Land Use – Local controls on growth and density, and environmental restrictions on uses of property, affect the cost of developing real estate, the demand for real estate, and the willingness of lenders to finance. Infrastructure – Availability and costs of utilities, transportation, etc., affect the cost and the desirability of property for both buyers and lenders. THE IMPORTANCE OF FINANCING TO THE REAL ESTATE LICENSEE To be successful, real estate licensees need a working knowledge of real property financing. One of their main tasks is developing sources of financing acceptable to both sellers and buyers in real estate transactions. This is true in all specialization’s of real estate practice. Dynasty School (www.dynastySchool.com) 1-9 REAL ESTATE FINANCE Residential Sales – Sales of new and existing prope...
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.

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