What does "financing" refer to in real estate?

Financing in real estate primarily refers to the mechanism through which a buyer secures the necessary funds to purchase a property. This involves various options such as mortgages, loans, or other sources of credit that allow individuals to acquire real estate without needing to pay the full purchase price upfront. By utilizing financing, buyers can manage cash flow more effectively, making property ownership more accessible.

Understanding this concept is essential for navigating the real estate market, as it influences the types of properties people can afford and the overall dynamics of housing demand and supply. Knowledge of financing options can also impact investment strategies and the ability to leverage assets to enhance one's portfolio.