Abstract:

Forward sale is one of the strategies for funding or providing capital in real estate development. It is a method that is well documented about but remains unpopular in some climes for one reason or another. This study delves into the knowledge and use of forward sale as a funding strategy for housing development in Lagos state, Nigeria. In particular, the study assesses the use of forward sale in delivering housing in Lagos state in order to close the huge housing deficit that exists in the State. Both primary and secondary data were used in the study. Relevant extant studies were reviewed to establish opinions and perspectives on the subject as obtained in other climes while empirical data were collected from the study area to validate opinions and perspectives the subject as it concerns the study area. Data were collected with structured close-ended questionnaires administered to property developers, prospective buyers and registered (property) brokers all within Lagos State. Student’s T-Test was used to test the hypothesis of the study. The significance attached to the factors affecting the use of the strategy was also examined with relative importance index. Analysis were presented with basic statistical tools of tables, percentages and charts and then discussed. The result of the T-test clearly showed that the hypothesis that forward sale is popular among prospective home buyers in Lagos state is rejected. The study further revealed that insecurity of prospective buyer’s interest, developer’s default, poor construction standard and poor workmanship are key factors influencing potential buyer’s decision to commit to forward sale arrangement. The study therefore recommends government regulation of forward sale market for the purpose of boosting buyer’s confidence.