Background

Chapter 1

THE PROBLEM AND REVIEW OF RELATED LITERATURE

Background of the Study

One of the basic needs of people nowadays is to acquire a place suitable for them to live. According to Abraham Maslow’s hierarchy of needs, having a shelter falls down to the safety need of a man. The major firms which are responsible for satisfying the needs of the people with regards to the said above are construction companies as well as real estate businesses.

In our country, people prefer acquiring houses from real estate companies since it is more convenient for them. Residential real estate is a type of leased property containing either a single or multi-family structure, which is agreeable for occupation for non-business purposes. And since it is a lease, it makes it more preferable for people to acquire shelters from them rather than to rent a certain place that they could never own.

There are different types of real estate companies; residential, commercial, industrial, investor, property management, and Land. The most common is the residential type in which brokers, agents and realtors work together with home buyers and sellers in the sale and purchase of new and resold private homes.

The budget performance of every real estate companies serves as a general measure of its budgetary process over a given period of time it serves as a basis on the whole phase of budget being adopted by the company. It reflects management’s assessment of its budget preparation, implementation and evaluation phase. It is a tool of proper monitoring and adjustment of performance in an organization.

The measurement of budget performance is one of the main concerns of business organizations, comparing the actual from the budgeted results of their operations. Then the variances with the actual and budgeted performance are then noted, evaluated and investigated to formulate necessary corrective actions for the improvement of their operations. The effectivity of the budget process is given...